Mr. P.JJT: PSA SICAL Container terminal in the port was commissioned in
1999. The port was handling containers prior to the setting up of the terminal
by a shore to ship arrangement. When the Singapore based PSA terminal set up
shop at the port, gantry cranes were pressed into service.
Starting with a volume of 1.5 lakhs teus per year, container turn over
at PSA Sical Terminal shot up by four times in the first ten years of its
Under the Royalty model being tried out for the first time in the
Indian ports, the rates were telescopic. The terminal handling charges
permitted to the terminal was very low and said to be lowest in the country.
During the third year of the Operation, the terminal raised the issue of
revision of terminal handling charges with the port Administration, The issue
was referred to Tariff authority. The revision was not conceded.
In fact the Tariff Authority
brought down the terminal handling rates by fifty per cent around 2003 saying
the rates charged was on the high side. The terminal thereafter lost interest
in enhancing the output.
A stage reached when the terminal did more volumes they lost more
The terminal went to Madras High court seeking remedy in 2011. The
terminal contended in the Court that while their terminal handling rates were
frozen by the tariff authority, the royalty rates went up. The court ordered
the freezing of the royalty rates charged by the Port administration.
Since there was no solution to the issues raised by the terminal and
legal battle ensued, Container handling at the terminal reached a saturation
point. The draft at the terminal remained around eleven meters. A modern
container vessel which entered the market in 2005 cannot enter the terminal
because of draft restrictions.
Meanwhile the move to start a Second container terminal at the Port
was put on hold in 2008 due to World- wide recession. The tender floated for
the purpose was cancelled. In hindsight it was a wrong decision when the
container trade in the port was gathering momentum.
Meanwhile the trade in the port started growing around 2010. The Port
was dependent on the PSA- SICAL Terminal which was not keen on increasing the
output. There was cargo but no capacity in the port to handle during 2010-11.
The three gantry cranes at the PSA terminal used to make ninety moves
an hour. It gradually came down to fifty moves an hour. Container trailers
which used to get cleared within three hours inside the port started taking 12
hours for clearance. Because of the policy issues, a Man-Made Congestion was
created at the container terminals of the Port by the Operators.
The vessel operators were advised by the terminal to plan their cargo
accordingly taking into consideration reduction in output.
The Second terminal Dakshi Bharat Gateway terminal was commissioned in
2016 with a capacity to handle seven lakh TEUs a year. The terminal handled 2.5
lakhs teus last year and is expected to touch four lakh TEUs during the current
financial year. The terminal has a draft of 12.5 meters. At present, the draft
has been increased to 13.1 meters.
SS: When Tuticorin port faced capacity constraints, how did Cochin
Port take advantage of the situation and diverted cargo to the Kerala port?
Mr. P.JJT: During 2010-11 when the EXIM trade was facing difficulty in
Tuticorin port, Cochin port snatched the opportunity by starting a vigorous
marketing drive in a bid to divert the cargo from the Tamil Nadu to Kerala
As FOB costs were rising due to reduced productivity in the container
terminal in Tuticorin port, the trade became dissatisfied. At this point Cochin
port came out with an aggressive marketing strategy to wean away the trade from
Vallarpadem container terminal
Cochin portí Vallarpadem container terminal offered incentives
directly to Tamil Nadu Shippers to wean away the trade from Coimbatore,
Pollachi, Tirupur and Erode from making shipments through Tuticorin Port. The
port offered a discount of Rs three thousand for 20 foot containers and Rs five
thousand for forty foot containers by way of rebate in Terminal Handling
When the concessions were implemented by the Cochin Port, captive
cargo of Tuticorin port from Western Tamil Nadu started drifting to the Kerala
port. The cargo lost to Cochin include Coir piths from Pollachi, garments from
Tirupur, bed sheets from Karur and products of Tamil Nadu Papers and Newsprint
Corporation near Karur.
Kerala government also swung into action with pro active measures for
the trade by tackling the delays in the Walayar check post. The waiting period
for the Tamil
Because of the Cochin portís strategy supported by the Kerala
government the Tuticorin port lost around 2500 TEUs per month. This was a body
blow to the Tuticorin port.
The Container Corporation also tried its best improve the fortunes of
Cochin port by starting direct services from Cochin port to Coimbatore and
Bengaluru. These services were operated for 2 to 3 years. But the service was
not a success and failed to make an impact on Cochin Portís container turn