Cargo volume at Kattupalli port in Ennore, run by the Adani Group, continues to increase every month, making it an emerging alternative to Chennai port for container and dry bulk cargo. Adani took over Kattupalli port’s operations from Larsen & Toubro (L&T) last November.

Container handling at the private Kattupalli port more than doubled in 2015-16 to 1.15 lakh twenty foot equivalent units (TEUs), against 46,719 TEUs in the previous year. Dry bulk (mainly steel) volume doubled to 2.45 lakh tonnes (1.10 lakh tonnes). Total number of ships that called the port more than doubled to 190 in 2015-16, against 94 in the previous year.

Cheaper port

The port managed to attract a portion of the cargo from Chennai port, and also got incremental cargo from the hinterland stretching up to Bengaluru and Hyderabad as it is cheaper for ships to call at Kattupalli.

Major automobile manufacturers located in Chennai and Karnataka, and steel companies such as Tata Steel and Essar Group are now regularly using Kattupalli port, sources said. Kattupalli port is a deep-water all-weather port located 35 km north of Chennai. With two berths having a total quay length of about 710 m to handle 1.2 million TEUs per annum, the port commenced commercial operations in January 2013. However, full operation was delayed by more than a year due to delay in getting Customs clearance, sources said.

After Adani took over, there has been increase in existing ship services. Addition/shifting of services of major shipping lines such as Evergreen, Simatech, Maersk Line, Wan Hai and Hyundai to Kattupalli from Chennai port helped in volume increase, sources said.

Terminal Handling Charge is same at both Kattupalli and Chennai ports. However, vessel-related charge at Kattupalli is nearly 35 per cent lower than Chennai, which two private container terminals operated by DP World and Port of Singapore Authority.

Terminal

Last November, L&T entered into an in-principle agreement with the Adani to sell Kattupalli port. The State government has approved the proposal and now the de-merger need to be approved by the Madras High Court, after which the Ministry of Commerce will issue its clearance as the port is a Special Economic Zone.

At present, Adani is only an operational contractor and pays ₹76 crore every six months to L&T. Last month, the EBIDTA was ₹5 crore.

To breakeven, the terminal needs to handle every month at least 50,000 TEUs to get an EBIDTA of around ₹15 crore, sources said.

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