East coast ports in the country have long been treated as poor cousins of the western ports, as the latter have enjoyed some historical advantages. However, the tide has turned in the last few years. Now, the Government has also adopted a “Look East” policy. So, exciting times are ahead for the ports on the east coast, but there are still many challenges to be overcome and the path is by no means smooth and straight. This was the general view of speakers at the two-day east coast maritime business summit held in Visakhapatnam, last week.
Eastern challenges
According to Kolkata Port Trust Chairman R.P.S. Kahlon, who is also in charge of the Visakhapatnam port, with the addition of the new capacity, the traffic share of east coast ports is expected to go up in the near future.
Quoting a KPMG report, he said the share of ports on the west coast in the maritime trade would go down to 66 per cent from the present 77 per cent by next year and the trend is likely to continue.
Two major ports are coming up on the east coast, one at Sagar Island in West Bengal and the other at Dugarajapatnam in Andhra Pradesh. RITES has completed the feasibility study for the Sagar port and it is expected to take up the study for Dugarajapatnam shortly. Besides, many other ports are adding to their capacities. The capacity of Visakhapatnam port will cross 100 million tonnes after the completion of the ongoing projects taken up in public-private-partnership (PPP) mode and it will be better placed to face the competition from private ports, such as Gangavaram and Krishnapatnam.
Draft (water depth), is a problem faced by many ports and they are taking up dredging to deepen the channels to receive bigger vessels. Kahlon said, “Kolkata and Haldia are, of course, riverine, estuarine ports and, therefore, there is no escaping the problem of low draft. Continual dredging is required and it becomes expensive for the users. We have, therefore, taken up the Sagar port. Roughly, Rs 8,000 crore may be invested on the port. The first phase may be over in three years or so. The total project may be completed by 2019,” he said. When the problems of connecting Sagar Island with the mainland and the hinterland were brought to his notice, he said they would have to be tackled.
Many hurdles
Containerisation of cargo was another critical issue discussed at the two-day summit. Concor Chairman and Managing Director Anil K. Gupta said that containerisation of cargo was low in the country and it was lower on the eastern ports.
“Cargo shift from the west coast to the east coast is taking place all right, but we also have to focus on containerisation. Ports on the east coast have to create facilities for handling containers. We are setting up 15 new terminals during the current plan period, nine of which will be linked to the eastern ports. Four of them will be located in Odisha and three in Andhra Pradesh, and we will be spending Rs 1,150 crore on these nine terminals alone. Overall, we will spend Rs 3,000 crore on the 15 terminals and Rs 3,000 crore on creating other facilities. A sum of Rs 3,000 crore will be invested by the private sector during the period,” he said, adding that these measures would give a boost to containerisation on the east coast.
Dhruv Kotak, Director of JM Baxi & Co, made a forceful plea that the Government should also consider relaxing cabotage norms for Visakhapatnam as it did in the case of Vallarpadam.
He said, “I believe Visakhapatnam is the true trans-shipment hub in the country. The port is currently handling 1,50,000 tonnes of trans-shipment cargo without any cabotage relaxation. If the norms are relaxed, it will not only help Visakhapatnam port, but Kolkata and Chennai as well.” He further added that 2.3 million containers were available in the Bay of Bengal region and “if Visakhapatnam gets cabotage relaxation, the country can save up to half a billion dollars.”
According to Dredging Corporation of India Chairman and Managing Director D.K Mohanty, poor rail/road connectivity with hinterland is the main reason for many ports, such as Paradip and Ennore, not making any headway. “Their performance does not match their potential. Take Paradip, for instance. In fifty years, the port is now able to handle only 50 million tonnes. It is poorly connected by rail with the hinterland and the cargoes have been diverted to Haldia, in spite of all the draft problems at Haldia. Ennore is also poorly connected by road and it takes nearly four to five hours to cover a distance of 100-120 km. It is a real nightmare. Things may improve for Ennore, if the Chennai-Bangalore dedicated freight corridor is completed,” he said.
He said that no port could now claim exclusive hinterland as in the past, which is a good trend. “Many non-major ports, as they are now called, are coming up in the private sector and, therefore, port users now have a choice. They will now go to the cheapest and most user-friendly port,” Mohanty said.
Gross neglect of coastal shipping and inland waterways for all these years is seen as one of the factors for poor connectivity with the hinterland. Urgent steps would have to be taken to correct the situation, said speakers at the seminar.
“I require 5,000-6,000 tonnes of material for my refractory in Visakhapatnam and it is available on the west coast but I find it cheaper to import it from China than from the west coast. It is an example of how we have neglected coastal shipping,” said R.V.S. Raju, an entrepreneur participating in the debate.
Some of the speakers were also critical of the role of the Tariff Authority for Major Ports and alleged that the authority had become a bit of a hindrance to attracting private investment into the port sector and it was hindering public sector ports from competing with the private ones effectively.