Anticipating an increase in trans-shipment operations at the Cochin port, following the economic and political turmoil in Sri Lanka and reports of congestion at Colombo port, the Shipping, Ports and Waterways Ministry will take up a ₹300-crore dredging project to increase the port’s draft depth to 18 metre that will help dock larger ships, a senior official of the ministry told BusinessLine.

Cochin Port’s International Container Trans-Shipment Terminal (ICTT), operated by DP World, has a 14.5 metre draft. At the moment, the terminal is capable of handling only post panamax ships, but after the dredging operation it would be able to handle larger ships.

According to the official, the project will be done under the Sagarmala programme and will hopefully be completed in a year or so. In all probability, this dredging work will be considered as a grant, the official added.

“Currently the port’s container terminal has a capacity of 2 million TEU (20-foot equivalent units) and around 40 per cent of it is being used. The ultimate capacity is to grow to 3 TEUs,” he said.

Cargo handled

According to the statistics available with the ministry, Cochin port’s trans-shipment volume at the ICTT increased to 13,609 TEUs in March 2022 compared to 8,394 TEUs in March 2021, up by over 60 per cent.

In FY22, cargo traffic across India’s major ports rose by 6.94 per cent to 719.38 million tonnes (mt). Cochin Port featured among the five major ports which achieved “the highest traffic till date”. Cargo handled there was up by 9.68 per cent y-o-y in 2021-22.

Concession charges revised

Colombo is a regional trans-shipment hub. As the economic crisis in Sri Lanka ballooned, many cargo operators wanted to avoid Colombo and divert their vessels to Cochin, said officials. But since these were ad-hoc calls, most could not take advantage of the concession scheme offered at the Cochin port.

Accordingly, a new cargo-based discount scheme was approved by the Cochin Port Authority, effective May 1 (valid for three years). This replaced the previous call-based discount scheme and is seen as an effort to lure some cargo away from Colombo and boost container trans-shipment. “The dredging project, coupled with the new discount suited to the current situation, will hopefully attract more trans-shipments to the Cochin port,” the official said.

Under the new scheme, mainline vessels are offered a discount of 60 per cent in vessel related charges (VRCs) for bringing 251-500 TEUs per trip; 75 per cent discount for 501–750 TEUs; 80 per cent discount for 751-900 TEUs and 85 per cent discount for bringing in above 900 TEUs.

Mainline and feeder vessels will be granted a concession in handling export-import (EXIM) trans-shipment containers per voyage. Concession rates are fixed between 5 and 10 per cent depending on the cargo volume per call, which in turn varies between 51 TEUs and above 500 TEUs.

Similarly, mainline container vessels from the US/East Coast will be given a concession of 100 per cent on VRC for one year from the commencement of service, irrespective of the volume they carry. Feeder vessels to and from Bangladesh will get a flat 80 per cent rebate in VRCs for one year irrespective of the volume call.