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i-maritime Newsletter

Teething troubles gnaw away at transhipment hub - 2012-02-13

A year ago on February 11, the Prime Minister, Dr Manmohan Singh, had dedicated Vallarpadam container terminal in Kochi to the nation. The terminal, built jointly by Kochi Port and DP World, Dubai, is the first major transhipment hub in the country. It was expected to handle at least a part of the Indian cargo that is being transhipped through Colombo and other neighbouring ports, so that it could help bring down transport costs for the country's international trade.
Today as it celebrates its first anniversary, Vallarpadam handles virtually no transhipment cargo. In fact, it stopped handling outstation containers about six months ago following a dispute between the Customs at the port and the Special Economic Zone in which the container terminal is located. Customs wants the rights to inspect the transhipment containers which the SEZ was opposing on the ground that containers are customs-sealed at the origination port. The issue may be resolved soon, as the Prime Minister's Office directed the authorities to sort it out in a month's time. But this already took its toll on the transhipment hub. Outstation cargo stopped coming to Kochi. “It was a just a territorial dispute between two Government departments, but media reports took it to a different level. It has hurt the reputation of the terminal. Whatever cargo came for transhipment was stopped. Now we'll have to work to bring back the trade's confidence,” said Mr Anil Singh, head of DP World, India-subcontinent. The transhipment volume even in the first six months was negligible. There were teething troubles. The terminal was opened before it was ready to start operations. Dredging was not complete. Disputes and court cases further delayed the work. “Even after a year, we do not have the promised draught of 14.4 m. We have 13 m in one berth,” said Mr Singh, in a conversation with Business Line on the eve of Vallarpadam terminal's first anniversary. Besides adequate draught (water depth) to enable mother ships to call, a transhipment hub also requires the back-up of feeder services to provide connectivity to other local ports. For this, Vallarpadam has been seeking relaxation from Cabotage regulations so that foreign flag vessels can provide feeder services. This has been opposed by Indian shipping companies on the ground that coastal shipping service is reserved for national flag-carriers.
However, the Government has been considering a proposal to provide Cabotage relaxation for moving containers. The Shipping Secretary, Mr K. Mohandas, who would be retiring by end of this month, is understood to have told the maritime Advisory Committee in Mumbai last week that a decision on Cabotage is expected before he demits office. If that happens, it would be big positive for Vallarpadam. According to Mr Singh, Kochi port authorities took many pragmatic decisions to ease Vallarpadam's troubles. But more and more issues kept coming up. The trouble is that each interested party is focussing on their own issues and not working towards achieving the common goal of development of trade. “It is not that DP World is the only one getting hurt, Kochi is getting hurt, the State of Kerala is getting hurt and the country's trade is getting hurt,” he said. But Mr Singh is fully confident of turning around Vallarpadam. “We need the support of State and Central Governments, port trust and trade.” It is pity that a port facility created at a cost of nearly Rs 2,000 crore to help the country's foreign trade has been buffeted by one problem after another since inception.

Source: Hindu Business Line