The Hindu Business Line : To raise container throughput

BUOYED by more than 21 per cent growth in the throughput of export-import traffic at 1.25 million TEUs in 2003-04 (1.03 m TEUs in 2002-03), the Container Corporation of India (Concor) is looking forward to scaling greater heights and has accordingly set its targets — 1.8 m TEUs for 2004-05, 2.05 m TEUs in 2005-06 and 2.4 m TEUs in 2006-07 — and initiated measures to achieve this growth. Thus, it has laid a good deal of emphasis on acquisition of BLC wagons (flats); it is also looking into opportunities for probable participation in new container handling terminal projects. But, then, there are also areas of concern.

In 2003-04, the country's ports handled a total of 3.9 million TEUs, projected to rise to 4.5 million TEUs by 2006-07 on the basis of a CAGR (compound annual growth rate) of 12 per cent. At this rate, the container throughput at the major ports should rise to 6.5 million TEUs by 2010. However, according to another estimate, based on 15 per cent CAGR, the port sector's container throughput is to rise to more than eight million TEUs by the same period.

Understandably, Concor would like to have a major share of the projected growth in traffic in the port sector. In 2003-04, its share was less than one-third. True, not the entire container traffic handled in the ports is suited for haulage by Concor. For example, the transshipment traffic is outside its purview. Also, a large number of boxes, an estimated 40 per cent, that come into the port areas and their neighbourhood cannot be handled by Concor. Yet, it is felt that there is scope for pushing up the share.

As a first step, Concor is adding to its fleet of high-speed flats. Right now, the fleet comprises 3,150 such flats, targeted to rise to more than 6,000 in the next couple of years. The near-doubling of the fleet strength is proposed to be achieved by way of acquisition from within. In 2003-04, orders were placed with domestic wagon manufacturers for about 1,500 flats whose delivery is to start from June. Orders for another 1,500 flats are likely to be placed in the current fiscal also. In addition, Concor has floated global tenders for acquiring yet another 2,000 from abroad within the next two years or so.

As for the participation in container terminal projects, it is now common knowledge that the Maersk-Concor combine has emerged as the most competitive bidder for the third container terminal the Jawaharlal Nehru Port Trust is planning. Concor is also floating a joint venture in Nepal to bid for the terminal management job for the Birgunge inland container depot set up in that country with World Bank assistance. It will be Concor's first overseas project. Within the country it is trying to team up with the Paradip Port Trust to handle the entire gamut of operations including the berth operation relating to inbound and outbound container traffic. Concor has also started handling containers for terminals launched by private firms, both Indian and foreign, at the ports of Visakhapatnam and Chennai on the east coast, and Mundra and Pipavav on the west. It is believed to have been sounded for probable participation in container terminals proposed to be set up at Ennore, near Chennai, and at Vallarpadam, near Kochi.

Now the problem areas: First, it is not enough to have a large wagon fleet built up through acquisitions. Far more important is to augment the capacity of both terminals and the route. The pendency problem afflicting the Nhava Sheva International Container Terminal of JNPT for the past several months is believed to have been caused largely by the failure of the authorities concerned to add to the capacity, particularly of the route, well in advance.

Precisely for the same reason, the Railways is now working on the conversion of the Gandhidham-Palanpur (130 km) and Viramgram-Mehsana (80 km) sections into broad-gauge to improve connectivity to both Mundra and Pipavav ports in Gujarat. The work is in progress to expand the capacity of the Cuttack-Paradip section in Orissa. It is also felt that the Ajmer-Delhi section, thanks to the single line network, is already saturated and therefore needs to be double lined.

No wonder, Rail Vikas Nigam Ltd has engaged a Canadian firm, Lea Associates, to examine how to step up the rail connectivity to ports and make necessary recommendations. But all this will take time.

The Maersk-Concor combine's successful bid for the proposed JNPT terminal has already thrown up a good deal of controversy so much so that there is a resistance from political groups to foreign ownership of such facilities in view of the proximity to the country's largest missile torpedo and ammunition storage facility.

The Shipping Ministry, as it has already been reported in this column, is already taking a re-look at the PPT-Concor proposal and one is not sure if the plan to have container terminal at Ennore is really worthwhile.

After all, Chennai port's container terminal, run by P&O Ports, has a throughput of about 500,000 TEUs annually with plans for further expansion. True, there is a limit to which the Chennai container terminal being located within the city could be expanded more so when the volume of hinterland traffic is not very large and several ports like Tuticorin, Kochi and even Visakhapatnam, are vying with each other to have the largest share of that traffic. As Concor knows it too well, the effort to attract traffic to and from North India for Chennai container terminal has not been a great success. Finally, it is not clear yet whether the proposed Vallarpadam terminal will be exclusively a transshipment terminal. If it is so, then Concor will have little to cheer about the project.

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