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Chennai Port Trust’s board has suggested that the port convert the idle iron ore terminal into a buffer yard to park cars, rather than give it to Chennai Container Terminal Ltd (CCT) for use as a box terminal.
Multi-level car park The yard will have a capacity to park nearly 4,000 cars. Every week, one car carrier is expected to use the terminal, which can be used to handle other ships when idle.
The new proposal also means that the long-pending proposal of constructing a multi-level car park may be scrapped, according to sources in the board who did not want to be named.
Chennai is the number one port in handling cars. In 2012-13, it handled 2.72 lakh cars with a majority of them Hyundai’s.
The board’s proposal will be a setback to CCT, which hoped to get the iron ore terminal as agreed in the Concession Agreement signed in 2001. The iron ore berth located next to CCT has been idle for the last four years, following a Supreme Court ban on iron ore export. If CCT had converted the iron ore berth into a container terminal, it would have the country’s longest container terminal of nearly 1.2 km, with an annual handling capacity of around 1.20 million twenty foot equivalent units (TEUs). At present, CCT has a terminal length of 885 metre, with an annual capacity to handle 1.06 million TEUs.
The private terminal operator belonging to Dubai Ports first asked the port trust to give 17 hectares contiguous to its yard in the iron ore berth to develop a container yard. For which, CCT will return 22,350 square metre to the port. Later, it wanted the entire iron ore berth.
In the last 12 years, CCTL has invested around Rs 750 crore in the terminal. However, the terminal is constrained by limited backup yard space, which leads to congestion several times, CCT said.
The agreement says that if the iron ore berth is converted into a container berth, it should be handed over to CCT, which is obligated to accept and convert it into a container berth. The board has decided against this and hence there was no question of giving it to CCT.
More revenues The Board members felt that the port should look at other cargo to increase revenue. They argued that CCTL will give the same royalty of 37.128 per cent as agreed in the agreement. If an alternative cargo is identified, it can fetch more revenue to the port.
Since the port trust is pursuing container terminal project at Jawahar Dock, handing over the iron ore berth to CCTL may not help the port get more revenue.
The possible options with the port trust are to handle containers satisfying the provision of the concession agreement, liquid bulk and cars, sources said.
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