The V.O. Chidambaranar Port Authority has invited bids for a major infrastructure package valued at ₹9,859.45 crore for its proposed Outer Harbour project at Thoothukudi in Tamil Nadu. The tender covers construction of breakwaters, capital dredging and reclamation works and is proposed to be executed under the Hybrid Annuity Model (HAM).
The scope of work includes development of the outer harbour breakwater system, dredging of approach channels and harbour basins, and reclamation of land required for future terminal yards and allied port infrastructure. These works form part of Phase-I of the Outer Harbour development.
The Outer Harbour project was earlier estimated to cost ₹7,055.95 crore, for which the foundation stone was laid in February 2024. However, revised cost estimates due to increased dredging quantities and escalation in construction costs have pushed the overall project outlay significantly higher.
Earlier, the port authority had attempted to implement the Outer Harbour project through a public-private partnership (PPP) model with viability gap funding (VGF) support. Despite multiple attempts, the project did not attract adequate bidder interest under the earlier structure, leading to delays in execution.
As part of a revised implementation strategy, the port authority has now separated the core marine infrastructure works from the terminal development. The breakwater, dredging and reclamation works are being tendered independently under the HAM framework, while the container terminal component is proposed to be taken up separately through a different concession model at a later stage.
Under the Hybrid Annuity Model, the selected contractor will be responsible for executing the project, while the port authority will make payments in the form of annuities over a defined period following completion of construction milestones. This approach is expected to reduce upfront financial burden on the authority and improve participation for large-scale marine construction contracts.
The Outer Harbour project is considered critical for VOC Port’s long-term expansion plans. Once completed, it is expected to enable the port to handle large container vessels, significantly enhance cargo handling capacity, and strengthen its position as a deep-draft port on India’s east coast.
The issuance of the tender marks a key step toward reviving the long-pending Outer Harbour project. Successful completion of the breakwater, dredging and reclamation works is expected to lay the foundation for subsequent development phases and accelerate the overall execution of the project.