The Hindu Business Line : Sprucing up of southern ports

With a chunk of the projected 10 million TEUs expected to sail towards the southern ports in the next few years, Chennai, Tuticorin, Ennore and Kochi are gearing up with big expansion plans. And there will still be enough cargo for everyone, according to the PSA-Sical General Manager, Mr John Quok.

TUTICORIN PORT IS becoming an important gateway to the US, Europe and Mediterranean following direct sailings to these regions. — Bijoy Ghosh

The southern ports of Chennai, Tuticorin, Ennore and Kochi (at Vallarpadam) are planning new private container terminals at an estimated cost of over Rs 3,500 crore. Chennai and Tuticorin will have second container terminals and Vallarpadam a new container transhipment terminal costing about Rs 2,300 crore. Ennore is also planning a container terminal costing around Rs 400 crore.

India's container handling is likely to double to around 10 million TEUs (twenty foot equivalent units) in the next four or five years, and a significant portion of the cargo will come to the southern ports.

Will these private terminals compete with each other for cargo? "No. They will not compete, but complement each other," says Mr John Quok, General Manager, PSA Sical Terminals Limited, the private container terminal operator at Tuticorin port.

Each of these ports is emerging as a gateway for various destinations. Tuticorin is becoming a gateway to the US, Europe and Mediterranean following direct sailings to these regions. Similarly, Chennai is emerging as the preferred port to East Asia, as Kochi is for West Asia, he said.

Enough room for all

This trend started about a year ago, and will grow stronger once the new terminals (all under build, own and operate) start operations. With the kind of growth projected, there will be cargo for everybody, he said.

While the Vallarpadam terminal is to be built by Dubai Ports International, the Chennai Port Trust (CPT) will invest Rs 100 crore in the Rs 492-crore project at Chennai port that has recently got government clearance. The CPT investment will cover works related to dredging, modernising the wharf and providing connections to the terminal. The terminal is coming up on the East Quay.

In Tuticorin, the second container terminal costing Rs 150 crore will come up at the eighth berth, and PSA Sical is one of the bidders. Ennore is yet to formally announce its plans for the container terminal.

PSA Sical has so far invested around $35 million (Rs 157 crore) in the private Tuticorin Container Terminal (TCT) and, in the last 18 months, it spent $8 million (Rs 28 crore) on five hectares of yard-space, four yard cranes and one quay crane, said Mr Quok.

In PSA Sical, the Singapore-based PSA International holds 57.5 per cent stake, the Chennai-based Sical Logistics has 37.5 per cent and Mr Chandradoss, a Singapore national, 5 per cent. The company signed the BOT agreement with the Tuticorin Port Trust on July 15, 1998 and started commercial operations on December 21, 1999.

The terminal has the capacity to handle annually 4.50 lakh TEUs. This year, the TCT will handle about 3.50 lakh TEUs, and the terminal will hit saturation in three years.

Volumes at Tuticorin

In the first half of the current year the terminal handled 1,60,800 TEUs compared with 1,58,000 TEUs in the corresponding period last year. Of the total volume handled, 52 per cent was for export, 26 per cent for import and the rest empty boxes, said Mr Quok.

Of the total exports from TCT, 25 per cent was to Europe, 20 per cent to the US, 20 per cent to East Asia, including China, 15 per cent to Colombo, 10 per cent to West Asia and the rest to the Mediterranean.

The terminal's average handling was 27 moves per gantry per hour compared to 22 moves by Chennai and Nhava Sheva and 15 by Kochi. "We are on par with any of the international container terminals," he said.

China connection

Through direct sailings to China the terminal currently handles about 800 boxes a month from and to China. Cargoes such as cotton yarn and cotton piece goods are exported to China, and fabrics (200 boxes a month) and machinery (250 boxes) are imported from China.

On June 15, the China-Middle East sailing service between the TCT and China (via Singapore) was started by the Wan Hai shipping line. This is the third direct mainline service to call at Tuticorin after the India-US Express (in May) and the Round-the-World Service (in 2004), Mr Quok said.

Africa service

A direct sailing between Tuticorin and Africa by one of the shipping lines could be expected next year. At present, only about 250 boxes of cargo are exported to Africa every month, which is low to start a direct sailing, said Mr Quok.

Export cargoes to Africa, mainly to South Africa, include safety matches (around 30 per cent of total exports to Africa), agricultural products and garments, he said.

On imports, Mr Quok said raw cashew is the principal cargo coming from Africa. It is a season-based cargo and, between September and January, around 400 boxes of raw cashew come from East Africa.

Between April and September around 3,000 boxes come in from West Africa. The cargo goes to Kollam, in Kerala — a seven-hour drive from Tuticorin — and the processed cashew is exported to Europe, Japan and the US, he said.

DP World takeover

The takeover of India's major container terminals, including Chennai and Nhava Sheva, by the Dubai-based DP World from P&O Ports will raise the bar of container operations in India, said Mr Quok. "We do not see this as a threat," he said. It may be recalled that in February DP World acquired P&O, a British maritime company. The takeover has raised the bar for any container terminal operator to achieve a higher standard of efficiency. "We are now competing with a world-class terminal operator," he said.

The higher standards (minimum of 25 moves an hour) will help shippers, as better efficiency would lead to quick turnaround of vessels, he said.