Nissan is considering the upcoming private Kattupalli port as an alternative to the neighbouring Ennore port for export of its cars.

The possible shift is due to delays in creation of necessary infrastructure and high vessel-related charges at Ennore, which is country's first corporatised port.

For the last couple of months talks have been going on between officials of Nissan and Kattupalli port. Last week, Nissan's Corporate Vice-President, Mr John Martin, met senior officials of Larsen & Toubro, which is building the Kattupalli port north of Ennore, according to sources.

Level playing field

The Japanese car-maker is seeking from Ennore Port Ltd a level playing field with other ports. The high charges at Ennore port is making it very expensive to export cars, said a Nissan official on condition of anonymity.

The scale of charges set rate for a vessel of 5,000 units capacity at Ennore was $122,000 per vessel as against $68,000 in Chennai port – while Ennore had to build infrastructure from scratch, it was already in place at Chennai. At $13.60 per car, Ennore is the most expensive in India and globally, claimed an official of Nissan.

Efficiency

“Export efficiency is critical to our Indian operations and we are having some issues with Ennore port in this respect where there is a lot of work to be done on costs and general infrastructure. We are in close communication with the port authority on these issues,” said a Nissan spokesperson.

For instance, the dredging work in the car terminal was completed only last week. This was after a delay of nearly a year. The main approach channel was too shallow for a car carrier of 5,000-vessel capacity to enter the port, he said.

Mr Kiminobu Tokuyama, CEO and Managing Director of Nissan Motor (India), at a function in Chennai on Wednesday, said that the infrastructure relates to deepening of the breakwater, which port authorities have done to a certain extent.

However, “we are in discussion relating to port costs”, he said.

Since the start of exports in October 2010, Nissan has so far exported 1.3 lakh units of Micra through the Ennore port, and about 2,000 units through the Chennai port.

As the infrastructure was not ready on time, Nissan was forced to use the chemical terminal (at the request of Ennore Port Ltd) but was charged at $30,000 per vessel, he said.

Nissan selected Oragadam based on access to Chennai port's deep water. However, Chennai port was declared full and Ennore was offered as an alternative. Nissan accepted Ennore assuming its costs would be the same as Chennai. However, there is a huge disparity in the scale of rates between the two ports, a company source said.

In 2008, Nissan signed an agreement with Ennore Port Ltd to export vehicles through the port. The port's administration has invested Rs 120 crore to set up a multi-purpose berth. The terminal will have a 250-metre length and a depth of 12 metres. A stack yard will be created to park 1.40 lakh cars.

> raja@thehindu.co.in

Related Topics