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
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.
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.