Port says sufficient grounds exist for termination of contract; Container berth operator says inadequate draft, no night navigation causing fall in throughput

After Haldia dock in West Bengal, it is now the turn of Kandla port in Gujarat. The ABG Group, which, in partnership with Singapore’s PSA, runs two container berths (11 and 12) at Kandla port, is embroiled in a dispute with Kandla Port Trust over minimum guaranteed throughput (MGT).

“We’re very unhappy with the performance of the ABG Kandla Container Terminal Ltd (ABG-KCTL, the special purpose vehicle floated by ABG-PSA combine for operating the berths, and therefore contemplating action against it,” according to Kandla Port Trust sources. The action, it was indicated, might even entail termination of contract. “The ABG-KCTL, which has been active in the port since 2005, has failed to ensure MGT for four successive years”, the sources told Business Line. “There are enough grounds for termination”.

Tiny window

A spokesman for ABG Group, when contacted, conceded that ensuring MGT was a problem at Kandla port, caused largely by two factors, namely, inadequate draft and the absence of the night navigation facility. Kandla port suffered from fluctuating draft, going up to 10 metres in high tide and dropping to around six metres or so during low tide.

“The ingress and egress of vessels is possible only during high tide and, in the absence of night navigation, we get a window of only two hours during the day time”, the spokesman observed.

As a result, ABG-KCTL was finding it difficult to handle more container ships and thus ensure MGT of 172,000 twenty-foot equivalent units (TEUs) in both the berths annually.

During initial years, the actual throughput was much higher than the stipulated MGT, only to decline subsequently.

Other worry

There is another reason. The next door Mundra port, a private port guaranteeing a draft of 18 metres, poses a huge challenge which ABG-KCTL finds it difficult to cope with. Most container vessels prefer Mundra to Kandla. Asked if ABG-KCTL was mulling withdrawal of operation, he replied that the decision had to be taken jointly by ABG and PSA.

“We’ve gone to court demanding the draft of 12.8 metres as promised by Kandla Port Trust in the concession agreement”, the ABG Group spokesman said.

The Kandla Port Trust sources, however, pointed out that the court had dismissed the petition, adding: “We’re now free to take action and we’ve kept the Union Government posted in this regard”.


(This article was published on November 2, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.