The Hindu Business Line : Chennai Port irked by Ennore's plan for clean cargo berths

THE Chennai Port Trust is irked by plans of the fledgling Ennore Port Ltd to build clean cargo berths and has sought the Government's intervention in this regard.

Fearing loss of business once the newly built Ennore Port develops clean cargo handling terminals, the Chennai Port Trust has urged the Shipping Ministry to frame a suitable policy on handling cargoes by the two Government-owned major ports.

A top Chennai Port Trust official told Business Line here that Ennore Port was constructed basically as a satellite port to handle dirty cargoes such as coal and iron ore that are currently shipped through Chennai. But, the first major port in the country set up as a corporate entity has discarded its tag of a pure dirty cargo port to develop terminals catering to clean cargoes such as containers, LNG, LPG, POL products, chemicals and liquids, putting the Chennai Port in a spot.

The Chennai Port Trust has submitted before the Ministry that the two ports should not compete with each other for traffic but should be complimentary to one another. "The satellite port of Ennore should restrict itself to the role of handling dirty cargoes and not compete with Chennai for handling clean cargoes," the Port Trust has politely told the Ministry.

The official said that Chennai Port was not afraid of competing with Ennore Port for traffic. "But there should be fair competition and not unfair competition as is the case now. Competition should be on a level-playing field," he stated.

The Chennai Port Trust is of the view that pricing was a major issue that will tip the scales in favour of Ennore Port. While one Port comes under the "administered pricing" regime, the other follows the "free pricing" formula.

Being the first corporate major port in the country set up under the Companies Act, 1956, Ennore Port will be free to fix its tariffs based on market forces and would even be able to cross-subsidise one cargo with another.

For instance, after the coal and iron ore traffic are shifted from Chennai to Ennore, the trade will have no choice but to patronise Ennore Port even if it charges high tariffs for handling these dirty cargoes, the Port Trust reckons.

"But, being a major port set up under the Major Port Trusts Act, 1963, Chennai Port is regulated by the Tariff Authority for Major Ports. All our tariff proposals will have to be approved by TAMP. So, where is the level-playing field," the official pondered.

He added that the Government will have to come out with a policy on handling cargoes at both the ports keeping their long-term interests in view.