The Hindu Business Line : Development works at Kochi port cruising along

We are reconstructing ageing facilities and building modern infrastructure to support the terminals coming up here. The port’s vision is to emerge as a world-class regional hub in the Indian Ocean, offering cost-effective logistics solutions to maritime trade.

MR N. RAMACHANDRAN, KOCHI PORT TRUST CHAIRMAN

V. Sajeev Kumar

With the commissioning of the Single Point Mooring of the BPCL-Kochi Refinery and the commencement of civil works for the international container transshipment terminal at Vallarpadam, the Cochin Port Trust has achieved a major milestone in implementing two of the ambitious development projects envisaged under the National Maritime Development Programme (NMDP) of the Government of India. The port had lined up a bouquet of development projects that intend to provide the entire gamut of maritime-related services.

However, there are some more projects that are yet to come up. The Port Trust Chairman, Mr N.Ramachandran, spoke to Business Line on the status of the remaining projects. The port has a vision “to emerge as a world-class regional hub port in the Indian Ocean, offering cost-effective logistics solutions to the maritime trade”.

Excerpts from the interview:

What is the progress on the remaining development projects under NMDP?

The project feasibility report for the cruise terminal has been submitted. As far as financial structuring is concerned, it needs more fine-tuning. The final feasibility report will be submitted only after that and then we will proceed for expression of interest. The port has to receive approval from the Government of India for the project as it requires clearance from the Public-Private Partnership Appraisal Committee.

As far as LNG Terminal is concerned, the port is negotiating with Petronet LNG on the licence agreement as the company had demanded some departures from the existing policy. This is beyond the power of the Port or the Shipping Ministry.

There are some issues, such as the tenure of the land, that delayed the signing of the agreement. There was a meeting at PMO last month and it was decided that all departures from the policy will be put up to the Cabinet Committee of Economic Affairs for special clearance. The licence for the concession agreement can be signed only after that.

Meanwhile, Petronet LNG has started developing the land at Puthuvypeen by constructing a boundary wall and raising the land level. The port has also initiated steps to develop the roads and drainage section to the SEZ area. The port will get substantial benefit out of the terminal as it is going to be a major source of income in the form of wharfage and vessel-related charges. Regarding the bunkering terminal, all port-related constructions should be carried out on PPP model or BOT as per the new policy of the Centre.

Instead of Bunkering Terminal, the port is looking for constructing a new Multi Purpose Liquid Terminal under PPP model and once it is ready, it can also be used for extending bunkering services to ocean-going vessels. Terminal experts from the Indian Ports Association are undertaking a technical and financial feasibility study of the project and their report is expected in a month’s time. Tenders in this regard will be floated only after PPPAC clearance.

How will the port manage the loss of revenue on account of the commissioning of SPM

The next two years will be difficult for the port on account of SPM as there is a shortfall of about Rs 40 crore in annual revenue. The port is handling roughly 10 million tonnes of cargo of BPCL-KRL that comprises crude (7.5 million tonnes) and petroleum products (2.5 million tonnes). The present wharfage rate is Rs 65 per tonne. Once the crude moves to SPM, the wharfage rate will drop to Rs 25 per tonne, which means that annual revenue will fall from Rs 65 crore to Rs 25 crore.

Given the situation, the only option for the port is to increase revenue by enhancing the cargo base and improving productivity and efficiency. The under-performance of public sector FACT was also a setback to the revenue of the port. This year, we are down by half a million tonnes of fertiliser raw material.

KRL has said they will continue to use the Cochin Oil Terminal facility for export of products. We also have to look for alternatives when KRL is not using the facility. Within the next two years, we will be able to improve our cargo handling volumes. The wharfage charges from LNG will be a major revenue earner for the port.

We are in the process of renewal and reconstruction of ageing facilities and also building modern infrastructure to support the new terminals that are coming up here. To support the mega projects, we are modernising our support infrastructure. A new 110 KV power supply system is already under implementation. For high precision navigational safety, a sophisticated Vessel Traffic Management System is under implementation.

What steps have you taken to end flash strikes?

I have two clear choices before me. The easier option is to succumb to the pressures and continue the way we have always been. The more difficult option is to take the road less travelled, face the issues upfront, suffer the pain today and clean up the system. This may involve some strikes and work stoppages, but I believe it is worth it.

An overwhelming majority of workers are totally against the culture of flash strikes and work stoppages. They want to work and contribute towards the developments of the port. In fact, it is the hard work and team spirit shown by these workers that is keeping the organisation afloat. Even among trade unions, there are some excellent leaders who are extremely supportive of the actions taken by the management.