Ennore Port Ltd got a new Chairman, M.A. Bhaskarachar, about a month back. And the past month’s experience has convinced him he has to take steps to make the port more attractive for customers.
He is gearing up the port machinery to award contracts for half a dozen major projects in 2013-14. These include, among others, the Rs 4,300-crore LNG project and the container terminal project.
While challenges are many, including competition from private ports such as Katupalli and Krishnapatnam, Bhaskarachar is confident that, in the long run, Ennore port will do well, given its location advantage and better rail and road connectivity.
Also, being a corporate port, it is outside the purview of the Tariff Authority for Major Ports and therefore can decide its own tariffs. “This port has great potential. We need to have the right strategy to attract customers,” he told Business Line recently.
In November, Ennore port announced a 20 per cent rebate across the board. “To my knowledge no other port has given such a rebate so far,” said Bhaskarachar, who was Deputy Chairman of the Kandla Port Trust for four years before heading the Ennore port.
By June this year, the entire port, including the approach channel and turning circle, will have a draft of 18 metres to handle big vessels. “This is going to be a major advantage for us,” he said.
The immediate short-term task the new Chairman of Ennore port wants to take up is to improve the utilisation of various berths and increase the port’s capacity to handle cargoes other than coal.
The most important long-term projects include construction of the LNG and container terminals.
These two projects are critical for the port’s future as they have the potential to draw considerable revenue, he said. “We also want to become a major port for handling automobiles,” he said. Last year, the port handled over one lakh cars, mostly for Nissan.
One berth, given to Coffee Day Sical Logistics on a long-term operation lease, is lying idle. This berth was meant for handling iron ore. However, the ban on export of the mineral a couple of years ago dealt a severe blow to this terminal, built at a cost of over Rs 300 crore in 2008.
The port has asked the company to look for alternative cargo. The Union Government has also given its consent for a change in cargo. However, the company wants to handle coal, which may not be possible as there is a competing facility for handling coal. “We will strictly go by the licence agreement signed with the company,” he said.
Bhaskarachar said that out of the six berths, one is completely idle. The average berth utilisation is 65 per cent. “We need to increase this substantially as we cannot allow the assets to go unutilised,” he said.
The port has embarked on a major capacity addition. This includes building a couple of berths for the Tamil Nadu Electricity Board (TNEB) to handle coal. The shift of coal handling from Chennai port to Ennore has come as a boon for the latter, which is enjoying a ‘bull run’ in cargo handling, especially coal.
Shift in Cargo
Thanks to the shift in cargo, Ennore port showed the highest growth in cargo handling for the nine month ending December 2012. When other ports struggled with no growth, Ennore port notched up 18 per cent growth.
This was mainly due to coal handling, which increased by nearly seven per cent to 9.5 million tonnes.
The TNEB had indicated that in the next two to three years the coal handling for its plants through Ennore would more than double to nearly 35 million tonnes. “We have chalked out plans to meet such a huge demand,” he said. Last year, the port handled nearly 12 million tonnes of coal, including coal for private parties. Coal is the most important cargo for the port, he said.
The port is planning to build an additional berth at a cost of nearly Rs 150 crore, he said.
According to Bhaskarachar, the port also plans to build a multi-purpose berth at a cost of Rs 150 crore to handle various cargoes, including cars. “Three more automobile companies have approached us to use the port for car exports. However, their demand was to construct an additional berth to handle cars so that the ships need not wait when the other berth is busy. “We are working on this project,” he said.
The port also wants to handle containers in a small way at its general cargo berth. In the absence of container handling equipment, the port wants customers to bring container ships with self-loaders and use the port facility. This could be useful to handle small feeder vessels, he said.
The port plans to raise Rs 1,000 crore through issue of bonds. This is expected to be completed in a month, he said. “We are just waiting for clearance from the Centre.”