But even as P&O Ports, one of the worlds best-known port construction and management companies, and environmental activists battle for and against a port at Wadhavan (north of Mumbai), the project cost is fast spiralling. Estimated to cost approximately $650 million more than a year ago, it has now climbed to nearly $950 million. Company sources admit that if even if a clearance now comes through, they would have to re-examine the viability of the project, especially since it has become harder and more expensive to access loans abroad.

Still, P&O is unlikely to abandon Wadhavan because it is an ideal location in many respects. The draft at Wadhavan is 20 metres, better than at any other domestic port. This means mother vessels will be able to berth with ease.Considering that a low draft is one of the reasons hindering mainline vessels from calling at Mumbai port, this is an important factor.

Wadhavan is also one of the closest points to the route taken by mainline vessels, which means that they do not have to stray from their lanes too much to make a call. The area is also blessed with a huge rock shelf which will make construction easier.

Given that the location has excellent features for constructing a port, the other driver for P&O is the huge shortfall in port facilities. According to the India Infrastructure Report, by 2006 the country will need to develop 215 million tonnes of additional handling capacity per annum. Of the Rs 15,383 crore required to fund this, only Rs 7,517 crore can be generated internally by existing ports.

Although an efficient port anywhere in the country has tremendous business potential, the west cost is particularly attractive. According to a report prepared by AF Ferguson on the opportunities for the private participation inthe port sector in the country, the north-western corridor -- basically Jawaharlal Nehru Port, Kandla and Mumbai, which account for 64 per cent of the country's container traffic -- have emerged as the fastest growing ports. Since 1991-92, this sector has grown at a compound annual rate of 21 per cent. And the future is in container trade. While the share of container tonnage has increased from 32 per cent in 1991-92 to 46 per cent last year, it is still below the international average of 76 per cent.

One of the main reasons why containerisation has remained stunted in the country is that despite the volume of trade generated the country lacks a proper hub. (A port where containers headed for one destination are collected and loaded on to a mainline vessel, and imports for that region are offloaded, regrouped and loaded onto feeder vessels).

In the absence of a hub, prerequisites being a good draft, no pre-berthing waiting period and extremely quick turnaround, foreign shipping lines have been using JebelAli in Dubai, Colombo and Singapore as hubs. In fact, shipping companies have been complaining that Colombo has been taking away business that is rightfully India's, although, in recent times, JNPT has achieved performance parameters encouraging enough for it to aim at become a hub in the near future. This combination of the need for a hub on the west coast and the tremendous shortage of handling facilities is precisely the niche that P&O is looking to exploit.

Fortunately, for the first time, a policy framework is in place. The centre is well aware that the Major Port Trust Act, an outdated piece of legislation that governs the functioning of the countrys 13 major ports, is responsible for the inefficiency at domestic ports. In the last couple of years it has actively encouraged state governments to formulate policies for private-sector participation in the sector. Since these do not come under the purview of the Act, they are, with their superior performance, expected to meet the demands of tradebetter.

While the need for a hub on the west coast is undisputed, the question remains whether it will be at Wadhavan. The environmentalist lobby cannot be underestimated. They have lots of ammunition: a government notification issued in 1991 declared the area ecologically fragile; the Coastal Regulation Zone (CRZ-I) notification would be violated if the port were to come up; and the regional plan of the area forbids reclamation of land. However, legal experts say that under a recent amendment ports are exempt from the ban on construction activity in coastal areas as by definition ports require a sea front. Therefore, in CRZ (I) construction of a port would not violate any law.

The local population has been woven into the scenery as well. A socioeconomic report claimed that the area had 100 per cent employment, and the local agrarian economy was a thriving one. Dahanu taluka, where the project is located, is also home to several cottage industries, primarily jewellery die-making. While this report wassubsequently withdrawn, another one is underway.

Also the campaign against P&O is remarkably well orchestrated. Activists, through their NGO network, whipped up public support, both in England and Australia, the headquarters of P&O Ports. The campaign was taken to some of P&O's top management who started questioning the wisdom of going ahead with the project.

The legal issues apart, what could eventually tilt the balance in favour of the environmental lobby is local support. Smelling a victory, environmental groups from across the country have been showing up in support, as have labour unions. The labour union at JNPT has supported the anti-Wadhwan moves. Privately, union leaders say that they are not opposed to the port as such, but would like the government to clarify the locational policy for ports and conduct matters in a more transparent fashion. For instance, by revealing project details -- as yet unknown. For P&O, strong support comes from the state government, which is firm that the project willcome through.

For the Justice Dharmadhikari committee, which is examining the case, the decision will be a tough one. A hearing has been scheduled for August 4, one in a series that is likely to go on for some time. But whichever way it goes, time is of the essence.