Adani Ports is building a container terminal at Kamarajar Port Ltd at Ennore, north of Chennai. It will be a game-changer for the port, MA Bhaskarachar, CMD of Kamarajar Port Ltd, India’s first corporatised major port that comes under the purview of the Centre, told BusinessLine in an interview. Excerpts:
When is the container terminal likely to be commissioned? What will it mean for operations?
At present, cranes are being assembled and, by December 15, we plan to start operations. The container terminal will be a game-changer for the port, which has been always branded as a bulk port. Once container operations starts, we will gain importance in global maritime and become a multi-cargo port. At present, there are a few captive users of our berths. Coal is used by Tamil Nadu Electricity Board; common user terminal by five or six importers; cars by five or six companies and liquid cargo by a couple of oil companies. However, if the terminal starts, hundreds of exporters and importers will use the facility. The port’s image will change drastically.
It all depends on the facilities and tariff that each terminal provides. Each should compete using its own advantages. Whichever port is efficient, competitive and provides better productivity will get the cargo. Adani has invested money at Kamarajar port, and cannot keep the terminal idle. There is a Minimum Guarantee Throughput committed by it and there is revenue sharing of 36 per cent. There will not be any conflict of interest between the two terminals. It is up to the Adanis how they are going to handle the two terminals. If Adani was not present at Kattupalli, this terminal would have suffered as there would be more competition from some other player. To arrest this, Adani will have control over two ports and balance the competition between them.
Where is the cargo coming from?
Some cargo that is going to Chennai port will get diverted to either Kamarajar or Kattupalli. Container traffic is growing globally, and we need to take advantage of it. We have good rail and road connectivity, and no habitation nearby to create traffic congestions. Bengaluru, Coimbatore and the South Indian hinterland handled by Krishnapatnam and Chennai can come to our ports.
What about other category cargo?
The LNG terminal is under construction and expected to be ready by 2018. Two more liquid cargo berths are coming up. One will be a captive berth for IOC and the other for different users. We will have two more coal berths for TNEB. In multi-cargo, we can handle granite, steel, machinery and clean cargo.
What will be your capacity in two years?
We will increase capacity to 90 million tonnes (mt) from the existing 35 mt. This will be enough for five-six years. However, by 2025, we will have a capacity of 140 mt.
What are the challenges you are likely to face?
It will be mainly from competition and how handling of coal will be split between imported coal and domestic coal. We are fully mechanised. We will continue to be a landlord port and bring investment via private players.
Connectivity will be critical for you, right?
We have rail and road connectivity sufficient for the time being. We will have a special purpose vehicle formed along with Kattupalli port for rail connectivity and the State government is doing the Northern Port Connectivity road with land acquisition being done. The northern rail connectivity project is being taken up by the port.
How competitive is your tariff when compared with Chennai?
Vessel-related charges for container ships are higher than Chennai port, which reduced its rates to attract cargo from other ports. Since they have offered a rebate, their tariff is lower than ours. We need to do the same exercise and reduce VRC, which is very high, to the level of Chennai port.
We will take up this with our board. We want to make it on par with Chennai port, as both are government ports.