Thoothukudi, long known as the ‘Pearl City’, is steadily sculpting a new identity, rediscovering its long-ignored potential to emerge as a major maritime-manufacturing hub in Tamil Nadu. A proposed greenfield shipyard in the district is envisaged as the anchor for a new industrial ecosystem in southern Tamil Nadu. The comparison being drawn these days is with Ulsan, the South Korean industrial city known for its shipbuilding and wider industrial ecosystem. Thoothukudi is progressing towards that path, thanks to its strategic location and industrial base, with the proposed mega shipyard expected to serve as the catalyst.
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With an investment of about ₹38,000 crore and an envisaged annual capacity of 2.5 million Gross Tonnage (GT), the project is among the major industrial developments proposed for southern Tamil Nadu. Its significance, however, is expected to extend beyond the shipyard itself, with ancillary industries and supporting manufacturing and service activities expected to develop around the anchor facility.
A tripartite Memorandum of Understanding (MoU) was recently signed for the development of India’s first mega greenfield shipyard in Thoothukudi. The MoU was signed between HD Korea Shipbuilding & Offshore Engineering Co Ltd (HD KSOE); National Shipbuilding and Heavy Industries Park, Tamil Nadu Limited (NSHIP-TN), a Special Purpose Vehicle (SPV) jointly promoted by V.O. Chidambaranar Port Authority and State Industries Promotion Corporation of Tamil Nadu (SIPCOT); and Sagarmala Finance Corporation Limited (SMFCL), a Government of India enterprise under the Ministry of Ports, Shipping and Waterways.
According to a Revenue Department official, in the first phase, around 1,700 acres of land has been identified in the revenue villages of Mullakadu (1), Mullakadu (2), and Pazhayakayal. The identified land comprises 1,660 acres of government poramboke land and 40 acres of patta land.
The project has recently moved beyond the conceptual stage with the work on a detailed feasibility report (DFR) being taken forward. VOC Port Authority has issued a work order for the DFR, in consultation with HD KSOE, and the inception work has begun at the proposed site. At the same time, a Request for Proposal (RFP) has been floated, inviting global consultants to prepare the detailed project report (DPR), bringing international expertise into the planning and wider maritime manufacturing ecosystem.
Government order
The government order for the transfer of around 1,700 acres for the first phase has been given to SIPCOT, which will build the common infrastructure along with VOC Port Authority.
The significance of the project, however, lies beyond the shipyard itself. A large shipyard can generate demand for a network of industries involved in steel fabrication, marine equipment, electrical systems, welding, machinery and several others. Such an ecosystem, if successfully developed, could create opportunities for small and medium enterprises in and around Thoothukudi district and potentially extend the industrial impact to neighbouring districts. It is this multiplier effect that makes the Ulsan comparison significant. But such a transformation also comes with questions over land, livelihood, and rehabilitation.
There has been concern over the extent of salt-pan land within the proposed project area and the possible impact on the livelihood of salt-pan labourers, producers, and fishermen. Of the 1,660 acres of government poramboke land available, 455 acres had been leased out to Tuticorin Alkali Chemicals and Fertilizers Limited, a sister concern of SPIC, Thoothukudi, and 300 acres to salt producers for the salt pans operated by Kovalam Thanpaadu Uppu Urpathiyalar Sangam and Ponmadasamy matrum 107 Nabargal. Over 150 acres utilised by salt producers are reportedly watercourse poramboke land, according to the details available with the Revenue Department.
Enumeration in affected area
A Revenue official said the district administration has undertaken an enumeration of the people dependent on the affected area, including salt-pan workers, fisherfolk families, and salt producers. He said the enumeration identified around 50 fishermen families, 350 labour families, 447 labourers, and 109 salt producers. He said officials have held discussions with the stakeholders of the proposed site on the rehabilitation and compensation measures proposed by the government. He added that the proposed package includes house site pattas and government-constructed pucca houses, one-time resettlement assistance, and support for fishing boats and outboard motors for the affected fishing families.
For salt producers, the package includes alternative sites in the Vaippar region, development of essential infrastructure for salt production, and one-time resettlement assistance along with other assistance. While for the salt-pan labourers, the rehabilitation measures include skill development and vocational training in maritime and allied trades, priority employment opportunities in the anchor and ancillary sectors, and the option of employment for one eligible member of each family in the industrial cluster or financial assistance through a one-time lump-sum assistance. The official noted that the Revenue Department has recently submitted an estimate of funds required for implementing the rehabilitation measures and addressing other demands raised by stakeholders. For a project that promises to create a new industrial economy, ensuring that people whose livelihood is affected are able to participate in that new economy will be a critical component.
The proposed project is expected to create 15,000 direct jobs upon stabilisation, apart from thousands of jobs through ancillary industries. The scale of employment generation could potentially make skill development one of the most important components of the project. This is expected to strengthen the port-led economy of the State and Thoothukudi’s position as one of the great maritime industrial clusters in the country.
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Thoothukudi has a long association with the sea. People in the coastal belt have experience in fishing, boat-building, and marine-related activities. But building large commercial vessels requires specialised skills in areas such as coded welding, steel fabrication, electrical work, and several other specialised trades. This draws attention to the major question: will there be any skill development training for local youth?
Susanta Kumar Purohit, Chairperson of VOC Port Authority, said it had already demonstrated that industry-linked training could lead to employment. He added that a dedicated curriculum would be developed in the skill development programmes provided by the Port Authority, covering areas such as coded welding, steel fabrication, and pipe-fitting, so that local youth could be trained for employment opportunities expected to emerge in and through the proposed shipyard.
A senior official of Guidance Tamil Nadu said there were also active discussions on human resource requirements and action would be taken to develop the workforce required for the project.
Focus on employment opportunities
If the proposed shipyard is to become an anchor for the southern economy, its benefits will depend partly on how effectively local students and youth are connected to emerging employment opportunities. At the same time, the project could also create demand for a new generation of small and medium enterprises.
Sankar Marimuthu, president of the All India Chamber of Commerce and Industries, Thoothukudi, said the familiarity of people in and around Thoothukudi with country boat and mechanised fishing boat construction could provide a better foundation for developing the manpower required for the shipbuilding sector. He added that the proposed shipyard could change the livelihood of the people in the region by creating opportunities beyond traditional industries. “Through VinFast, the e-vehicle manufacturer, we are slowly creating an ecosystem for automobile industries in Thoothukudi. Similarly, the proposed shipyard can take the district to a higher level, with further increase in the GDP of the southern districts and the State,” he said.
Faster industrial growth
Edwin Samuel, former chairman, Confederation of Indian Industry (CII), Thoothukudi Zone, said the proposed shipyard is likely to accelerate the industrial growth of Thoothukudi in the coming years. He said the project should be viewed along with other major projects coming up in the region, including the spaceport at Kulasekarapattinam, as these projects could together create a broader industrial and technology ecosystem in southern Tamil Nadu.
Mr. Purohit said the competitive advantage as a shipbuilding destination comes from a combination of scale, strategic location, Thoothukudi’s ability to be an all-weather port, its existing port capabilities, and ability to design a modern shipbuilding ecosystem from the ground up. He added that the proposed development would be located beside an operating all-weather port in India’s southern part, close to major international shipping routes, and with access to deep offshore waters.
He further said Tamil Nadu’s wider industrial strength could also complement the project. The State has an established engineering and manufacturing base, road, rail and air connectivity to the district, and a large technical workforce. These factors could help the shipyard move beyond being an isolated manufacturing facility and become part of a large supply chain.
A helping hand: There has been concern over the extent of salt-pan land falling within the project site and the possible impact on the livelihood of salt-pan labourers and fishermen. The government has worked out a compensation and rehabilitation package.
| Photo Credit:
N. RAJESH
The real economic impact of the proposed project will not be measured only in terms of the number of vessels constructed in the shipyard. It will also depend on how many ancillary industries, engineering companies, logistics firms, and other service providers emerge around it. For Thoothukudi, this could create a new layer of industrial activity around its existing port-led economy. Mr. Samuel of the CII concurred. He added that the district already has a strong industrial base in sectors such as automobile manufacturing. He emphasised that the proposed shipyard, along with other emerging investment, could therefore add another industrial dimension to the district through increased employment opportunities and real estate development. The project also fits into the Centre’s broader vision of strengthening India’s domestic shipbuilding capacity.
The proposed shipyard could turn the port city that has traditionally been associated with pearls, salt, fishing, and thermal power plants into a major maritime-manufacturing destination.
The senior official of Guidance Tamil Nadu said that if the project is realised as envisioned, it can transform the image of not only Thoothukudi but also that of the southern districts. This would be similar to the development of an automobile manufacturing ecosystem around Sriperumbudur after the entry of Hyundai.
Mr. Purohit clarified that the shipyard is the anchor of the vision, but not the entire vision. The objective is to develop Thoothukudi as an integrated maritime manufacturing cluster.
The road from Ulsan to Thoothukudi need not be measured by comparison across acres or investment figures. Its eventual impact will also be measured by whether the proposed shipyard can create an industrial ecosystem capable of transforming the economic geography of the State.
