** Sagar Sandesh print version ceases to be published from December 31, 2017. New look E-paper would be available from Jan. 1, 2018 onwards. free of cost.**

Poompuhar shipping corporation efforts to buy ship stymied by Tanjedco's top bureacracy

Tamil Nadu Chief Minister Edapadi Palaniswamy is keen to replace the ships of the state owned Poompuhar Shipping Corporation that will go to the scrap yard early next year but the state electricity board's top bureaucracy has stymied the proposal so far.

The two ships of the Corporation, the first coastal shipping company floated by the Tamil nadu government way back in 1974, Tamil Anna and Tamil Periyar are set to reach the scrap yard after ferrying coal from Bengal Bihar coal fields to thermal plants in the state for the past 44 years. The third ship Kamaraj was already scrapped last year.

Sensing the scrapping of all the vessels of Poompuhar shipping corporation, domestic ship owner whose eleven ships have been chartered by the Corporation for bringing coal see a golden opportunity to jack up their freight rates. Further the domestic coal handling operations is set to increase by six million tons this year following the central government's decision to stop coal imports.

It was in this context the Poompuhar Shipping Corporation which worked almost like an subsidiary of Tamil Nadu power generation and distribution corporation (TANJEDCO) put up a proposal to buy ships to replace those facing the hammer. The state chief minister Palaniswamy who holds the portfolio of Ports is keen on the acquisition as it makes abundant economic sense to go for the acquisition. The proposal is vetoed by the TANJEDCO's top bureacracy.

With the shipping industry facing a downturn, second hand ships are available in the range of Rs forty to fifty crores. The Corporation put up a proposal to the Tanjedco for purchase of ships but the proposal was shot down by its top bureacracy. Given the cost of ships in the international market having touched a rock bottom due to recession in the industry, the corporation could recover the capital costs within two years, TANJEDO was told.

The Corporation also suggested preferential allotment of TANJEDCO's business of ferrying coal once it acquired the new vessels. Tanjedco's top bureacracy in their response said the newly acquired vessels can participate in the tender floated by them and will be allotted business only if they are attractive cost wise. The proposal was put on the backburner.

The next proposal floated was Tanjedco itself could buy the ships and Poompuhar Shipping Corporation would operate them. This was also shot down on the ground that the TANJEDCO's accumulated losses have touched Rs eighty thousand crores as on date.

Meanwhile the private ship operators are waiting to make a kill once the corporation scraps the two vessels early next year and had to depend entirely on the chartered ships to carry on the coal handling operations. At present corporation is chartering eleven vessels but this number will go up once the two ships of the corporation is scrapped and volume of coal handled will go up by six million tons a year.

The working cost of corporation's own vessel per day is around Rs six lakhs a day. The chartered vessel which costs around Rs 7.5 lakhs a day may go up to Rs nine Lakhs the source said.

In terms of freight the cost per ton of carrying coal from Paradip port in Odisha to Ennore is currently rs 160 per ton. This is likely to go up to Rs 220 per ton.

in case of Haldia port the freight rates are expected to go up from Rs 350 per ton at present to Rs 450 per ton.

The Corporation is currently spending a sum of Rs five hundred crores on freight charges per year.

The Poompuhar Shipping Corporation of the state government might face closure once it scraps the vessels as Tanjedco would jettison them by chartering vessels 100 per cent at higher costs. Should the Shipping Company which had pioneered coastal shipping of coal nearly forty five years ago should be allowed to fold up unceremoniously especially when the Centre is giving a thrust to coastal shipping as a matter of policy.

Copyright © 2017 PORT TO PORT - Shipping Services Portal ( Sagar Sandesh ). All rights reserved.

Follow Us