Tel: +91 22 2757 9611, 2757 7834

i-maritime News Service

Iron ore handling facilities underused - 2012-06-25

Stung by sharp drop in iron ore exports and uncertainty over its future prospects, the ports concerned, mostly on the east coast, are mulling how to put the existing ore handling facilities, created at a massive investment but now grossly underused, to proper use. The concern of the new private ports that have invested heavily in creating the state-of-the-art facilities is more than old government ports, where the facilities were created long ago with much smaller investments.

Some ports have appointed consultants to examine the alternative options, which are not many. One option is to convert the iron ore berth, an export berth, into an import berth, particularly for handling coal import which is rising. In fact several coal importing companies in the private sector, some of them even having coal blocks under their control in eastern states, are scouting for port facilities on the east coast. But not everyone seems convinced that conversion is the best solution on the ground that it would not only entail an additional investment but would also render earlier investment redundant. The other option is to retain the export-handling character of the iron ore berths by using them for exporting, say, iron ore pellets.

This calls for value-addition of the ore within the port area or at a location not far from port. It is hoped that someday the present situation on the iron ore front will change for better, export will resume and the berths regain their old glory.

The Shipping Ministry is trying to obtain this fiscal itself necessary approvals for two port projects, one of them being in West Bengal, according to the Union Shipping Minister, Mr G.K. Vasan. The Minister, while addressing a meeting in Chennai recently, however, did not specify the projects. Enquiries reveal that the project being considered for West Bengal could be the deep draft port at Sagar Island. The proposal for constructing a port at Sagar Island is not new; it has been in discussion for several years now, though with little progress so far. Only recently did Rites come out with a project report. The Government had earlier invited global bids for the preparation of the detailed project report but not with much success. There was hardly any response.

Rites therefore was asked to do the job. The project presupposes huge dredging and reclamation of land, about 1,500 acres, for creating the proposed cargo handling facilities. Next, the connectivity with the mainland, both by road and rail, will be critical. All this will entail huge expenditure, estimated at Rs 10,000 crore or so in the first phase itself. The cargo inducement is not clear as the main hinterland is on the other side of the Hooghly river. But then West Bengal also needs a port closer to the sea in view of the deteriorating navigability of the river.

Source : Hindu Business Line