Sagar Sandesh: There appears to be a conscious attempt on the part of the government to reduce dependence on Colombo and Singapore ports for the transshipment of cargo to East coast ports. The government has recently relaxed Cabotage laws restrictions on Foreign Going Vessels from carrying Coastal cargo and empty containers. The Ports of Krishnapatnam, Chennai and VOC Port Tuticorin are gearing up for transshipment business. How do you see the impact of these moves in attracting traffic to the region?
Mr Jayaraman Krishnan: It was the Chennai Port that pioneered the concept of transshipment when Maruti-Udyog used the Port to bring spare parts from Japan for their plant in Gurugram. Containers carrying spare parts from Japanese ports used to land at Chennai port and moved by Rail to Gurugram. The Port lost the traffic to JNPT subsequently since Chennai Tughlakabad had no dedicated freight corridor.
Krishnapatnam and Kattupalli ports will hugely benefit from the governmentís move s to relax cabotage laws. Chennai port will be laggard since the port has no customer friendly approach. The port may be efficient but has no customer interface.
On the other hand, Krishnapatnam port authorities delegate a port official to handle the customers and he will be responsible till the consignment is loaded or unloaded. All the customers problems in between will be sorted out by the designated port official Being a private port they have an aggressive marketing approach.
Kattupalli Port- Photo Kattupalli Photo courtesy Adani Ports & Special Economic Zone Ltd
The Krishnapatnam Port has recently opened a liaison Office at the National capital Delhi in an effort to rope in new customers for transshipment business. Besides both Krisnapatnam and Katupalli ports are not bound by the TAMP regulations. Public sector ports like Chennai, bound by these regulations, which hinders them from taking quick economic decision like giving rebates or discounts. Krishanapatnam port being close to Chennai, a distance of 120 nautical miles will also come in the way of Chennai port catching up with transshipment.
The other state owned VOC port, Tuticorin will however have advantage of geographical location of being close to Colombo Port.
We understand that Cabotage law relaxation rules are helping the Indian ports to handle
more transshipment cargo. However they are at deeply discounted rates because of the intensity of competition. Anticipating competition from Indian ports, the entrenched
port like Colombo Port has dropped handling rates by
over forty per cent in an
attempt to retain the existing customers.
We do feel that there will be growth in transshipment in Indian Ports. Krishnapatnam has handled largest number transshipment cargo since the government came out with relaxation.
SS: Shipping Minister Pon Radhakrishan had recently announced that the Detailed Project Report for the Colachel transshipment terminal has been completed. The project had received in principle approval by the Union Cabinet nearly four years ago. What are the lessons the Colachel terminal has to learn from the failure of Vallarpadem experiment?
Mr JK: India has lost the first mover advantage to develop a southern Port as a transshipment port. Singapore and Colombo ports have two decades of experience in handling a transshipment terminal. It is going to be an uphill task to divert the existing clients of Singapore and Colombo to the newly developed Port. Hence commercial viability will be the first issue.
The cost of Operation of a Greenfield port is certainly much more than a developed port like Colombo. Since Colombo portís assets have been ammortized, the port can offer deep discounts which the newly developed terminals will find it difficult to cope with.
Railway connectivity to the proposed port at Colachel is yet to emerge. There is a single railway track for both passenger and freight linking the proposed terminal to the nearest commercial town of Madurai. Lack of adequate rail connectivity to Colachel is very unsettling to the users who decide to use the port. These are factors which are huge challenges to the new port.
SS: Donít you think that the Sethu Ship canal project could provide coastal shipping connectivity from the proposed Colachel terminal to other East Coast ports. With the presence of Chinese companies in the neighboring Hambantota Port at the southern tip of neighboring Sri Lanka, donít you think the Canal project should be looked at from the National Security angle?
The Ram Setu bridge (pictured here is a widely used satellite image)
Mr JK: The Sethu Ship canal Project will provide a deterrent and provide better security to the east coast of the country against foreign incursions and possible economic blockades. India faced oil blockade during the Bangladesh war in1970s when our vessels were prevented from landing in our ports. The government retaliated by nationalizing ESSO Caltex and Shell. The multi-national oil marketing companies collaborated with United States which then sided with Pakistan and ensured crude and petroleum products did not reach our shores. We have not learnt lessons from history. There needs to be a trade-off between the National Security versus Economic Costs as far as the Sethu Canal project goes.
Some kind of hand holding by the government is needed to make the project a success in the interest of National Security.
(To be continued...)