Capt K.P.Rajagopal is an alumnus of
“Training Ship Rajendra”, passed out in 1979, and has had a sailing career with
the Shipping Corporation of India, as well as
with Cargill’s shipping arm named
Tradex Shipping (OSM) for a period of 17 years on a variety of Merchant ships
like, Tanker, Container, OBO & Bulk
He has a Post Graduate Diploma in Ecology and Environment from “Indian
Institute of Ecology and Environment”.
He served as the Chief Operating Officer
of FILSA SHIPPING ( a joint venture between FESCO, Russia and Indian Partners)
managing a Fleet of 8 vessels on a Liner Trade between India and Far East from
1995 to 2000.
From 2000, he was involved in Maritime
Training and Technical consultancy. He developed 12 Simulator Programs for
Shipboard Navigators: Radar Observers, ARPA & Ship Handling courses. He is a certified instructor for Warsash
Maritime University’s, (Southampton) “Liquid Cargo Handling Simulator”. He has
written a book on “Bridge Resource Management”.
He has drawn up manuals
and implemented “Safety management Systems” for several shipping Companies.
He is an
approved “ABS” & “Indian
Register of Shipping” Security Consultant having Inspected
and assessed the security requirements of over 50 ships (including
Tankers) under the new ISPS code. He has been part of the Team which conducted
the Safety & Security Assessment for the Port of MASSAWA AND ASSAB on
behalf of the Government of ERITREA (AFRICA).
In the year 2005, he was part of an
International Team which did an assessment of Port of Cotonou, Benin Port Operations, Safety and Security under a
scheme Funded by “Millennium Challenge Corporation (MCC)–Govt of USA” Chaired
by Ms Condalisa Rice, the then Secretary of State.
2011 he coordinated the
operation to evacuate 2159 stranded Indian Citizens by Sea from civil war torn
State of Libya, aboard MV Scotia Prince between 22nd Feb 2011 and 10th
March 2011. He played a pivotal role in locating and getting the right ship
chartered to the Ministry of External Affairs (MEA), Government of India,
within hours of getting to know of the requirement. He coordinated all
activities on board MV Scotia Prince and liaised with MEA, Head Owner,
Disponent Owner, Master and Crew on board, trained the Crew in the short time
to adapt to the environment and to board
and disembark the evacuees in the most
efficient and effective manner.
He has been Chairman of The Institute of
Chartered Ship Brokers, (UK), East India Branch and the Nautical Institute,
India South Branch.
He has over decade experience in Project Management
and Port Operations and is the Senior Vice President with IL&FS Maritime.
Interview of Capt K P Rajagopal, Senior Vice President, IL and FS
Maritime Infrastructure Company Limited.
Sagar Sandesh (1) :Can
you give us an update on the Shipping industry which remains stuck with
recession for the past ten years? We are told that freight rates are going up
in the last few months. With the era of alliances taking place in the global
shipping industry, how has it helped to revive the industry? What is your take
on industry’s future in near future?
Capt KPR:We are in ‘Now in an Era of Mergers and consolidation’.
However since 1990’s the Shipping Industry saw very many new comers and the
established market leaders too formed smaller subsidiaries for working in niche
markets. This proliferation took advantage of the sudden Cargo growth which the
World witnessed from early 2000’s, mainly driven by China. Post 2008, when the
World started getting into depression due sub-prime crises, the Cargo growth
started to dwindle. This drop in World Trade was out of Synch with the New
Building Order book. The ensuing supply
demand gap almost wiped out close to 50per cent of the market cap of the Vessel
Valuation. Many big names went under. This has again forced the industry to
introspect and the result is mergers and consolidation.
Slowly the bargaining power (which was with the Cargo interest since
late 2008) is seen shifting ever so slowly towards the Ship Owners. There is a
long way to go to cover the losses suffered in the past 8 to 10 years, but at least
there is light at the end of the tunnel.
The Keys to watch out are (i) Increase in Seaborne Trade (ii) New
Order Book. If these 2 are in synch, then there would be period of relative
stability ie Ship Owners would be ‘Stable” and that would result in a SAFE
market for both Ship Owners and Cargo Owners without the kind of instability and
bankruptcies which we saw in 2015, 2016 & 2017 across Dry, Liner and
Offshore industry, Hanjin being a 10 on the richer scale, setting scores
of tsunamis across the world with containers
piling in ports with huge claims.
SS (2) Your company
is developing a green
field port in Port Novo near Cuddalore, at fifteen million ton capacity. A string of thermal plants including a mega
power plant at Sirkzhi by Neyveli Lignite Corporation were planned a few years back but most of
these projects have been put on backburner. With industrialization in Tamil
Nadu taking a back seat and increased dependence on renewable energy like wind
and solar energy, what is the future of thermal plants in the region?
Capt KPR:Our Port would be a captive facility when built and we would
build it in phases as per the
requirement of our group’s Power Plant, which is producing 1200 Mw presently
and likely to expand to 3600 Mw in phases. Therefore we do not see any risk there.
The Thermal Power sector has been a neglected child of the past 2
governments. There was a big lull and the country was reeling under Power
shortage for over a decade and then suddenly scores of Thermal Power Plants
were built and many came on the stream simultaneously. In India we need to understand
that it takes anywhere between 10 to 15 years (from the time Land acquisition for
a project starts) till a unit is generated. This is abysmally pathetic, but
that is our record on date. We tend to be in consonance with troughs ie high
demand and no generation on one hand and with the Peaks ie Low Demand and high
production capacity on the other hand. Such kind of synchronization is rare and we seem to have
achieved that distinction. This happens due to the huge lag in planning and
execution of Projects (often 5 to 10 years), resulting in huge cost hike and
culmination in the above explained grotesque phenomenon. Whole of 2016 &
2017 at least 50,000 Mw remained unutilized, increasing the NPA’s in the Power
Now it appears that we have turned a corner, and the demand seem to be
on the rise. Hopefully the unutilized capacity would be taken up.
There is no going back on our Renewable Energy Targets. Though it’s a
big ask to get to 175 Mw of renewable power by 2022, we are in the right
direction. This by no means would challenge Thermal Power for the next 2 to 3
decades. As we speak we are likely to commence work on the much awaited 1320 Mw
supercritical thermal power project (TPP) at Udangudi in Thoothukudi district.
Power Grid Corporation is on the job of synchronisation of all
regional grids which will help in optimal utilization of scarce natural
resources by transfer of Power from Resource centric regions to Load centric
regions. Further, this shall pave way for establishment of vibrant Electricity
market facilitating trading of power across regions.
Tamil Nadu has been pioneer on Coastal shipping of coal
having established the PoompuharShipping Corporation way back in 1973. With
both the ships of the Corporation likely to be discarded due to age factor this
year, What do you think is the future of the Corporation?
Tamil Nadu is truly in the real sense has been in the forefront of
Coastal Shipping for over 3 decades and Poompuhar Shipping Corporation has been
at the center of it. Though it would have been desirable for Poompuhar to
continue to be a Ship Owning Company, Poompuhar has long since been the
chartering arm of TANGEDCO to charter in bulk carriers for the coal transport from
Haldia/Paradeep to Ennore/Tuticorin and the chartered tonnage has been 10 times the owned tonnage
and hence Poompuhar will not miss being a Ship Owning Company.
It would do a lot of good if Poompuhar recruit professionals and bring
in best industry practices in its working and be truly independent of political
Will chartering of private vessels by TANJEDCO to carry coal
from Paradip to Ennore and Tuticorin ports in the absence of their own vessels
prove to be an expensive proposition for the state owned company? Should PoompuharShipping Corporation buy ships
taking advantage of lower prices in the international market and continue with
its forty year old operations?
The Cabotage law is in operation in India. All Chartered in Vessels by
Poompuhar are Indian tonnage and many a times foreign tonnage was chartered in
when Indian tonnage was not available. In the last 10 years with the prevailing
low sea freight, Charterers have had a big advantage. In the last few months, the
freight rates are showing a small northward movement, but that does not affect Poompuhar
much as most of the charters are locked in for a year at least. The performance
of Poomphuhar as a ship owning company,
has not been good and has been a drain. Therefore unless the Corporation is
given full independence, it may not be a good idea to go in for new building
orders now. The second hand market too has bottomed out in 2017 and has turned
around. It may be a better idea to get
other Indian Ship Owners to invest and take their vessels on long term charters
with built in safeguards against uncertainties.
You have signed an MOU with Tamil Nadu Maritime Board for
development of Port Novo captive port. What has been progress of the Project?
We are at the Design and Engineering stage and would soon commence
constructions after getting all the required permissions from relevant
You have also talked in terms of providing Coal logistics in
Cuddalore to the tune of 4.5 million tons a year, Can you elaborate?
The Port to be built at Paragepettai would have a capacity to handle
4.5 MMTPA for the captive requirement of our group’s Power Plant in the same
Between Cuddalore and Nagapatinam, a number of captive ports
have come up in the last twenty years. Now that Bharat Petroleum Corporation
has evinced interest in taking over the Nagarjuna Petroleum”s long pending
refinery and the Indian Oil corporation’s proposal to expand its existing
refinery in the Cauvery basin, What kind of down-stream industries are likely
to come up in the area?
That’s not correct. Between Cuddalore and Nagapatinam, there is only one
big operating Port and that’s Karaikal
Port, which is a common Port. The Chemplast
Port at Cuddalore, at Karaikal and the CPCL facility at Karaikal are for
captive purposes. The Paragepettai Port would be the yet another Port (apart
from the Cuddalore minor Port, which in its present state is handling no cargo)
and that would be a captive facility too. Therefore there is really no overcapacity
If Nagarjuna’s facility does get revived, it may be of interest to see
whether the new management would decide to construct a new Port or use existing
Ports in the vicinity. The Cargo being petroleum, laying pipe lines from
existing ports in the vicinity would bring the capital cost down and make the
project more viable. The same argument goes for IOC refinery expansion in the
Updates on your fertilizer berth at Visakhapatnam, Dighi port in
Coastal shipping in
India has not taken off despite concessions offered by several ports. They include Exclusive berths for
coastal cargo and priority berthing for coastal cargo. You had raised the issue
at a seminar few months ago about the problems encountered with Customs and
Immigration. I am told immigration authorities have different sets of rules for
different ports. Can you elaborate?
Transportation of Goods within India is done through Road, Rail,
Coastal shipping andby Air. In all of this, Ports (major ports)& Airports
are, expensive pieces of infrastructure, built for purpose and domestic cargo
handling is incidental and no additional capital is spent for same while
building Ports and Airports. Ports thrive on import & export cargo and
Airports on Passenger traffic. However that’s not the same with Roads and Railways.
Road infrastructure is built with 80 per cent weightage for freight
movement and Railways infrastructure is built with a 50 per cent weightage for
freight movement. Therefore the capital spent in Road and Rail for freight
movement (read domestic cargo) is very high, yet that cost is not apportioned
to the cost of carriage of freight. The cost of freight is merely based on the
cost of vehicles that carry the freight. The Capital cost is borne by the
state. In today’s world the cost of accidents, the environmental cost when
freight is moved by Road / Rail are in itself a major disincentive, not to
mention the capital cost which is humongous.
Whereas when domestic cargo is carried on the coast, there is a
minimum of 2 Port interfaces and at both these ends the cost levied include a
part of the capital spent in creating the infrastructure. This is an unfair
practice. Also the domestic cargo operators should be allowed to use own
labour/equipment for cargo handling to bring down cost instead of bracketing
the stevedoring cost with import/export cargo handling.
Most of the Major Ports (well interspersed geographically) has
additional infra and capacity available and can create a “Domestic Corridor”
within the Port. It is possible to use technology to secure the cargo to move
only through that domestic corridor, thereby assuring Customs that there would
be no malpractices. Domestic cargo should move smoothly without any
interferences from Customs, with minimum documentation which could be filled
once on line without any additional requirements. Same applies to Immigration.
Domestic flights within India does not have to seek immigration clearance at
each Airport and same should apply for coastal shipping.
The Bay of Bengal Initiative for Multi-Sectoral Technical and
Economic Cooperation (BIMSTEC) is an international organisation
of seven nations of South Asia and South East Asia, housing 1.5 billion people and having a
combined gross domestic product of $ 4 trillion. India should strive to bring the BIMSTEC
member states—Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal under coastal shipping to increase the chances of cargo in both
direction (to & fro) to reduce cost.
Since we have no Coastal Ships in any numbers to talk about, the
Government may offer innovative incentives either to the domestic cargo
interest or the coastal ship operators to invest and move cargo by water. This
will be in the interest of nation building.