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Will Kamarajar Port Become Transshipment Hub for East Coast?

Chennai:

Port Wings News Network:

Kamarajar Port Limited (KPL), located at Ennore, next to Chennai, is one of the 12 major ports in the country under the administrative control of the Ministry of Ports, Shipping and Waterways (erstwhile Ministry of Shipping), Government of India.

Kamarajar Port, the only major port with “Corporate model” has been able to compete with the private players ever since its inception and has grown exponentially since it was established. A few months ago, 50 percent stake that was held by the Union Government was transferred to the Chennai Port Trust for better management of the port. With the transfer of shares, the Port of Chennai is currently the full owner of Kamarajar Port.

Following this, Chennai and Kamaraj Ports have announced various new development projects to cope with the stiff trade competition of private ports located in the region. As part of this, efforts are being made to gradually transform Kamarajar Port into an international ‘transshipment’ port.

PLAN TO STRENGTHEN INDIAN PORTS

Containers coming to India from different parts of the world are mostly loaded on large ships and unloaded at ports including Singapore, Colombo and Port Klang (Malaysia) and then brought to Indian ports by a fleet of small ships. The same procedure is followed in containers exported from India to foreign countries. This process, not only increases the handling costs, also results in delays. China continues to invest heavily in Sri Lankan ports. With India paying close attention to this, the Shipping Ministry is making efforts to strengthen the infrastructure of the Indian ports. Accordingly, the Ministry is making serious efforts to remove the various impediments that hinder the import of cargo directly from foreign ports.

SPECIAL OFFERS ON TARIFFS

Adani Group has set up a state-of-the-art container terminal at Kamarajar Port at an investment of Rs 1,800 crore. The terminal, which has the capacity to handle about 8-lakh TEUs per annum, has been operational for the last two years. However, less than one lakh TEUs are being handled here annually now. Various associations have complained that the high vessel related charges (VRC) at Kamarajar Port compared to other private ports dissuade cargo vessels to dock here.

Meanwhile, Kamarajar Port management issued two trade notices announcing a drastic reduction on Vessel Related Charges for Coastal Vessels carrying EXIM and Coastal Transshipment Containers.

Accordingly, upfront concession of 70% in VRC for Coastal vessels carrying 100 TEU’s or more of EXIM Laden Transshipment Containers per voyage; Upfront Concession of 50% in VRC for Coastal vessels carrying either 100 TEU’s of Coastal Laden Transshipment Containers or 100 TEU’s of combined EXIM and Coastal Laden Transshipment Containers.

Besides, the port management decided to continue concession for foreign vessels carrying 100 TEU’s or more of EXIM Transshipment containers on each of its voyage – 5% additional concession upfront on Vessel Related Charges of KPL’s Scale of Rates (SoR) along with the existing VRC concession. The volume of such EXIM Transshipment containers would be included while calculating the Threshold TEU’s of such services.

ARRIVAL OF MORE CONTAINER VESSELS ON THE CARDS?

Speaking to Port Wings, Chennai Ennore Shipping Agents Association President CR Raghu said, “We welcome the tariff concessions announced by the port management. This will reduce the cost of handling cargo. Inland waterway transport will increase due to reduced costs. At present, it is more expensive compared to road transport as port charges are higher for transporting domestic cargo by water. Reducing such fees will reduce costs and increase acceptance among traders. This is the first attempt to bring ships from ports including Colombo and Singapore directly to Kamarajar Port under the name ‘Transshipment’. This will lead to sustained development of Indian ports.”

“At the same time, these tariff concessions alone are not enough. Charges should be reduced further. The port management should guarantee on the time period for delivery of the goods. At present, there are no separate terminals for domestic and foreign goods, but even domestic goods can be taken out only after the approval of the Customs officials. New guidelines should be announced to facilitate hassle-free freight traffic by eliminating such unnecessary problems. Through such a series of activities, the arrival of domestic and foreign vessels can be greatly increased. Then all industries will grow in the region,” added Raghu.

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