Essar Wins ₹22.76 Billion Kandla Terminal Award for 18.33 Million Tonnes
Essar Ports has received a letter of award to develop an 18.33-million-tonne-a-year multipurpose cargo terminal at Tuna Tekra, Kandla, giving the group a large new foothold at India’s busiest major port by annual tonnage. The ₹22.7606 billion project—₹2,276.06 crore—would add four deep-draft berths on Gujarat’s western coast under a 30-year public-private concession.
The 21 October 2026 company announcement says Essar emerged as the highest bidder in a global tender run by Deendayal Port Authority, or DPA. This is an award, not a completed terminal: the concession, financing, environmental work, construction and commissioning still have to move from documents into operating infrastructure.
What Essar has actually won
The proposed terminal is designed around four 300-metre berths, giving 1,200 metres of total berth length. An 18-metre draft would allow vessels of up to 170,000 deadweight tonnes, placing the facility in the range required for large Cape-size bulk carriers. Commercial operations are expected by 2031.
Essar is responsible for more than ₹15.5257 billion of the estimated investment. DPA’s ₹7.2349 billion contribution covers common-user infrastructure including dredging of the approach channel, berth pockets and turning circles, as well as a common approach road. The division matters because the operator cannot deliver the project alone: marine access and landside connections are part of the same operating system.
Metric | Published figure |
Total estimated project cost | ₹22.7606 billion (₹2,276.06 crore) |
Essar Ports investment | More than ₹15.5257 billion; about 68.2% of total |
DPA common-user infrastructure | ₹7.2349 billion; about 31.8% of total |
Annual design capacity | 18.33 million tonnes |
Concession and target operation | 30-year BOT; commercial operation expected by 2031 |
The term “multipurpose” is important. Essar has not disclosed a committed commodity mix, minimum customer volume or capacity reserved for any particular shipper. The terminal could handle dry bulk, breakbulk and project cargo, but readers should not interpret its 18.33-million-tonne design capacity as a promise of equivalent annual throughput from opening day.
The scale in Kandla’s existing traffic
DPA reported 160.11 million tonnes of cargo in the 2025–26 financial year, the highest annual volume it had recorded. The proposed terminal’s nameplate capacity is therefore equivalent to about 11.4% of that historical throughput. This is a scale comparison, not a forecast: capacity and cargo handled are different measures, and the port’s total traffic may change materially before 2031.
The calculation also puts Essar’s expansion in context. The company says its retained ports portfolio currently represents approximately 60 million tonnes a year across India, Indonesia and the United Kingdom. Adding 18.33 million tonnes would take that gross operated-capacity figure to 78.33 million tonnes—about 30.6% above the current disclosed base—assuming the new terminal opens as planned and no offsetting portfolio changes occur.
On the announced cost and capacity figures, total project capital equals roughly ₹1,242 for each tonne of annual design capacity. Essar’s own disclosed commitment equals about ₹847 per annual tonne. These ratios are useful for comparing the construction envelope with capacity, but they do not include future maintenance capital, working capital, financing costs or cost escalation.
What the ₹61-per-tonne bid could mean
DPA said Essar offered a royalty of ₹61 per tonne. At full 18.33-million-tonne utilization, simple multiplication produces about ₹1.118 billion—₹111.8 crore—of annual royalty payments. That is an Agrilinkage scenario, not projected revenue: actual payments will depend on throughput, the final concession terms, any indexation and the definition of chargeable cargo.
The royalty structure transfers part of the volume risk to the concessionaire. A terminal that fills rapidly can generate substantial payments to the port authority while spreading fixed costs across more cargo. A slower ramp-up would leave Essar carrying a larger burden per tonne, particularly after debt service and operating costs are considered.
Why agricultural and food supply chains should watch
Kandla is not an agriculture-only port, but food and farm inputs are meaningful parts of its cargo base. DPA’s official throughput statement said fertilizer volumes grew by about 32% in 2025–26. Its administrative reporting also records foodgrain and maize movements alongside salt, petroleum products, coal, steel, timber and containers.
A deeper multipurpose terminal could expand optionality for fertilizer and fertilizer raw materials, grain, salt, steel and other bulk or breakbulk trades. Larger vessels can reduce ocean freight per tonne when cargo parcels, draft, storage and inland evacuation all support the economics. But the award does not reserve space for fertilizer or grain, and it does not establish lower delivered costs. Those outcomes depend on customers, handling systems, rail and road capacity, storage and vessel schedules.
The site is also planned beside the 2.19-million-TEU Tuna Tekra container terminal awarded to DP World. The two projects use different capacity units and serve different cargo mixes, so tonnes and container-equivalent units should not be combined. Their adjacency nevertheless shows DPA building a broader new port cluster rather than a single isolated berth.
The constraints between award and operation
The 2031 target leaves a substantial execution period. The next milestones are the concession agreement, environmental and coastal approvals, financial close, engineering and construction awards, dredging, approach-road delivery, equipment installation and customer contracting. Delays in one component can reduce the value of the others: a finished berth without adequate draft or cargo evacuation is not a fully functioning terminal.
Demand is the second constraint. DPA has described occupancy at existing dry-cargo berths as above 90%, compared with an indicated ideal level near 70%. That supports the case for relief capacity, but berth occupancy is not identical to profitable demand for a new concession. Vessel bunching, downtime, cargo seasonality and inefficient evacuation can all raise occupancy without guaranteeing a stable long-term volume book.
Environmental performance will also be measurable rather than rhetorical. Essar says the project will comply with applicable requirements and the Green Port Policy. The practical tests will include dust control, enclosed or covered handling where appropriate, water management, vessel and equipment emissions, dredging impacts, energy use and transparent monitoring.
What happens next
Execution of the final concession and disclosure of its traffic, tariff, royalty-indexation and termination terms.
Environmental clearances, financial close and the appointment of engineering and construction contractors.
Evidence of committed cargo customers and the handling systems selected for specific commodities.
DPA’s delivery timetable for dredging, turning circles and the common approach road.
A commissioning schedule that shows how capacity will ramp toward the stated 18.33 million tonnes rather than assuming full utilization immediately.
For related infrastructure context, see Agrilinkage’s coverage of the Maersk–Hateco northern Vietnam rail-freight study, the P&H grain-storage expansion at the Port of Québec and A.P. Moller Capital’s Portek terminal-network acquisition.
Methodology and sources
Agrilinkage calculated investment shares, capacity comparisons, capital per annual tonne and the full-utilization royalty scenario from the figures in Essar Ports’ award announcement. Historical port throughput and commodity context come from Deendayal Port Authority and India’s Ministry of Ports, Shipping and Waterways. All calculations are rounded; capacity comparisons are not forecasts of actual cargo.
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