Free time given to the coastal trade should be increased to seven days from the present two days: Mr. J.J. Thomas
Sagar Sandesh: Tuticorin port as a major port has been in existence in South
Tamil Nadu for the past forty years. The area has abundant power supply and
skilled labor. Land for setting up industries is not a problem. But industries
are not coming up in the region despite the entire infrastructure you need to
start an industry. How do you explain the phenomena?
Mr. P. Jeyanth Jason Thomas: The city lacks air connectivity. The city has a small airport and
limited flights as of now. Only ATRs could land at the airport now during day
time. The runaway is being expanded to allow landing of bigger aircrafts and
night landing facility is to be introduced. Land acquisition for Airport
expansion projects are at final stages of execution.
The local chamber of commerce is pressing early execution of
Madurai-Tuticorin Industrial Corridor which includes dedicated railway line.
The doubling of railway tracks between Madurai and Tuticorin is likely to be
completed in a few years.
SS: What has been the progress of the Coastal Industrial Zone
promised by the Shipping Ministry to be set up near Tuticorin port? Has it
taken off or got stuck like other industrial zones in the country?
Mr.P.JJT: The developed lands offered by the Port are not attractive to the
industries as cheaper land is available in the vicinity to set up industries.
SS: What has been the contribution of Tuticorin port to Coastal
Mr.P.JJT: The port has made
significant contribution to Coastal Shipping. Cargo like cotton, tiles,
chemicals, wheat and pulses moved from ports in Gujarat to Tuticorin. On an
average, three ships carrying coastal cargo arrive at the port every week. They
carry six thousand TEUS which can be easily increased to12,000 TEUS a month, provided the Port
administration took steps to increase the free time to the trade.
Free time given to the coastal trade
should be increased to seven days from the present two days. This has been the demand of the trade
for the past several years.
SS: I am told the Tuticorin
port has devised an innovative software to enable the exporters to get quick
GST refunds, Can you elaborate.
Mr.P.JJT: Since GST came into force, exporters had lot of challenges in
getting IGST refunds from the Customs authorities. One of the key reasons for
the delay is due to Export General Manifest+ errors, committed by the trade.
The Tuticorin Customs Brokers Association, in consultation ;with the
stakeholders devised two unique software which helped the exporters to file
error free export general manifests so that they could get the refunds from the
Customs within two months. The software unique to Tuticorin Port has helped the
exporters to improve their cash flow.
A view of Tuticorin port
The practice followed at Tuticorin port at that time when GST was
introduced was that the Customs brokers hand over a copy of shipping bill to
shipping lines and thereafter the shipping lines type the Export General
Manifest ( EGM ) and transmit the same to the Vessel Operator. And they file
the EGM. The typographical errors during
preparation of EGM data resulted in mismatch with shipping bill data in ICEGATE
and thereby resulted in EGM error.
To rectify the EGM errors coordinating with the Shipping lines, the
Vessel Operators and Customs was extremely difficult at that time. With the
pressure mounting on Customs brokers for quicker release of IGST refunds and the challenges faced by
customs brokers in rectification of EGM errors made the Customs brokers
association think about an alternative
to mitigate the difficulty and facilitate the process.
The thought process was to capture the EGM data electronically at the
time of filling the Shipping bill and transmit the same to the Shipping Lines
Tuticorin Customs, which had permitted up to seven day time for
filling the EGM subsequently, issued another public notice which mandated
filling of EGM prior to the sailing of the vessel.
Moreover, Tuticorin Customs put in a procedure wherein the EGM should
have particulars all the Containers and all the Shipping Bills, and only after
verification, the ships will be allowed to sail out. This seriously impacted
the advantage of Tuticorin port, which allowed Direct loading of Containers
till about seven hours prior to sailing of the Vessel.
Due to the sudden and drastic change in Operating Procedure, the
Shipping lines preponed the Gate in cut off and it affected the traffic moving
out of Tuticorin especially the garments, perishable cargo such as Onions,
vegetables and Sea foods.
EGM PRO devised by a private firm in association with the Tuticorin
Customs Brokers Association was a right solution at the right time.
1As data is
captured electronically, EGM errors have drastically reduced (from Hundreds of
errors per vessel to hardly five to six errors per vessel)
2As data is
captured and transmitted electronically, the EGM preparation time got
drastically reduced and vessel Operators are able to comply with the rule of
filling the EGM prior to sailing of vessel as well as extend cut off for direct
loading even after vessel berthing and even up to five hours prior to the
sailing of vessel.
Informatively, the EGM PRO was developed by a software company named
Inspire in association with Tuticorin customs brokers association.
One more mechanism was also devised CODEX by the Tuticorin Chapter of
National Association of Container Freight Stations.(NACFS)
Codex is a software platform based on barcode technology was developed
by NACFS Tuticorin chapter and it captures the key information of Container
Freight Station stuffed and Factory Stuffed export containers handled at CFS
such as shipping bill number, Container number in the CFS Gate out pass.
After GST came into force and IGST refunds got delayed due to EGM
errors, Customs and Port too facilitated a data capturing system at the Port
gate to capture the relevant data for export containers arriving from Special
Economic Zones, Inland Container Depots and by Rail too.
Codex developed a wonderful process transmitting the EGM related data
to MLOs and vessel operators.
operators to compare the EGM data received through Codex platform and EGM data
prepared using EGM PRO, get the mismatch report and enable them to achieve
higher accuracy of EGM data before filling it into Customs Systems.
authorities to compare the EGM data in Codex platform and EGM filled by vessel
operators for the particular vessel, evaluate and issue Port clearance of
Codex was developed by a software company by name Kale Logistics in
association with National association of container freight stations Tuticorin
The implementation of these software, first of its kind to be
implemented by a port in India has helped exporters to improve the cash flow to
their company as the refunds were made available by the Customs on an average
of less than two months.
Summary of the complete Interview
of the interview with Mr Jeyanth Thomas President Tuticorin Customs brokers
VOC Port at Tuticorin which had earned all the laurels that go with a successful
major port like flourishing container trade, three mainline services calling at
the port connecting the East Coast of United States, Europe and a direct
service to Chinese ports via Singapore besides registering high growth in
coastal shipping during the last decade is now a feeder port to Colombo
operating seven sailings a week to Colombo, besides a weekly service to Jebel
advantage the problems of the Port, Cochin port poached its hinterland in
Western Tamil Nadu by offering hefty discounts directly to shippers on
Containers. Consequently the port lost about 2500 TEUs in volumes per month.
Ban on extraction of granite and rare sands like garnet sands and illuminate
also caused considerable loss to the container volumes handled.
closure of the copper smelter of Sterilite has also contributed to loss of
business for the port.
Jeyanth Thomas, President of VOC Port Tuticorin customs brokers association who
has been associated with the port for the past two decades explains the various
facets of the portís development journey in the last three decades..
port situated near the landís end with limited hinterland had handled nearly
seven lakh TEUs during the last financial year. The two terminals at the port
handled nearly 3.5 lakh TEUs during the first six months of the current
financial year. However the volumes handed by both the terminals account for
fifty per cent of the capacity. This is the pattern in the most of the
container terminals in the east coast. The private ports in the region are
however trying to buck the trend.
port had made forays into container business way back in 1999 when PSA ĖSical
commissioned an exclusive terminal for handling containers. From a volume of
1.5 lakh TEUs per annum during the initial years, the terminalís turn-over
increased four-fold in the first ten years.
terminal sharing the revenue with the port is based on royalty model, one of
the very few ports in the country, opting this particular method of sharing
revenue. As the terminal handling charges were fixed low, the terminal pressed
for revision of rates within three years of operation. This was however, was
turned down by both the Port and the Tariff Authority of India. The legal
battle between the port and the terminal continued and soon the terminal
claimed that more volume of containers they perform at the terminal, more
revenue they lose.
the terminalís productivity was steadily dropping, trucks which used to be
cleared in three hours for handling of cargo inside the port took 10 to 12
hours creating a man-made congestion.
move to start a second container terminal was put on hold and tenders called
for the purpose were withdrawn in 2008 on grounds of world-wide recession. The
trade started picking up volumes around 2010 when the port faced a peculiar
situation with cargo piling up at port premises with less capacity in the
terminal to handle them.
the mainline services operating from the port started skipping the port due to
lack of adequate draft. While the main line service ships needed a draft of at
least fourteen meters, the available draft in the port was around 10.5 meters
first liner to skip the port was the weekly direct service to East Coast of
United States including New York. The next to go was the service to Europe run
on weekly basis. The last main liner to call of Tuticorin port was the service
to Chinese ports via Singapore and Port Klang, The vessel operator said the
service is not commercially viable and therefore wound up.. This happened
around 2009. After this development, the Port became feeder port with seven
sailings to Colombo per week and a weekly service to Jebel Ali.(Dubai)
transshipment business, he said the port cannot compete either with
Krishnapatnam private port or Colombo since both the ports have distinct
advantages over Tuticorin. (Krishnapatnam has emerged as a leader in
transshipment business in the region handling 2500 TEIS a month.)
attracting big container ships because of being a deep port, Ships from
Krishnapatnam have the advantage of moving directly to the far-east ports while
from Tuticorin port they have to circumnavigate Sri Lanka to reach the same
transshipment requires operation of multiple ships at a time, the terminal
should have sufficient length for the operations which is not available in
being an established player in Transhipment business catering mainly to
containers coming from the East coast ports of India. Colombo portís deepest
available draft is eighteen meters and on an average most of the container
berths have 15 meters draft. The Dakshin Bharat Gateway Terminal in VOC Port
Tuticorin has declared a draft of 13.1 meters draft. This is the deepest berth
in the port.
up he said the port in the past did not take correct decisions at the right
time. He cited the instance of the decision to scrap the tender for second
container terminal in 2008 cited World-wide recession when the trade was
picking up in the port.
Timely measures if taken to increase the draft
could have seen the continuance of main line vessels calling at the port.
Sorting out the revenue sharing problems with PSA-Sical in time instead of legal
option could have improved productivity; scrapping of Outer harbor project
sanctioned in the 2014 Union budget and not giving shape to Optimization of the
inner harbor project.
of rail connectivity to Tuticorin port is not a major issue for container
traffic but it is certainly required for transporting bulk goods. A major port
of the government has a single railway line sharing both freight and passenger
trains to the nearest commercial city of Madurai. The coastal railway line from
Chennai to Tuticorin was sanctioned ten years ago by the railway but is yet to
take off. The doubling of railway track from Madurai to Tuticorin was announced
two years ago but there is no work on the ground by Rail Vikas Nigam Limited,
entrusted to undertake the project on behalf of Southern Railways..
for movement of containers, the trade is content with the road connectivity to
link the hinterland. But to cater to incremental growth in port traffic, the
trade requires six lane road to Madurai, Salem, Karur,Tirupur and Coimbatore.
The existing two lane road from Dindigul to Coimbatore should be immediately
upgraded to four-lane.
trade in South Tamil Nadu favors early completion of Sethu- Ship Canal Project
which remained abandoned for the past eight years. With the early completion of
the project, the coastal shipping in the region will get a boost. The trade
could increasingly use coastal ship option in preference to roads since the
canal project will reduce the journey from East to West Coast ports by one and
half days. This will considerably reduce the ship freight for coastal cargo.
Direct Port Delivery of imports and Direct Port Entry of exports designed by
the government to cut transaction costs will not make much headway in VOC Port
due to local conditions. The direct port delivery which has been in vogue in
major ports for the past one year accounts for hardly one per cent of the
imports in the port. According to the trade estimates, hardly 20 per cent of
exporters could switch over to direct port entry since the export cargos
require inspection by enforcement agencies.
the major port has been functioning in the region for the past forty years
besides the availability of abundant power, land and cheap labor, industries
have not come up in the region due to the absence of a full-fledged airport
with night landing facilities. The Airport expansion work is expected to take
off shortly since the state government has completed the land acquisition work
Shipping Ministryís industrial zone project along the VOC port also has not
made much headway because of the availability of cheap land around the port.
other major ports, Coastal Shipping has done well at VOC Port. Three ships from
Gujarat arrive here every week carrying cotton,Tiles, Chemicals, Wheat and
Pulses. The volumes handed are 6000 TEUs a month. The volume could easily be increased to
12,000 TEUs a month provided the port administration increases the storage free
time from the current two days to seven days.
VOC Port Tuticorin has an interesting incentive to offer to Exporters. The
Portís Customs Brokers Association in collaboration with a private firm and
portís stakeholders developed two distinct Softwares which would help them to
get the GST refunds within two months.