Kochi Port seeks Ministry's aid for dredging cost at Vallarpadam

V. Sajeev Kumar Kochi | Updated on November 12, 2017 Published on May 23, 2011

Dredging in progress for the International Container Transhipment Terminal, in Kochi (file photo): H. Vibhu   -  Business Line

The Kochi Port has sought a financial assistance from the Shipping Ministry to meet the maintenance dredging expenditure incurred on deepening and widening the channel for facilitating container operations at ICTT at Vallarpadam and an additional financial outgo to maintain the channel at 14.5 metre draught.

A special meeting convened by the Board of Trustees has accorded sanction to the Port Trust Chairman to proceed in this regard.

In a letter to the Shipping Secretary, the Port Trust Chairman, Mr Paul Antony, requested a grant of Rs 399.50 crore being the cost of maintenance dredging for the next three years and Rs 80 crore being the cost of additional maintenance dredging for removal of the quantity of 11.5 million cubic metres.

This, he said, will help the port to overcome the cash deficit of Rs 342.82 crore expected during the next three years and help to competitively fix the tariff at ICTT and in other port operations so as to harness in full the intended benefits of the investments in ICTT.

Besides, the maintenance of adequate draught is also required for the smooth operations of the Cochin Shipyard and BPCL, which is expanding its capacity further to 15 million tones per annum. Hence, these channels should be treated as national assets and the expenditure incurred thereon should be offloaded from the shoulders of the port, Mr Antony said.

Coastal conditions

According to the Chairman, the maintenance dredging requires to be done throughout the year, which is a consequence of the morphological conditions of the coast. The region experiences the high monsoon period activity resulting in heavy siltation during the entire period of monsoon. Given the situation, the amount incurred by the port every year in maintaining the channels forms a major part of its expenditure.

He pointed out that the dredging cost has increased substantially from 2008-09 and is expected to increase further in the coming years, since the port is contractually obligated to provide a draught of 14.5 metres at ICTT. The dredging expenses had increased in the last 10 years from Rs 29.21crore in 2000-01 to Rs 75crore in 2010-11.

Maintenance dredging cost

The major components of the operating expenditure of the port are maintenance dredging cost (27 per cent) and employee cost (40 per cent). The port has witnessed an alarming increase in the maintenance dredging cost due to increase in dredging quantity, while the increase in employee cost is due to the implementation of wage revision settlement.

The cash flow statement showed that the port has a cash deficit from 2008-09 and the situation is expected to continue till 2014-15. In these circumstances, the port is unable to meet the maintenance dredging expenses on its own. Fully loading the dredging costs in the port tariff will make the rates unattractive vis a vis competing locations, he added.

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Published on May 23, 2011
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