Logistics

Kamarajar Port deal will help in competing with private ports, says Chennai Port Trust Chairman

P Manoj MUMBAI | Updated on March 27, 2020

A view of the Kamarajar Port B_JOTHI RAMALINGAM

Combined entity will be able to face the market challenges posed by the competing facilities

The synergy arising from the acquisition of Kamarajar Port Ltd would help in effectively tackling “competition and possible diversion of cargo to private and non-major ports” in the region, P Raveendran, Chairman, Chennai Port Trust has said.

“As both the entities have excellent road and rail connectivity, we will take on competition from private ports in the vicinity and increase the combined cargo volumes,” he told BusinessLine in a telephone interview.

“The acquisition of Kamarajar Port Limited by Chennai Port Trust will enable both entities to use their strengths and result in investment and operational synergy, thereby creating value to the trade/customers,” Raveendran said Chennai Port bought the Central government’s 67 per cent in Kamarajar Port for Rs 2,383 crore.

“The combined entity will be able to face the market challenges posed by the competing facilities which have come up in the last 10 to 15 years. While Chennai Port Trust will concentrate more on clean cargo like container, cars, liquid cargo, cruise and passenger traffic and on utilisation of the existing capacity to the maximum extent, Kamarajar Port will plan and create additional capacity for bulk and all other types of cargo which will result in avoiding duplication of capacity creation and also in effective utilisation of available capacity,” he stated.

Chennai Port Trust and Kamarajar Port Limited can exchange manpower, operational sources, expertise, facilities, etc., resulting in optimum utilisation of resources. The Government of India would continue to retain its controlling interest in Kamarajar Port Limited since Chennai Port Trust itself is under the administrative control and supervision of Ministry of Shipping, he said.

Kamarajar Port was conceived by Chennai Port as a satellite Port for shifting bulk cargo since Chennai Port was located in the heart of the city with heavy population and heavy traffic around.

“The idea was further expansion of Chennai Port was limited as it was land-locked and being in the heart of the city, it may not be feasible to handle cargo which are bulk in nature. This was the reason why we built it so that coal and iron ore should shift there but it has become a separate entity due to whatever reasons,” he noted.

“Later, many non-major ports sprung up in the region which have started giving lot of competition. There were also consolidation taking place. Then, for both the ports, it is not worth while fighting with each other. Rather, they should use the synergy, whatever strengths are there being under government control to complement each other. That was the idea basically and it is natural also because it is an offshoot of Chennai Port Trust,” he said.

Raveendran said that there will be no change in the structure of the company; whatever advantage the company has, will continue to be there.

Kamarajar Port will remain as a company with the same structure and the same decision-making powers. The board of KPL was appointed by the GoI. In future also it will be appointed by the government but through Chennai Port Trust, he said.

“There is no change, there should be no fear on that. Otherwise, there are lot of advantages in both the entities and customers will get benefitted. We will also be able to give good competition to private ports, so trade will be benefitted,” he asserted.

The listing of Kamarajar Port will take time. “It will not happen immediately. We will have to bring more and more value, throughput should go up so that it becomes attractive to investors,” he added.

Published on March 27, 2020

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