“The Sethusamudram Corporation has passed a resolution seeking additional grant of ₹115.72 crore from the government to settle the dues of Dredging Corporation of India for the dredging works carried out at the project site along with a proposal to the ministry of ports, shipping and waterways for winding up SCL,” government sources said.
The ruling Bharatiya Janata Party (BJP) was opposed to the project when it was in the Opposition.
About the project
Sethusamudram Corporation is a special purpose vehicle (SPV) set up under the Companies Act in 2004, with the Cabinet’s approval, to raise funds and implement the Sethusamudram Ship Channel Project (SSCP) – a shorter shipping route between the east and west coasts of the country.
The SPV was formed with equity participation from state-run firms such as Shipping Corporation of India Ltd, Dredging Corporation of India Ltd, Vizag Port Trust, Kamarajar Port Ltd, Chennai Port Trust, Paradip Port Trust and V O Chidambaranar Port Trust.
Shipping Corporation and Dredging Corporation invested ₹50 crore and ₹30 crore respectively as equity in the project.
Billed as India’s Suez Canal, the ₹2,427.40 crore project was designed to reduce ship journeys between India’s western and eastern coasts by as much as 36 hours or up to 424 nautical miles (1 nautical mile = 1.82 km) by creating a channel between the Indian mainland and Sri Lanka.
Shipping companies would save on bunker (ship fuel) while India’s exporters-importers will reduce maritime transportation costs.
Ships now endure a long detour around Sri Lanka. In the absence of a continuous navigational channel connecting the east and west coasts, the ships sailing between the two coasts of India and along the international shipping routes have to circumnavigate Sri Lanka, due to the presence of a reef, known as Adam’s Bridge, located southeast of Rameswaram near Pamban in Tamil Nadu.
An ambitious scheme was formulated to create a continuous navigational channel around the Indian coast to overcome the hurdle.
The SPV has so far spent ₹836.35 crore on the project which involved boring a new shipping lane connecting the Gulf of Mannar and Bay of Bengal through Palk Straits and Palk Bay.
Supreme Court’s stay
Dredging work in Adam’s Bridge area, the controversial part of the project, was stopped from September 2007 in the wake of an interim stay granted by the Supreme Court based on petitions filed by individuals and groups opposed to it.
Source: Hellenic Shipping
