The Hindu Business Line : Port city — The nerve centre of economic activity

The hinterland abutting Tuticorin owes its economic advantage to the Tuticorin port, which has made enormous contribution during the last 33 years since it commenced its commercial operation.

Due to its strategic location in the southern peninsula and assured round-the-clock operations, the port has been the nerve centre of economic activity in south Tamil Nadu.

Emergence of industries such as Southern Petrochemical Industries Corporation's fertiliser plant, Tuticorin Alkali and Chemicals, Tuticorin Thermal Power Station, Sterlite Copper Ltd, Dharangadara Chemical Works, and installations of Indian Oil Corporation, Caltex, and Indian Potash Ltd would not have been possible without the port, says Mr N.K. Raghupathy, Chairman, Tuticorin Port Trust.

By attracting cargo from its hinterland comprising south Kerala, south Tamil Nadu, Karur- Tirupur- Salem- Coimbatore area, south Karnataka and central Tamil Nadu, the gateway port has generated huge employment potential in other service sectors especially transport, container freight stations and warehousing.

The emergence of a vibrant small-scale sector around Tuticorin, competitive timber trade from Chennai and Kochi, and export of granite from quarries around Madurai are due to the port to a very large extent. Employment generation in the State and Central Government offices in and around Tuticorin is a direct consequence of the port's emergence as a major infrastructural facility in the country.

A dedicated team of officers and disciplined work force, friendly and customer-oriented government and quasi-government organisations and a network of competent, resourceful and committed shipping industry in Tuticorin add to the advantage the port offers to Tuticorin, and toentire south Tamil Nadu, he adds.

In an interview with Business Line, Mr Raghupathy further tells about the port's important role, and the road ahead for it. Excerpts from the interview:

Given the current scenario, do you foresee Tuticorin's continued dependence on the port?

The socio-economic development of the port's hinterland will continue to be dominated by the port activities in the foreseeable future. Tuticorin's development has centred around the port and existing industries and also those targeted to come up in the port's hinterland will thrive due to continued efficient operations, expansion and development of the port.

The port also has the potential to contribute to the area becoming a thermal and nuclear power hub. The increase in coastal shipping in the aftermath of commissioning of Sethusamudram Ship Channel Project in about two years from now will add to the competitive edge of the industries in the port's primary hinterland.

How do you assess the port's performance last fiscal?

The port had two very good years in 2004-05 and 2005-06 when its traffic increased from 136.5 lakh tonnes to 171.4 lakh tonnes, though this placed enormous strain on its young infrastructure. We lost the two years in fighting for environmental clearance. This growth was achieved despite limited industrial growth in the port's primary hinterland in the recent past.

Nevertheless, during 2006-07, the port will be achieving a traffic of about 178 lakh tonnes, which will be yet another all time record. The lack of additional capacity, however, ensured that we could not capitalise fully on wheat and fertiliser imports during the year. The port will achieve container traffic of about 3.75-lakh TEUs (twenty foot equivalent units), a growth of about 17 per cent over last year.

Due to effective cost control, our surpluses have always been high. This year, the net surplus will jump to over Rs 100 crore — for the first time in the port's history. We had the second lowest operating ratio (operating expenditure to operating income) in the country in 2005-06 and we are likely to maintain a similar trend this year.

Tuticorin port has been very proud of its improvement in productivity or efficiency parameters since 2002. The only dampening factor in our performance during the fiscal year 2006-07 will be our inability to maintain this trend due to change in cargo mix and infrastructure constraints. The overall performance is by and large satisfactory. The loss of two years in building infrastructure can be made up only during the end of 2008-09.

What other cargos can be developed in Tuticorin through the help of the port trust?

Tuticorin has enormous potential to become the thermal power hub of the region with the port providing supporting infrastructure for handling of the main raw material (coal). Container handling is another area where there is a huge possibility for expansion, given the port's past record in efficient handling of containers and its ability to attract mainline vessels.

Though the vast open area in the vicinity of the port at negligible price offers scope for industrial development - heavy, medium and small-scale industries alike - water for industrial use is an issue. Desalination is an alternative, which needs to be explored. If Government sponsored initiatives for industrial development in the vicinity of the port are forthcoming, such issues can be easily overcome. Development of ship building industry with its ability to generate employment is another activity, which needs encouragement in Tuticorin.

The port's initiative in offering land and other infrastructure for NLC-TNEB power plant is likely to bear fruit within the next few months, if a prudent and pragmatic approach is adopted by the authorities in granting permission for reclamation of land by the power plant in the port. The 2x500 MW thermal power plant appears to be in the final phases of approval. Port land has been offered to another 1,000 MW thermal power plant by the TNEB at concessional rates.

With no need for creation of any additional port infrastructure for handling coal for the new TNEB power plant, it is feasible that the groundwork on the plant will commence in about two years from now.

The port's proposal to develop its Outer Harbour-Phase I through public private partnership will lead to a harbour with 14.8 m draft by 2011-12. If this project materialises by the targeted time, Tuticorin will truly become a regional transhipment hub for container traffic with a quay length of at least 1.5 km.

How was container growth last year?

Container growth rate continues to be impressive with a growth of almost 17 per cent in 2006-07.

But for limited infrastructure available for container handling, this growth rate could have even tripled during the year.

Though the average TEUs handled per hour per quay crane in Tuticorin Container Terminal continues to remain the highest in the country, with only three quay cranes — not all of them can be deployed on most vessels at the same time — the vessel rate is low.

This is not surprising given the effective quay length of only 340 metres in the existing terminal.

It is notable that the terminal has been able to hold its own with an impressive growth in spite of terminals in its vicinity operated by a multinational company.

More Stories on : Interview | Shipping | Tamil Nadu

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