The Hindu Business Line : Paradip users have best connectivity deal

A port is not simply a harbour with a deep draught. Far more important is the issue of connectivity. With new road and rail projects ensuring almost dedicated connectivity between Paradip and the vital steel and iron ore producing belt, the users of Paradip port could not hope to have a better deal.

Mr Subrat Tripathy, Acting Chairman, Paradip Port Trust

"Paradip port is poised for a big leap forward. It is set to achieve a major breakthrough in cargo handling and a perceptible change in traffic both in volume and variety will be visible within the next few years. I'm very hopeful", said Mr Subrat Tripathy, Deputy Chairman of Paradip Port Trust, who has been acting Chairman for the past two years. He exuded optimism while talking to Business Line recently in Paradip.

Excerpts from the interview:

What kind of growth do you predict for Paradip port in coming years ?

In 2004-05, we crossed the 30-million tonne mark and we have a vision. Vision 50. We hope to hit the 50-million-tonne mark, at the latest by 2008-09, if not earlier, and I am confident of it.

Will the projected growth be achieved at the cost of other ports, particularly neighbouring Haldia?

The answer is both yes and no. Personally I feel that both Haldia and Paradip should play a complementary role. But, then, it is also true that the commissioning of the Paradip-Haldia crude pipeline by the Indian Oil Corporation within a year or so is likely to cause the diversion of several million tonnes of crude traffic from Haldia to Paradip port. Subsequently, when the refinery is set up, the throughput of both crude and petroleum products will virtually skyrocket.

But your present throughput of petroleum products...

Yes. Right now Paradip port does not handle any crude traffic and the throughput of petroleum products (imports) in 2004-05, at 8.39 lakh tonnes, recorded a negative growth because of improved domestic production caused by capacity expansion of IOC's Haldia refinery. But, as I told you, the scenario is set for a radical change.

So you are pinning a good deal of hope on oil traffic, aren't you?

Not really. Even if you cut out the entire oil traffic, we still have reasons to feel reassured. Frankly, I am pinning a good deal of hope on thermal coal for coastal shipments, coking coal imports and finished steel exports. Right now we are geared to handle 40 million tonnes of traffic, 50 per cent of which can be thermal coal.

Our massive mechanised coal handling facility, created at a huge investment to handle coastal shipments of thermal coal to meet the requirement of Tamil Nadu Electricity Board (TNEB), has the capacity to unload more than 20 rakes a day.

But then your thermal coal throughput in 2004-05 actually dropped vis-à-vis 2003-04.

Yes, you're right. But the drop was due to non-availability of coal for coastal shipments. It is not that the Talcher mines of Mahanadi Coalfields Ltd supplying coal for TNEB is producing less. The production has actually gone up. But the bulk of the production is being sent to the power-houses in the vicinity as per the government's present policy. I am sure the present shortfall in shipments for coastal movement is a temporary phenomenon and will pass. We have inherent strength in handling thermal coal traffic for coastal movement at a low cost, and it is difficult not to recognise our strength.

You sound bullish about the imported coking coal traffic but will not the commissioning of Dhamra port deprive you of this traffic?

True, once Dhamra port is commissioned, we will lose a few million tonnes of coking coal traffic now being imported by Tata Steel. But I am not unduly worried over it. Steel Authority of India Limited (SAIL) will continue to import through Paradip, and its requirement will steadily increase.

More important, by the time Dhamra port becomes operational, many new steel plants, now under various stages of construction in Duburi and other regions of Orissa, will start production, and their combined requirement of imported coking coal will far exceed the volume currently being imported by Tata Steel.

Remember, I am not including Posco (12 million tonnes) and Essar (six mt) projects. Once these projects are on stream, it will be a totally different scene.

Another kind of cargo that holds out promise is the export of finished steel by the new units that are coming up.

What about iron ore, which has emerged as second most important item for the port in 2004-05?

Iron ore for exports has emerged as an important item of traffic, not only for Paradip but also for several other ports. Yet, I am sceptical about it. Frankly, I would not bet on iron ore as a long-term strategy. The present boom is largely due to one buyer, China, and we do not know how long it will last.

After all, the unhappy experience of depending on the earlier sole iron ore buyer, Japan, in the past is still fresh in everybody's mind. But I must emphasise that if iron ore prices crash in the world market, Paradip will be the most preferred port for handling the exports because of its low-cost logistics and operation.

Are you afraid of competition from Dhamra port which will be a private port?

In a liberalised scenario, competition is inescapable and I'm all for it. If you ask me, I'll say that in addition to Dhamra, Orissa will need two more ports to meet the projected requirement of the industries proposed to be set up in the State. There will be enough traffic for all.

I concede that Dhamra will be a private port and, therefore, enjoy certain advantages. It will start with a substantial volume of captive traffic; it will have flexibility in operation and be able to adapt to the changing situation more quickly and perhaps, most important, it will not be under the scrutiny of TAMP.

But a port is not simply a harbour with a deep draught. Far more important is the issue of connectivity. We are now working on projects, covering both rail and road networks which, on completion, will function as virtually dedicated corridors between Paradip and the country's most important steel and iron ore producing belt. The users of Paradip could not hope to have a better deal.

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