The Hindu Business Line : International terminal at Kochi

CONSIDERING the potential for establishing and operating an international bunkering terminal (IBT) at Kochi, the Kochi Port Trust has invited offers from interested parties to grant licence to set up and operate IBT to vessels calling at the port and those passing through international waters.

A full-fledged bunkering service arrangement is one of the essential facilities which a port should have to attract shipping lines. Such a facility, apart from benefiting the shipping lines calling at the port, enables the port to earn a fair amount of revenue, Mr A. Janardhana Rao, the Deputy Chairman said.

It is estimated that the operator will have to spend about Rs 45 crore in the first phase, including the cost of constructing berthing facilities as well as the operating costs. For completion of the second phase, the estimated cost will be about Rs 150 crore.

According to Mr Rao, the present bunkering scenario showed that the major bunker stops in the international trunk trade routes are Singapore in the East, Fujairah in the Persian Gulf, Rotterdam at Europe, Houston in the US, and Durban in Africa.

In the Indian Ocean region, four prominent international bunkering services are offered at Singapore, Fujairah, Durban and Colombo supplying about 35-40 million tonnes of bunkers annually.

Though Colombo is a prime bunkering terminal, he said the bunkering traffic has tremendously come down there on account of various factors such as the disturbing political situation and lack of sufficient infrastructure development. Hence, many of the vessels that had been calling at Colombo have diverted their operations to either Singapore or Fujairah.

This situation has brought out the need for developing a bunkering terminal in the Indian Ocean near Colombo, which has encouraged Kochi port to moot a proposal in this regard in the harbour. In the arena of international trade, the port's proximity to the main shipping route promises to make it an important commercial centre of the world and a principal global hub port, Mr Rao said.

Kochi enjoys a geo-strategic locational advantage in being a prominent Indian Ocean port situated close to the busiest maritime highway connecting Europe and West Asia to the Far East and Australia. More than 17,000 ships transit the Suez Canal every year and it is estimated that, on an average, about 20 vessels ply close to Kochi daily.

The fact that the order book for new vessels continues to burgeon at the shipyards across the world is a sure sign that the bunker demands would continue to grow, he added.

Besides, as one among the 12 major ports in India, Kochi has the facilities for all official clearance requirements, such as Customs, immigration, port health, etc., and other service facilities such as dry dock, proximity to ship-repair/building yard, and an international airport facilitating transfer of spares and other services needed for ocean-going ships and tankers.

Kochi also has a crude oil refinery producing fuel oils required as part of the bunkering operations.

Referring to the features of the proposed IBT, the Deputy Chairman said cost and quality of bunkers are important parameters that give a bunkering terminal the edge.

Both these factors are taken care of, in that, being located in the Special Economic Zone, the project will enjoy all the concessions and benefits of tax and duty exemptions.

It is expected that the terminal, if set up, will have to handle a volume of about 4,000 tonnes of bunkers per day. The activities, such as lube oil supply, fresh water supply, de-slopping, garbage collection, ship repair, crew change and storage facilities, could be considered.

The licence period for establishing and operating the bunkering terminal will be 30 years. The selected operator will be given exclusivity for 10 years or annual bunker supply for three years.

The port will provide anchorage area of about 4.5 square nautical miles in the open sea within the port's limit and land and water frontage on lease, as per requirements for developing the facilities.

Aggressive marketing coupled with hassle-free services, dedicated and reliable supply of quality grade fuels matching international standards and specification at internationally competitive price will ensure that Kochi port becomes a major bunkering destination in the region.