The Hindu Business Line : Increasing container traffic — Another terminal may box in Chennai port

The Chennai Port Trust (ChPT) is thinking of a second container terminal inside the Chennai port to meet the increasing container traffic, and also provide an alternative to the trade.

The private terminal, which is operated by Chennai Container Terminal Limited (CCTL) of P&O Ports, is likely to close 2004 with a throughput of over six lakh TEUs (twenty foot equivalent units), against 5.39 lakh TEUs last year.

The throughput in the next couple of years could even touch around 7.5 lakh TEUs, and the private terminal will be choked by then.

But will a second terminal inside the Chennai port decongest the container terminal and provide an alternative avenue for users?

There are different views on this. Yes, in the short term the second terminal could provide some solution by decongesting the private terminal.

Also, with frequent strikes in the last few months in the terminal, the second terminal would provide a short-term alternative.

However, with container volumes set to increase considerably, a second terminal inside the city may neither be the ideal solution nor help the trade in any way. And, reasons are many.

Unlike some of the other major ports, the Chennai facility is located within the city.

With no dedicated road access available to the port, vehicles from and to the port use the same road infrastructure that is available for the public.

This is a major hurdle to accessing the terminal, and the situation would only worsen if the second terminal comes up inside the port.

Further, a strike or even a minor disturbance inside the container terminal has a ripple effect on road traffic in North Chennai.

Container trailers line up for over a kilometre and often create traffic problems in the area.

The fishing harbour that is located close to the zero gate of the Chennai harbour also affects traffic flows from and to the zero gate, say sources.

Another problem of a terminal coming up inside the port is the non-availability of yard space, and of wharf strength — it needs to take the loads of the quay and gantry cranes.

Further, with charter rates being high, nobody would want to bring geared vessels, said a ChPT source.

And, the solution for the problem, according to sources in the maritime industry, is the speedy implementation of a private container terminal at Ennore Port Limited (EPL) instead of wasting money on a second terminal inside Chennai port.

The Chennai port users have been demanding a second terminal ever since CCTL took charge three years ago. Their views are that the trade does not have an alternative terminal during any disruption.

For instance, there have been frequent labour problems at the private terminal in the last few months, and the users could have shifted to other terminal during such problems at the Chennai container terminal, and vice-versa.

Moreover, from a public monopoly, when the container terminal was under the control of the port trust, it has now become a private monopoly, with all the attendant problems and disadvantages.

The private monopoly, the users feel, would in the long run be detrimental to the trade. An alternative and competitive terminal, as in Mumbai, would help users in the long run.

Mr M. Raman, Chairman, Ennore Port Ltd, once observed that private or public monopoly is not good for the trade. "If the situation demands, we need to re-look at the concession agreement with CCTL to include efficiency parameters.

"However, this should be done without sending wrong signals to potential investors," he had said at a seminar a few months ago while holding additional charge as ChPT chairman.

Ennore Port Ltd, the country's first corporatised port, located about 25 km north of Chennai, not only has adequate back up space but also good road links.

The EPL plans to construct a container terminal in the next 24 months. To be built on a build-own-transfer (BOT) model, the cost of the project would be Rs 300-400 crore.

The company will come out with a request for qualification (RFQ) to select the container terminal's developer, and the project will be done through an open tender basis.

Mr Raman said that P&O Ports might not be allowed to bid for the Ennore container terminal that would be leased out to a private firm for 30 years. A decision on this (to bar P&O Ports from bidding) will be taken and communicated while issuing the RFQ.

The EPL will take a similar stand to that of Jawaharlal Nehru port, which disallowed P&O Ports to bid for another terminal in the port. "We want to avoid a complete monopoly by a private operator," he said.

Eight parties have shown interest in developing the container terminal at Ennore. EPL had commissioned a detailed feasibility report by the Indian Ports Association and a market study by the Confederation of Indian Industry to assess the potential for a terminal at Ennore.

These reports have been received and are under examination. The port is also in the process of selecting an advisor on the bid process.

The terminal will be able to handle about 6 million TEUs a year, and the depth in the terminal would be 15 metres to handle container vessels up to 8,000 TEUs capacity.

According to sources, the terminal at Ennore will not take away container traffic from Chennai.

The market for container handling in the country is projected to quadruple in the next ten years to about 16 million TEUs. Trade in North India is also expected to divert cargo to Ennore.