Summary
Essar Ports has received a letter of award to develop an 18.33-million-tonne annual capacity multipurpose terminal at Tuna Tekra, Kandla. The ₹2,276.06-crore project will proceed under a 30-year public-private partnership, adding cargo-handling infrastructure as Deendayal Port Authority expands facilities outside Kandla Creek.
Award advances multipurpose terminal development
The Essar Tuna Tekra terminal project moved into its next development stage on 21 October 2026, when Deendayal Port Authority issued the company a letter of award.
Essar emerged as the highest bidder in a global competitive bidding process. The project will follow the Build, Operate and Transfer model, with a 30-year concession.
The winning offer includes a royalty of ₹61 per tonne payable to the port authority. This establishes a cargo-linked payment obligation within the commercial framework for the terminal.
Investment shared between developer and port authority
The estimated project cost is ₹2,276.06 crore, comprising approximately ₹1,552.57 crore of investment by Essar Ports and ₹723.49 crore by Deendayal Port Authority.
The funding structure combines private terminal development with public investment in supporting infrastructure. It also makes the authority’s contribution an important part of delivering the complete facility, alongside the concessionaire’s own works.
These figures represent estimated project investment. The award announcement does not establish that the expenditure has already been incurred or that the terminal is operational.
Four berths planned for larger vessels
The proposed terminal will have four berths of 300 metres each, providing a combined waterfront length of 1,200 metres.
Its design provides for Capesize vessels of up to 170,000 deadweight tonnes and draft capability of up to 18 metres. Deendayal Port Authority will provide supporting infrastructure, including channel, berth-pocket and turning-circle dredging, together with a common approach road.
Essar expects the additional infrastructure to ease pressure on existing dry-cargo berths. Development and operations are to comply with applicable environmental requirements and the Green Port Policy. Essar
For cargo owners, access to larger vessels can create opportunities to consolidate shipments. Whether this produces lower delivered costs will depend on vessel utilisation, handling performance, freight rates and inland transport arrangements.
Earlier approval established the project’s purpose
The multipurpose development has a planning history extending beyond the current award.
In October 2022, the Cabinet Committee on Economic Affairs approved a berth project off Tuna Tekra for cargo other than containers and liquids. That approval envisaged offshore infrastructure capable of handling four vessels simultaneously, with annual capacity of 18.33 million tonnes.
The estimated cost at that stage was ₹2,250.64 crore, with a different division of expenditure between the concessionaire and port authority. The October 2026 announcement provides the current project estimate and investment split.
The earlier approval establishes the development’s intended cargo scope. Although described as multipurpose, the project should be understood within its designated non-container, non-liquid handling role. pib.gov.in
Separate container project broadens Tuna Tekra’s role
Tuna Tekra is also the location of a separate container terminal development associated with DP World.
A concession agreement signed in August 2023 covered a facility designed for annual capacity of 2.19 million TEUs. That project was intended to connect northern, western and central Indian cargo markets with international shipping networks.
Its container-handling function differs from Essar’s multipurpose cargo development. The two projects consequently represent separate investments addressing different segments of the port’s traffic base.
Together, these developments illustrate Deendayal Port Authority’s approach to expanding handling infrastructure at Tuna Tekra. Their commercial contribution will depend on the delivery of terminal facilities and the associated marine and landside connections.
Execution will determine operating benefits
For Essar, the award provides a substantial new development opportunity in its ports business. For Kandla’s users, the potential benefit is additional capacity and greater flexibility in handling larger cargo parcels.
The immediate requirement is to translate the award into an executable project. Construction planning, financing, equipment selection and coordination of shared infrastructure will shape that process.
Once developed, terminal performance will depend on more than berth availability. Storage, evacuation capacity and reliable road and rail connections will influence vessel turnaround and the movement of cargo into the hinterland.
The next milestones will therefore concern concession implementation, construction progress and a confirmed commissioning programme. These will determine when the planned capacity becomes available to trade.
FAQs
What has Essar Ports received?
A letter of award from Deendayal Port Authority to develop the Tuna Tekra multipurpose cargo terminal.
What is the planned annual capacity?
The terminal is designed to handle 18.33 million tonnes annually.
How will investment be divided?
Approximately ₹1,552.57 crore is allocated to Essar Ports and ₹723.49 crore to the port authority.
What vessels will it accommodate?
The design provides for Capesize vessels of up to 170,000 DWT, with draft capability of up to 18 metres.
Is this the DP World container terminal?
No. It is a separate multipurpose development for cargo other than containers and liquids.
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