Coal helps Krishnapatnam port tide over iron ore export ban

T.E. Raja Simhan | Updated on: Mar 12, 2018


Privately-owned Krishnapatnam port in Andhra Pradesh is emerging as a major hub for coal handling in India. In fact, if the same handling trend continues, the port could be a major threat to Ennore port, which benefited from the diversion of coal from Chennai port due to a court ruling.

Things have dramatically changed at Krishnapatnam port in the last couple of years. The port was commissioned in July 2008 mainly to handle iron ore and coal. However, with the Supreme Court banning export of iron ore in 2010, the port concentrated more on coal and other cargo such as edible oils, fertilisers and containers.

Success evident

And, the port, located 180 km north off Chennai, has succeeded in its revised business plan.

A visit to the port reassures one of its success with coal seen all around. “We need to look at the concerns of coal users and address that in every possible way,” said Anil Yendluri, CEO, Krishnapatnam Port Company Ltd.

Consider this. In the first year (2008-09) since its inception, the port handled 8.2 million tonnes (mt) of cargo, of which iron ore traffic was 7.7 mt and coal, about 1 mt. In the second year, the port handled 16.1 mt (of which iron ore was 10.5 mt and coal, 2 mt).

In the third year, when the iron ore export ban came into effect, the port handled 15.9 mt with coal overtaking iron ore traffic. The port in that year handled 7 mt of coal, 5.5 mt of iron ore and 2.5 mt of fertilisers.

The fourth year was a tough year, said Yendluri, without iron ore. However, coal handling increased dramatically to 11.3 mt helped by the diversion from Chennai port; fertiliser handling was 2.3 mt and granite, 1 mt, he said.

Multiple cargo

“We are now equipping ourselves to handle multiple cargo,” he said. This fiscal, the port will handle 15-16 mt of coal, about 1 mt of edible oil and some fertiliser, he said.

According to Yendluri, looking at various power projects set to come up in the vicinity in the next five years, there could be a demand to handle 35.55 mt of coal beyond 2016.

“Due to uncertainty in policy, the construction of power plants slowed down,” he said.

In addition, 38 mt a year of coal will be required for steel plants in the hinterland, which source coal from Australia, Indonesia and Mozambique. To manufacture 1 mt of steel, a plant requires nearly 4 mt of raw materials, including coking coal and thermal coal, he said.

Yendluri said nearly 30 trains loaded with coal leave the port every day. The port can do up to 60 trains with doubling of railway lines to be completed in March.

The port is currently undertaking the second phase of expansion to have a total of 12 berths. In the third phase, likely to start next year, the port will construct a few more berths, and by the end of the fourth phase, the port will have a total of 42 berths, he said.

At the end of the second phase, Rs 5,400-6,000 crore will be invested in the port to handle a total of 40-45 mt of cargo. Last year, the port made a profit of Rs 70 crore on revenue of Rs 700 crore. “We are looking at 20-30 per cent increase in both cargo volume and revenue,” he said.

The port is promoted by the Hyderabad-based C.V.R. Group.

The group’s flagship company Navayuga Engineering Company Ltd is the engineering, procurement and construction contractor for Krishnapatnam port. The London-based 3i Group Plc has a minority stake in the port.

Published on December 02, 2012
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