Despatched to the Andaman Islands to assess their potential for the setting up of a port that could provide facilities to mercantile vessels in passage through the Bay of Bengal, and fortified refuge to the British navy in times of war, Lieutenant Archibald Blair (1752–1815) set sail for the Andamans from Calcutta on 20 December and reached the Andaman waters on 29 December 1788. In the three months he was there, he surveyed the west coast of Great Andaman, moving southwards from Interview Island to Port Campbell, and round MacPherson's Strait to the east coast.

Blair's report, with a precise hydrographic description of the coastline, a judicious assessment of the harbours, and a remarkably faithful account of the geophysical features of the island, carried a recommendation that the capacious harbour to the south-east of South Andaman would be the best site to locate a settlement; and so impressed were his superiors at Calcutta that within a space of three months, by September 1789, on a report dispatched on 9 June 1789, he found himself back in the Andamans, with the commission that he himself undertake the task of setting up the colony in the harbour of his choosing, and christen it Port Cornwallis. With him, on this expedition, were Lieutenant Colebrooke and Lieutenant Wales, and a detachment of about 200 mechanics, craftsmen, sepoys, and labourers.

Choosing as his site Chatham Island , a small island about 12 acres in area, set well within the harbour, connected to the main island by a causeway at low tide, and easy to defend against hostile tribals, Blair began by clearing the forest, planting grass on the hilltops and vegetables and fruits on the lower slopes, and erecting shelters for the men, storehouses for the equipment, and a hospital. The work was undertaken with such managerial skill—supplies and replenish-ments coming in from Penang and Calcutta, visits to the mainland being orga-nized for the settlers, and the autochthons being fended off with gifts, gestures of friendship and the minimum of force—that within a year, Blair was able to move on to constructing a wharf, laying a road from Phoenix Bay to Navy Bay, planning agriculture on the island's westerly side, and considering the possibilities of the timber trade. By 1791, the settlers were bringing in their families, and it seemed that the Andamanese had reconciled to their presence. At any rate, Blair seemed to have thought so, and wrote to Calcutta in 1792 to that effect. The most remarkable success of the new settlement in chatham Island lay in its relative freedom from ill-health.