It may be a little late in the day, but the Kerala Government is going the whole hog to revamp its maritime sector. The State has listed a number of projects for private investments, worked out an incentive scheme to boost costal shipping and finally decided to constitute a Maritime Board to oversee the developments in the sector. According to Jacob Thomas, Director, Ports, a key objective of these initiatives is to divert cargo from the congested roads to waterways and coastal shipping. In conversation with Business Line recently, Thomas explained the rationale behind these initiatives.
You are planning several new ports. Where do you think the cargo will come from?
The cargo for Kerala ports need not be generated within the state. Kochi port has been receiving cargo, even though the manufacturing base in Kerala is not producing enough volume. Transhipment is not based on local cargo. Cargo can come from other countries and also from other States. For example, we are developing a large port at Ponnani and cargo to this port is expected to come mainly from Tirupur-Coimbatore belt.
What about coastal cargo?
We have identified four types of cargo for coastal shipping — construction materials, foodgrains, LPG and vehicles. These are now coming to Kerala from other states by road or rail. We want to bring them by ships.
Movement of cargo to Lakshwadeep also has great potential. Currently, two lakh tonnes of general cargo is shipped annually from Beypore port. The volume is expected to go up with the changing lifestyle of people in the Islands.
We are developing seven ports — Vizhinjam, Kollam, Alappuzha, Kodungalloor, Ponnani, Beypore and Azhikal. Our target is to divert at least 20 per cent of the cargo currently moved by road to coastal shipping by 2015 and 40 per cent by 2020.
Are there specific projects?
Two dedicated terminals for handling cement will be set up at Kollam and Azhikal on public-private-partnership basis. Azhikal will have one million tonnes capacity and Kollam five lakh tonnes. Two cement companies have already approached us and the tender will be awarded shortly. It is estimated that prices of cement will come down by Rs 50 a bag if transported by coastal ships.
Besides cement, granite, tiles and other construction materials coming from Gujarat and other parts of the country to the State can also be moved by sea.
Kollam is also being developed as a cashew hub. The plan is to move export consignments by coastal vessels to Kochi port. These are currently carried by trucks.
We plan to bring foodgrains, sugar, pulses and other commodities by ships.
Currently, they are moved by road or rail from Rajasthan and Punjab. It would be much cheaper to move them by sea from Gujarat. Our plan is to divert at least 50 per cent of these commodities to coastal shipping. Kodungallore and Baypore ports are ready to handle food grains and the first shipment of wheat is expected to arrive in November.
We have also identified Kollam and Azhikal ports for setting up LPG terminals. After the recent road accident in the State involving an LPG tanker, we have decided to go ahead with this plan on a priority basis.
What is the subsidy for coastal shipping announced recently by the State?
To promote costal shipping, the Government proposes to provide financial support. Coastal cargoes will get a direct subsidy of Re 1 a tonne per km. Coastal vessels will enjoy a discount in port charges. Besides, soft loan will be provided to buy vessels at an interest rate of two per cent for up to 40 per cent of the cost of the vessel, and at a rate of 10 per cent for up to 80 per cent of the vehicle’s cost.
Is there a Budget provision for the scheme?
The proposal is to create a Rs 300-crore fund to finance the incentive scheme, which will be operated by the State Maritime Board. This will be from the Rs 930 core allocated for the development of the sector.
What about passenger transport?
We are developing passenger facilities linking major tourist destinations, such as Kollam, Alleppy and Kochi. We also plan to have regular passenger service from Valiyathura in Thiruvanathapuram to Baypore in the north. This will link the two major intentional ports in the State.
Will all the new projects come under the proposed State Maritime Board? When will it become functional?
We have completed all legal formalities and are awaiting Cabinet approval to constitute the board. Not only all port projects but all the maritime resources will come under the board. These include all infrastructure up to 12 nautical miles. In Kerala, they also include inland waterways as they are covered by river-sea vessel regulations.