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The implementation of Sethusamudram project will help the Indian naval ships avoid Hambantota: Captain K.P.Rajagopal

Q) What is your take on Sethusamudram ship canal project where the government has abandoned work for the past ten years after spending over Rs one thousand crores. Are the alternative alignments for the project conceived by the government better or worse than the original alignment? The alignment proposed by the NDA government near the Pamban railway bridge will lead to restrictions on the ship‘s height passing through the canal because of the road bridge.

ANS) The work on the project should be resumed as a strategic project to improve the national security of the country. With Chinese taking control of the Hambantota port at the southern tip of Sri Lanka there is a possibility of their obstructing the naval assets of our country moving from west coast to east coast. The implementation of Sethusamudram project will help the Indian naval ships avoid Hambantota.  A possible blocade of Indian naval ships could be averted if the canal is in place. Moreover the ships can save around three days time by using the Sethusamudram canal rather than circumnavigating Sri Lanka.

Q) Chennai used to be the only port for all the four southern states of the country hardly twenty years ago. Now there are three ports around Chennai vying with each other for the same cargo and the same hinterland. Bulk of the container traffic from Chennai port has shifted to Katupalli. How do you see the competition helping the trade?

ANS) Chennai port has very little land under its possession and hence possibilities of expansion are limited. The same is the case with the Mumbai port as well. Connectivity to the port is crucial and therefore the port should speed up the implementation of elevated corridor project. The region has lot of potential.

Hardly forty per cent of the Indian cargo is containerized. Even then our ports handle nearly fifteen million teus per year. There is scope to increase our container capacity to thirty million teus. I foresee a huge revolution in cargo handling by our ports to take place in the next five to ten years.

Did you ever imagine the customs known for highhanded enforcement regime only a few years ago transform themselves as a facilitator of the trade? Ports have to concentrate on speedy evacuation of cargo using latest technological tools.

Chennai port will emerge as a clean cargo port handling cars other automobiles exports, containers edible oil and food grains while the nearby Kamarajar port will handle other cargo like iron ore coal fertilizers.

SS: What kind of infrastructure and connectivity projects you would suggest for improving the productivity of east coast ports?

Ans: The port administration should take all steps using modern technological tools to reduce the interface with the port labor to help reduce corruption. It should also take steps to reduce handling costs. These are the low hanging fruits which could be immediately plucked. In the long run you can think in terms of having a network of ports in the region.



For the benefit of our readers, we give below the Summary of the interview of Capt K P Rajagopal

It is time that the Centre takes steps to build a dedicated railway corridor from Chennai to Delhi and Chennai to Mumbai to provide better rail connectivity to the east coast ports which are working around fifty per cent of the capacity for the last few years.

There is a large volume of inter-Asia cargo from China and South East Asian countries which can be offloaded at Chennai, Krishnapatnam and Visakhapatnam ports and moved by rail to Central Indian manufacturing clusters and the National Capital Region

A large volume of this cargo is moving via JNPT Mundra port which is not cost effective and time consuming. The cargo from this area, if moved through the East Coast Ports would reach the National Capital Region at least one week earlier besides tremendous saving in freight costs.

The government which is constructing four new ports taking into consideration future demands of the EXIM Trade should also invest in better Rail connectivity to East Coast Ports.

Commenting on the imbalance in the turn over between ports in the west coast and those in the East Coast which are under-utilized he said next five years will be trying times for the Liner trade who wish to operate from the east coast. It will take time to build the railway infrastructure.

The East coast ports have distinct advantage in handling cargo from Asian countries. We are unable to take advantage of what the geography has provides us he said referring to large volume of cargo from Asia being handled at JNPT or Mundra ports.

The pattern of trade will also change Post Goods and Service tax where the industry will have to resort to stock and sell. Tremendous movement of cargo will be generated between various parts of the country as industries which do not have stocks will go out of business. This means railways will be flush with business and not insist on return cargo as they do now.

Till railway infra and connectivity is built, the East Coast Ports near term will have to depend on roads for linkage to the hinterland.

The recent move by ports like Krishnapatnam and proposal by Chennai port to enter transhipment is a step in the right direction. The ports need to work on it since there is potential to expand the business beyond the east coast ports to include cargo from Bangladesh and Myanmar. Both the countries look to Colombo and Singapore Ports for their transhipment requirement. East coast ports are close to Bangladesh and Myanmar compared to Colombo or Singapore.

On the future of transhipment terminals, Cap. Rajagopal said Vallarpadam container terminal at Cochin port has come to stay notwithstanding widespread criticism about the utility of the port. Near term there may not be substantial growth in traffic from the terminal

While the Vizhinjam terminal in Kerala where 75 per cent of the work is completed will take off soon, the terminal planned at Colachel at the southern tip of the country will take at least five years for the work to commence considering the intensity of the fishermen agitation.

A complicated situation has arisen in the Sethusamudram ship canal project and inordinate delays have added to the cost. Ten years after stoppage of work, the alternative alignment is yet to be identified while the government had spent a sum of rs one thousand crores on the project so far.

The project needs to be looked at from the National Security Angle following the Chinese take-over of Hambantota port situated in the southern tip of Sri Lanka. Given the uneasy relations with China, possibilities are open when their navy could block Indian naval ships moving from West to East Coast. If our ships pass through Sethusamudram route along the east coast, they can avoid Hambantota port.

The thermal power sector has been neglected by successive governments for the past ten years. In India, it takes anywhere between 10 to 15 years till a thermal plant is commissioned after overcoming land acquisition and environmental issues. This is abysmally pathetic but that is our record on date. Nearly fifty thousand MW power remain unutilized due to low demand from states during the last two years increasing the Non performing assets in the power sector. Now it appears that we have turned a corner, and the demand seems to be on the rise. Hopefully the unutilized capacity will be consumed.

The state owned Power Grid Corporation is on the job of synchronization of all regional grids which will help to optimal utilization of scarce natural resources by transfer of power from Resource centric regions to Load Centric regions. This will pave the way for establishment of vibrant electricity market facilitating trading of power across regions.

Paying tributes to the Poompuhar Shipping Corporation’s pioneering role in coastal shipping in the country, he said the Tamil Nadu state owned Corporation has been in the forefront of this mode of transport for over four decades. It would so lot of good if the Corporation which carries thermal coal from bengal to thermal plants in TN recruit professionals and bring in the best industry practices in its working and be truly independent of political interference.

Unless the Corporation is given full independence, it may not be a good idea for it to go in for new ships. The second hand ship market has also bottomed out last year and has turned around. It may be good idea to get other Indian ship owners to invest in the Corporation and take their vessels on long term charters with built in safeguards against losses.

Listing out reasons for the failure of coastal shipping to take off in India he said though capital spent in road and rail for freight movement of domestic cargo is very high, yet that cost is not apportioned to the cost of carriage of freight. The capital cost is borne by the state.

Whereas when domestic cargo is carried on the coast, there is a minimum of two Port interfaces and at both these ends the cost is levied to include a part of the capital spent in creating the infrastructure.. The domestic cargo operators should be permitted to use their own labor instead of bracketing with Stevedoring cost of EXIM cargo so that handling cost can be brought down.

The major ports should create a domestic corridor within the port thereby assuring the Customs that there would be no malpractice. Domestic cargo should move smoothly without any interference from the Customs, with minimum documentation which could be filled on line. Same applies to immigration, Domestic flight passengers within the country need not have to seek immigration clearance at each airport and the same should apply for coastal shipping.

India should strive to bring BIMSTEC member states Bangladesh, Myanmar Sri Lanka, Thailand, Bhutan and Nepal under Coastal Shipping to increase the volume of cargo in both directions to reduce costs.

Since India has no Coastal ships in any numbers to talk about, the government may offer innovative incentives either to the domestic cargo interests or Coastal Ship Operators to invest and move cargo by water.

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