The Hindu Business Line : Govt stipulates new terms for Kochi container terminal

IN its fresh attempt to build an international container transhipment terminal (ICTT) at Cochin Port with private investments, the Government says that the Rs 2,000-crore project will be both "volume and time-driven".

The successful private operator will be allowed to operate the existing Rajiv Gandhi Container Terminal (RGCT) of the Cochin Port for 10 years before shifting operations to the new site at either Vallarpadam or Puthuvypeen islands.

But, the private operator should start work on building the ICTT at Vallarpadam or Puthuvypeen upon reaching the cut-off limit of 4 lakh twenty-foot equivalent units (TEUs) at RGCT. And, within two years of handling 4 lakh TEUs, the private operator should shift operations to the ICTT, a Shipping Ministry official told Business Line.

This means that if the private operator handles 4 lakh TEUs during the fifth year of operations at RGCT, he should shift operations to the ICCT during the seventh year. In case, he reaches the threshold level of 4 lakh TEUs during the eighth year of operations at RGCT, he should shift operations to the ICTT during the tenth year.

The concession and licence agreement to be signed with the private operator will also incorporate a clause on "reviewing the position in the eighth year of operations" at RGCT.

"If it is found on review that the private operator has not been able to reach the cut-off limit of 4 lakh TEUs during the eighth year of operations at RGCT and the development of a ICTT is not viable, the concession and licence agreement will be terminated at the 10th year of operations at the RGCT. In such an event, the investments made by the private operator in augmenting the cargo handling facilities at RGCT for increasing the traffic, will be compensated fully by the Government," the official said.

In the last attempt to develop the terminal, the Government had stipulated that the private operator should mandatorily shift operations to the ICTT after five years of operating the RGCT irrespective of the traffic levels.

In the new attempt, the Government has also decided to finance capital and maintenance dredging at the port on its own as against the earlier plan to undertake only capital dredging while leaving the maintenance dredging job to the private operator.

"Now, both capital and maintenance dredging will be taken care of by the port trust," the official said.

The private operator has also been given the option to develop the ICTT at either Vallarpadam or Puthuvypeen. "If they find better soil conditions at Puthuvypeen, they can build the ICTT there instead of Vallarpadam," he said.

The 30-year concession period will not include the years spent on operating the RGCT. The project will be developed on the revenue sharing model.