Logistics

JNPT nervous as dedicated freight corridor runs behind schedule

Our Bureau Mumbai | Updated on February 27, 2020 Published on February 27, 2020

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Project reaching Mundra first could hit its growth prospects, says major port

A potential delay of at least two years in getting connected to the game-changing and keenly awaited Dedicated Freight Corridor (DFC) is making state-owned Jawaharlal Nehru Port Trust (JNPT), India’s busiest container gateway, jittery.

JNPT Chairman Sanjay Sethi admitted that the DFC connectivity is “behind schedule”, which could adversely affect its growth prospects. “Probably, two years from now, we should be having DFC operational,” he said at a media conference on Thursday.

“We have been pushing for it because if it goes to Mundra port first, obviously, we are affected in an adverse way. That’s a fact. So, we have been making a noise everywhere, wherever possible, to expedite it,” he added.

The 1,500-km-long western DFC linking Dadri in Uttar Pradesh with JNPT has now been extended to Mundra, which is expected to be linked to the freight-only, high-speed corridor by this December.

“From the government’s point of view, obviously, if that (Mundra) comes first, they will do that first. From JNPT’s point of view, the original project was meant for JNPT. From the economy’s point of view, it is not like a private or a non-major port doesn’t contribute; they contribute equally. We have nothing about that. But, as a separate entity, we also compete with private ports at some level…please expedite this so that we start to benefit from it as early as possible,” Sethi said.

Cargo diversion

Port sources said that “DFC is the biggest threat to JNPT if it gets late” due to the potential to divert container cargo to rival ports on the western coast. Sethi said container vessels have skipped some services at JNPT as a fallout of the cornavirus outbreak and the new global rule for ships to use low-sulphur fuel oil.

Gateway Terminals India (GTI), one of the five terminals operating at JNPT, has reported four skips already — vessels that were supposed to come did not do so. It expects some more vessel skips in the coming months as ships are undergoing scrubber re-fitments to comply with the rule on using low-sulphur fuel oil, he said.

These issues could hurt JNPT’s ability to handle more containers this year than FY19. The port handled 4.205 million TEUs between April 2019 and January 2020, compared to 4.248 million TEUs during the same period in FY19. For the full FY19, JNPT handled 5.133 million TEUs.

“Only after another three weeks or so, I should be in a better position to assess the overall impact. Right now, we are saying at least we will be able to do the same as last year. I’m making a conservative comment. These two or three issues are completely out-of-control things. At this stage, definitely, there will be some impact is what we foresee. But, mostly, it would be made up in the next two or three months,” Sethi added.

Published on February 27, 2020
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