Officials said the Union government would directly put in some equity besides asking Ennore Port Ltd and Port Trusts of Chennai, Paradeep, Tuticorin and Vishakapatnam to bring in funds. The governments equity is expected to be about 30-50 per cent.
Touted as Indias Suez Canal, the Sethusamundram project will enable sea traffic from the east coast to reach west without having to go around Sri Lanka. It will enable ports on the east coast to attract more ships.
Shipping secretary DT Joseph said the five ports which were likely to benefit from the project would be asked to be part of the project. The SPV can recover investment through levy of user charges on ships taking the canal route.
Shipping minister TR Baalu had cited the project as the reason for DMKs insistence on getting the shipping portfolio. He had said that his party wants to see through the project, which was originally conceived in the 19th century.
Currently, ships have to go through an additional distance of more than 400 nautical miles around Sri Lanka and waste more than 36 hours due to the shallow water across the Adams Bridge near Rameshwaram and in the Palk Strait. The construction of the canal will facilitate movement of vessels of draught up to 12.80 metre.
The Tuticorin Port Trust has invited bids from consultants and financial advisory firms for preparation of detailed project report by reviewing the earlier investigation studies and conducting relevant studies for the project.
The Nagpur-based National Environmental Engineering Research Institute (Neeri) has already conducted environmental impact assessment studies, shallow seismic survey, hydrographic survey and techno economic study for the project. The DPR has to be completed in three months from the date of issue of work order.
The expected length of the canal is 45 nautical miles. It is likely to be off Pamban, 300 km south of Chennai near Rameshwaram, connecting Gulf of Mannar and Palk Strait.
The project was first conceived by commander of Indian Marines AD Taylor in 1860 to avoid circumnavigating Sri Lanka. After independence the project failed to take off as technical doubts remained. The channel will be dug through the sea. Canals like Suez and Panama have been dug on the land. We will need to look for global expertise to take up the task, said a marine expert.
The canal will reduce the distance between Kanyaku-mari and Kolkata from 1357 nautical miles to 1098. Distance between the ports of Tuticorin and Chennai will come down from 769 nautical miles to 335.