L&T Kattupalli terminal looking for new operator

TE Raja Simhan Chennai | Updated on July 09, 2014

Ship berthed at L&T Kattupalli International Container Terminal,north of Chennai. BIJOY GHOSH

L&T Kattupalli International Container Terminal (KICT) is looking to rope in a terminal operator after scrapping the agreement with the existing operator, International Container Terminal Services (ICTS) of the Philippines.

Pact scrapped

The mutual termination of the agreement came after lengthy discussions, as both the companies concluded that the existing contract was not beneficial to either, according to a communication issued by ICTS to the Manila Stock Exchange.

KICT is talking to all major terminal operators. APM Terminals of Denmark has emerged the top contender. The third trial call by Maersk’s container ship today at Kattupalli has added to the speculation, sources said.

“I am not in a position to make any comment about the involvement of APM Terminals in the operation of Kattupalli. However, we regularly screen potential acquisition and development opportunities within our sector,” Brad Gordon, who heads business development for APM Terminals in the region and is responsible for new business in India, told Business Line.

If APM Terminals gets the contract, it will be the first on the East Coast. It operates in Pipavav and JNPT. It also has the advantage of having its own container freight station at Minjur, around 20 km north of the port.

The L&T group has invested over ₹2,000 crore on the container terminal located north of Chennai, adjacent to port at Ennore. It has not been fully utilised due to the issues mainly related to the Customs, reliable sources said.

‘Clustering’ issues

The issue revolves around ‘clustering’ wherein all CFSs in and around the city are linked only to Chennai port and not Kattupalli. Shippers do not have the option of ‘Inkat’ (for Kattupalli like Inmaa for Chennai) for documentation in their terminals. Shipping lines cite this as a major hurdle to shift from Chennai port, sources said.

If the issue with the Customs is not sorted out quickly, the incumbent operator will also face the same problem in operating the terminal, they said. L&T Shipbuilding Ltd has developed an integrated shipyard-cum-port.

Last year, the terminal handled 6,000 TEUs as against the initial annual capacity to handle 1.2 million TEUs.

Published on July 09, 2014

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