Hambantota emerging competitor for Indian ports - Shipping Secretary

Thiruvananthapuram – The upcoming southern Sri Lankan port of Hambantota may prove a new rallying point for container transhipment industry in the subcontinent and put up fresh competition to Indian ports.

The first phase of the Chinese-aided port went on stream just the other day; a full-fledged container terminal is envisaged in the second phase.

The port city of Colombo is already an international container transhipment terminal.

The Union Shipping Secretary, K. Mohandas, said here on Friday that existing Indian ports as well as those on the drawing board would now need to come up with qualitatively and economically differentiated proposals to stay in business. Delivering the keynote address at the Kerala Ports and Maritime Business Conclave organised here jointly by the State Government and State Council of the Confederation of Indian Industry (CII), he conceded, however, that there is space for each player to exist if projected growth in sea-based trade is any indication.

This should not be an excuse to let off our guard though, Mohandas said.

What would differentiate the men from the boys would be a competitive tariff and ease of and efficiency in transacting business.

Investors are wary of risk while taking a decision on committing big money to develop a Greenfield project of the size and scale of the proposed Vizhinjam international deep-water container transhipment terminal near here.

“We must ensure that all parameters such as land acquisition are tied up well in advance and all such perceivable risks are eliminated before entering into a contract with the private developer.”

The landlord model that the special purpose vehicle Vizhinjam International Seaport Ltd (VISL) has opted for should take care of most of these concerns as the State Government is investing significantly in the initial infrastructure.

By the same token, it would also allow the port authority some elbowroom to fix tariff competitively and attract incremental container transhipment business being generated in the east-west shipping route.

Putting this in perspective, Mohandas said that Indian ports handled 850 million tonnes of cargo during 2009-10, with two-thirds gong to the 12 major ports and the rest to the non-major ports.

On the downside, though, this was achieved at 91 per cent capacity utilisation, which means that the port infrastructure may already be creaking under the heavy load.

This also translates into enforced waiting period at the anchorages, bringing traffic to a slow grind with implications for the industry and economy.

The capacity utilisation would need to be adjusted to around 70-75 per cent in line with the global pattern.

To achieve this, additional capacities would need to be created for which massive funds need to be sunk.

It is estimated that Indian ports would need to handle 2,500 million tonnes by 2020, which would entail at least a 25 per cent ramp-up in capacity.

Most of the cargo handled would be those needed to fire the growth of energy and hydrocarbon sector.

Liquid petroleum and thermal coal traffic would continue to grow while that of iron ore may slow down, Mohandas said.

(The Hindu Business Line)

Parliamentary panel moots single regulator for Indian ports

New Delhi: All ports in the country should be under a single regulator with quasi-judicial mandate for settling disputes, a Parliamentary Panel has recommended.

The Committee of Estimates, which presented a report on the Ministry of Shipping to the Lok Sabha, has also said that there should be a level playing field for all ports.

The major ports, under the purview of the Central Government, are regulated by the Tariff Authority of Major Ports (TAMP). But other ports under the State governments are not within the purview of any such regulator.

The committee has, however, not specified the activities that should be monitored under the regulatory regime. In 2009-10, the total cargo traffic handled by both major and non-major Ports was 827 million tonnes, of which 561 million tonnes, or 68 per cent, were accounted for by major ports and the remaining 266 million tonnes were handled by non-major ports.

The recommendation is important since the Government has been deliberating on this issue for some time now. “The Ministry should push for a single regulatory regime and advise the State governments that they can always have the controlling stake in the functioning of non-major ports, but they would be subjected to an impartial regulatory institution for developing a level playing field, as eventually the market condition and service would determine tariffs,” said the committee.

Different stakeholders have had different points of view on the issue. The State Governments are against the idea of having a regulator for non-major ports. “The Planning Commission is understood to have recommended that major port trusts be allowed to decide their own tariffs once they reach optimum capacity, so that these are able to thwart price-related competition from non-major ports. The committee also notes that States controlling non-major ports are against a single regulatory authority,” the report stated.

Vallarupadam Inter Container Terminal by next month

Thiruvananthapuram  (PTI) – One of the much awaited development project in Kerala, Vallarupadam International Container Terminal at Kochi, would be functional by next month, a top Union government official said.

Commissioning of Vallarupadam Container terminal would increase transhipment of containers in Indian ports, which were now being held mostly in ports of other countries, Union Shipping Secretary K Mohandas said while addressing the ‘’Kerala Ports and Maritime Business Conclave’’ here.

The minister said that the Centre was planning to bring out a Coastal Shipping Policy in a couple of months, with an objective to provide impetus to coastal traffic and movement of cargo through inland waterways.

 “The policy among other things will identify certain legal changes required and additional infrastructure to be put in the Coastal shipping and inland water ways sector”, Mohandas said.

Referring to significance of ports development in the country, he said a recent study had projected that ports in the country would have to handle a cargo load of 2,500 million tonnes by 2020.

Majors and minor ports put together now handle nearly 850 million tonnes of cargo, he pointed out.

“So, there is a gap between the availability and requirement of facilities in the country in ports’’, he said, adding that the ports in the country functioned with a 91 per cent capacity utilisation. This means ships will have to wait for long in sea or in ports leading to delay in transaction of business, he said.

The capacity utilisation had to be brought down to 70 to 75 per cent, which was the global standard, he said. On the Vizhinjam International Deep-sea Container Terminal, promoted by state government with private players, Mohandas said the project would have the full support of the Centre.

The port once completed would attract more container traffic from the ports of other countries.