The Centre has approved ₹430.68 crore (about US$45 million) in dredging assistance for the Syama Prasad Mookerjee Port Authority (SMP Kolkata). The money helps pay for keeping the Hooghly River channels open for Kolkata and Haldia. It also sets out a path for the port to pay for all of its dredging itself.
What Was Approved
The assistance covers expenditure for FY2024-25 and FY2025-26. The Department of Expenditure conveyed the approval in an office memorandum dated 22 October 2026.
Item | Amount |
Total maintenance dredging bill (two years) | ₹764.37 crore |
Central assistance | ₹430.68 crore |
Borne by the port authority | ₹333.69 crore |
The centre is covering about 56% of the bill. The support is reimbursement for past spending. It is not a new dredging contract, and it does not promise extra channel depth.
Why Dredging Never Stops
The Hooghly is a silt-laden river. Without regular removal of sand and silt, the depth available to vessels shrinks, and that affects permissible draught and ship movement planning. The navigation channel is about 232 km for the Kolkata Dock System and 125 km for the Haldia Dock Complex. Maintenance dredging keeps existing access open. Capital dredging, which deepens a channel, is a separate project.
The port has said it spends roughly ₹300–500 crore a year on dredging, according to trade press reports.
Support Comes With Conditions
The central assistance is on a declining path. The port is expected to fund all its dredging from internal resources after FY2030-31. That matches earlier reporting that the Public Investment Board cleared a seven-year dredging subsidy of ₹1,839.41 crore from FY25, with a sunset at FY31.
Assistance from FY2026-27 is also linked to annual targets covering:
cargo handled through public-private partnerships
berth mechanisation
traffic growth
earnings before tax, excluding the dredging subsidy
The aim is to push the port to improve its own finances while it handles a cost it cannot avoid.
The Tender Is a Separate Matter
A current procurement notice invites bids for maintenance dredging in the shipping channel to the Kolkata Dock System. This should not be read as a contract awarded under the ₹430.68 crore approval. The subsidy decides who pays for eligible spending. The tender decides who does the work.
Cargo Growth Raises the Stakes
The shipping ministry reports that SMP Kolkata handled 70.87 million tonnes in FY2025-26, up from 46.29 million tonnes in 2014. The port has set a target of about 74 million tonnes for FY2026-27. During April to February FY2025-26, the Kolkata Dock System alone handled 17.03 million tonnes, up 13.48% on the same period a year earlier. Note that the two figures cover different scopes: the first is the whole port, and the second is the Kolkata Dock System only.
What Shippers Should Watch
Channel availability. Reliable depth and predictable draught help vessel planning on both Kolkata and Haldia.
Port finances. If the port misses its targets, its support can shrink. How it manages costs could eventually affect tariffs and service.
Dredging contracts. Watch the tender outcomes, as the cost and performance of contractors feed back into the port's budget.
The FY2030-31 handover. After that year the port carries all dredging costs, so commercial performance matters more.
Bottom Line
The approval keeps the Hooghly open in the short term. It also tells the port to grow cargo and earnings so it can eventually carry the cost itself.
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