The Hindu Business Line : Kochi Port clarifies on terminal privatisation

THE management of Kochi Port has come out with a clarification on its proposed move to hand over the existing container terminal to private investors even as trade unions in the port are preparing for an indefinite strike from February 11 protesting the move.

The Port Chairman, Dr Jacob Thomas, in a note to all unions, said the management had incorporated several conditions to protect the interests of the port as well as making it investor-friendly prior to development of the international container transhipment terminal (ICTT) project.

The threshold condition on the investor to start construction at ICTT is attaining throughput of 4 lakh TEUs. However, the condition of shifting is not purely volume-driven. The port can conduct a review at the end of six years to assess whether the investor is genuinely on the path of building up volume. If the investor is not found likely to achieve the targets, the port can exercise the option of terminating the contract, the Chairman said.

The upfront fee to be deposited by the investor would be the cost of the port trust's equipment to be taken over by the licensee as determined by an independent valuer. The option to remit the same in instalments is also given to the licensee. The license fee to be remitted by the investor annually would be based on the value of the immovable assets made available at the Rajiv Gandhi Container Terminal (RGCT), Dr Thomas said. The income due to the port during the period that the operator runs the RGCT would be the percentage of the revenue share offered in the bid, license fee payable annually and berth hire/piolotage/port dues.

Referring to the terms and conditions in respect of ICTT, the Chairman said the construction of the first phase would be completed within 24 months after reaching the threshold throughput of 4 lakh TEUs at RGCT. The delay beyond 24 months would be charged at Rs 1 lakh per day. The income due to the port during the period that the operator runs ICTT would be the percentage of revenue share offered in the bid and the berth hire/pilotage/port dues, etc.

Meanwhile, the Cochin Port Labour Union (CPLU) has reiterated its demand to withdraw the move to hand over RGCT to private investors on the ground that the terminal had become a reality following a written commitment given by the trade unions for its sanction. The CPLU President, Mr M.M. Lawrence, said many workers especially private labour employed in the port had suffered heavy job loss and reduction in earnings in setting up the terminal. "This sacrifice must not go in vain and that is why RGCT must remain in the existing organisational set up," he said.