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Santanu Sanyal

An ultra large crude carrier unloading at Sandheads... East coast ports are vying with one another for transhipment contract.

A BATTLE royal appears to have started among the east coast ports of Kolkata, Paradip, Kakinada and Visakhapatnam to grab as much of the the transhipment crude traffic. The authorities of all these ports are, therefore, wooing both Indian Oil Corporation and the Shipping Corporation of India. In the process, a rate war appears imminent. This should be cause for cheer to IOC and SCI. Interestingly, that is not so. For them, it is a problem of choice. In such a game of oneupmanship, the choice can be made only after taking into account all the relevant issues in totality.

The Kolkata port handles transhipment crude traffic at the Sandheads, the mouth of the Hooghly river. The operation is undertaken during the dry season, that is, between October and March.

The performance this year (2002-03) was spectacular in the sense that for the first time in any Indian port ultra large crude carriers (ULCCs) with full loads came to the Sandheads and discharged crude into smaller daughter vessels for second round of discharge in such ports as Haldia and Chennai. The Kolkata Port Trust (KPT) is believed to be charging wharfage at Rs 26/27 per tonne.

The success of the Sandheads operation has made the authorities of Visakhapatnam Port Trust (VPT) sit up. Not without reasons. This year the VPT expects to handle about 7.5 million tonnes of crude by way of transhipment against about 9 million tonnes the previous year; the drop in throughput is attributed to the transhipment operation not only at the Sandheads but also at the neighbouring Kakinada port. Between last July and September, Kakinada handled several VLCCs for transhipment purpose and the total throughput is estimated at two million tonnes.

Between December 2000 and February 2001, Visakhapatnam port too handled at anchorage six VLCCs for transhipment purpose totalling 2.5 million tonnes. The port has nit handled any VLCC since. In 2001-02, IOC refrained from bringing VLCCs to the port and the port handled mostly Suezmax tankers totalling nearly nine million tonnes of transhipment crude. The same year, the throughput of transhipment crude at the Sandheads was around 1.5 /1.6 million tonnes. In 2002-03 also, IOC decided not to bring any VLCC to Visakhapatnam; instead, it took those vessels to Kakinada, particularly in July-September. From October, the Kakinada operation stopped; it began at the Sandheads. It was not that Visakhapatnam port did not handle transhipment crude during the period. It did handle, but mostly Suezmax and LRI tankers with the consequent drop in throughput over the previous year.

The VPT is, therefore, mulling lighterage operation by way of ship-to-ship discharge away from the port in high sea such that, as in the Sandheads, ULCCs and VLCCs with full loads can be handled. Accordingly, the VPT has appealed to both SCI and IOC to explore the possibility of undertaking the operation and has, in return, promised to charge attractive rates, so attractive that IOC and SCI, it is claimed, will find it difficult to ignore. The package is still to be finalised but, according to informed sources, the rate will be substantially lower than that being charged either at Kakinada or at the Sandheads.

In any case the Visakhapatnam port does not charge any wharfage on transhipment crude unloaded by VLCCs. It only levies vessel-related charges. In 2000-01 when it handled six VLCCs, the vessel-related charge was 19 cents per GRT, the same as that fixed for the Sandheads operation. Now the VPT would like to reduce it further.

Kakinada being a private port generally fixes rates through negotiations with the customer depending on, among other things, the cargo inducement. According to unconfirmed reports, for transhipment crude the rate was around Rs 75 lakh per operation involving the mother vessel and four daughter vessels. The VPT is examining a lower rate. It is also prepared to extend additional supporting facilities to SCI such as two tugs against one tug at present.

No wonder, both IOC and SCI have agreed to heed the VPT appeal for starting lighterage operation in high sea near the port to handle large volume of transhipment crude. If everything goes on schedule, the trial operation should begin in March so that the regular operations are started from April.

The Kolkata Port Trust too is not sitting idle. It is believed to have successfully sold to both IOC and SCI the idea of starting tandem mooring operation at the Sandheads for handling transhipment crude. The tandem operation, which will replace the present lighterage operation by way of ship-to-ship discharge, can be undertaken even during moderately rough weather.

The success of the tandem mooring operation, it is felt, will help SCI and IOC, and the KPT handle the transhipment crude at the Sandheads even for 10 months in a year against five-six now.

Meanwhile, the Paradip port, which does not handle transhipment crude at all, has also set its eyes on the traffic. This, it is felt, should be possible because the port's newly constructed oil jetty will be ready for operation shortly.

The Customs notification has been obtained and other statutory approvals of the Petroleum Ministry, the Shipping Ministry and the Chief Controller of Explosives are expected soon. The basin in front of the oil jetty is being dredged to achieve a depth such that tankers requiring up to 13-metre draught can call. But the problem is that VLCCs and ULCCs or even Suezmax carriers with full loads require more than 13 metre draught. Therefore, only LRI tankers of 65,000-tonne capacity will be suitable.

As for the rate, the Paradip Port Trust, it is learnt, is planning to charge Rs 15 per tonne as wharfage for the transhipment crude.

However, this has to be approved by the Tariff Authority for Major Ports. IOC, it is further learnt, is believed to be insisting on an even lower rate, as low as Rs 10 per tonne.

The PPT's argument that the IOC's demand might be considered once a single buoy mooring (SBM) has been installed off the port. It may be recalled that there is a proposal to install an SBM off Paradip to handle large crude carriers with full load to meet the requirement of the proposed 12-million tpa capacity refinery of IOC.

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