The Hindu Business Line : CII-ICRA study on strategic plan — `Chennai must turn a facility provider'

THE Chennai Port Trust should shift from being a ``service provider'' port to a ``facility provider'' thereby generating additional revenue. The Chennai port should also redefine itself to be ``a preferred port of call'' on the East Coast in the short term and as a ``logistics hub'' over the long term, with a focus on container traffic and operating as a ``landlord port''.

This has been suggested by a CII-ICRA study on strategic plan for the Chennai port, released on Thursday at the Suminfra 2003.

Briefing newspersons on the study, the Chairman of the Working Group on Ports, CII (SR), and Director, Bengal Tiger Line (India) Ltd, Mr B. Sridhar, said that to redefine itself, the Chennai Port Trust should address critical issues such as structure, business mix/positioning, external linkages/infrastructure, operational improvements and financial strategies.

A transition to a landlord port structure, wherein majority of services and the terminal operations would be performed by the private sector, would help the port trust in improving its operational performance, he said quoting the report. A cause of concern for the Chennai port was the high operational expense, contributed by the high labour cost, accounting for 60 per cent of its total costs. The port trust was in the process of rationalising its existing manpower through implementation of a voluntary retirement scheme (VRS). It should target to reduce its total employee cost to be 30-35 per cent of the total cost structure over the next three to five year, to bring in line with the industry, said Mr Sridhar.

The port trust needed to progressively move towards the landlord model, which is expected to enhance the operational efficiencies/productivity of the port through increased participation of the private sector, he said.

According to Mr Sridhar, to arrest the decline in total cargo throughput due to shift in coal and iron ore (iron ore is likely to be handled at the Ennore port from 2005-06) to the Ennore port, the Chennai Port Trust needed to focus more on containerised cargo. The port trust needs to explore the feasibility of converting some of the existing berths to container berths. This would also entail increasing the draft of the berth (Dr Ambedkar Dock) to handle the containerised cargo. The port trust should also direct efforts to expanding the existing hinterland. This could be done by aggressive marketing efforts to attract traffic from the southern hinterland, he said.

To become a regional logistics hub and a transhipment port on the East Coast, the study said that this could happen only if the port trust was able to attain critical mass in terms of its containerised throughput, as that would draw the attention of mail line vessels, which would then start using the port as a preferred port of call. Road and rail connectivity to the port was another critical issue the port trust should take care, he said.

It will be possible for the Chennai Port Trust to tide over the expected decline in revenues from shifting of iron ore and coal by increased container traffic of about one million TEUs by 2007. This is in addition to other cargo such as automobiles and general cargo (granite, spices and coffee). This would take the total cargo throughput to 40 million tonnes per annum, which appears to be the optimum capacity for the port trust, said Mr Sridhar referring to the study.

Article E-Mail :: Comment :: Syndication

Stories in this Section
IA hikes fares by 15 pc

Air India special flights bring passengers from Kuwait

Special flight from Kuwait lands in Kochi

Gulf flights to India operating as usual

No UN certifying inspectors at ports — Exporters in a fix over Iraq-bound cargo

Foreign flag ships hike chartering rates

Fall in tea exports through Amingaon ICD

CII-ICRA study on strategic plan — `Chennai must turn a facility provider'

Concor eyes cold supply chain biz