With the Shipping Ministry going ahead with its plan to further deepen the channel for Vallarpadam terminal to accommodate large ships, Elamaram Kareem, the Parliament member from the State has urged the Centre to provide necessary budgetary allocation for the dredging works to avoid a financial crisis for Cochin Port.

In a letter to the Shipping Minister, Kareem pointed out that Cochin Port has been struggling with a severe financial crisis for the reasons derived from the project such as underperforming of the terminal, under-utlisation of the facility provided with huge public investment, and annual recurring expenditure for maintaining the navigation channel by Cochin Port since the terminal was commissioned in 2011.

As per the license agreement, he said the port is liable to provide the draft required for 14.5 metre draft vessels. It is noteworthy that capital dredging is a one-time expenditure only whereas maintaining the draft depth is an annual recurring expenditure. If this additional liability comes to around ₹100 crore, the port will be pushed into a financial crisis, he said.

Moreover, the port has granted a concession for vessel-related charges to an average of ₹60 crore annually to woo ships from Colombo and neighbouring ports.

Despite all these sacrifices, the container growth rate is organic and the revenue to the port does not match the expenses incurred, Kareem said, adding that the terminal never had performed as a transshipment facility as 80 to 85 per cent of containers handled in Vallarpadam terminal is coastal cargoes.