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i-maritime Newsletter

Mainline vessel operators see ICTT as transhipment hub - 2011-11-07

Enquiries have started pouring in from leading mainline shipping operators in the sub-continent to use the Vallarpadam terminal as their transhipment hub to cater to the large transhipment requirement from various domestic ports on the east and west coast. The decision of the Kochi Port authorities to continue with the marine concessions to mainliners equivalent to Colombo Port for one more year and the modern facility at the ICTT with good hinterland connectivity by road and rail has inspired the vessel operators take a favourable decision in this regard. The leading mainline operators that had evinced interest to utilise the ICTT facility included Mediterranean Shipping Group, Mitsui OSK Lines, Maersk, NEMO service etc.
However, the existing restrictions for foreign vessels to connect Indian ports with transhipment cargo are seen as a hindrance by vessel operators to use the potential in Kochi Port. Highly placed sources in the port told Business Line these vessel operators could not take a sudden decision to shift its base from Colombo to Kochi on account of the Cabotage restrictions in Indian ports. If the law is relaxed, they may slowly skip
Colombo and will opt Kochi for transhipment purpose, the sources said adding, at present 70 per cent of the Indian cargo is transhipped through Colombo port. By relaxing the Cabotage Law, the sources pointed out that the throughput and number of vessel calling at ICTT will go up. Besides, the Kochi Port will get all the additional revenue in respect of marine charges paid by the ships and one third of the handling costs from DP World as royalty. At a time when the Kochi Port is struggling financially, the relaxation of Cabotage Law in respect of Exim cargo will be of great benefit to them. It is pointed out that the Kochi port is in a serious financial crisis and the net loss is likely to touch Rs262crore by March 2012 compared to the loss of Rs86crore reported last year. The loss this year is mainly due to the increase in the cost of capital dredging to achieve a depth of 14.5 metres. The port had to spend an additional Rs166crore for capital dredging when the depth was enhanced to 14.5 metres from 12.5 metre. The request of the port for a grant of Rs400crore from the Government to meet the dredging expenses for a period of three years in line with the grant provided to Kolkatta Port was turned down by the Government. With congestion and other issues at various south Indian ports, enquiries for transshipment through Kochi are on the rise. The sources pointed out that some of the leading companies dealing in garments, electronic goods, granites, gherkins etc in neighboring ports have already started using ICTT for exports. The terminal had recently handled a record of 20 ICD trains in October from Mangalore to cater to the trade in the hinterland. The ICTT had handled approximately 33,000 teus per month as on today, an increase of 32 per cent over last year when the DP World operated the RGCT in Willingdon Island. Though the Government had promised to relax the Cabotage Law at the earliest, nothing had materialised so far. The trade is not seeking any relaxation in Cabotage Law to cater to the domestic cargo but for pure Exim cargo, which is currently handled at Colombo, the sources added.

Source: Hindu Business Line