Logistics

Transshipment hub planned in Andaman and Nicobar Islands

TE Raja Simhan Chennai | Updated on July 03, 2019 Published on July 03, 2019

Terminal expected to provide alternative to ports in Colombo and Singapore

The Andaman and Nicobar Islands Administration plans to develop a container transshipment terminal with the Free Trade Warehousing Zone in South Bay, Great Nicobar Island, to provide Indian shippers an alternative to the Colombo, Singapore and Port Klang (Malaysia) transshipment ports.

The Port Management Board, Andaman and Nicobar Islands, has called for an Expression of Interest (EoI) from global players to participate in the terminal development under the private-public-partnership mode. The developers need to design, finance, construct, operate and maintain the container terminal for 30 years.

An official of a leading container terminal said that it would cost over $1 billion to build a transshipment terminal. The Great Nicobar Island has a natural depth of over 20 m to handle large ships.

The proposed terminal could distribute cargo to the region, including the East coast of India and neighbouring countries; provide services for repositioning of empty containers, handle local cargo; and operate as a logistics hub, said the EoI.

Indian ports do not have adequate infrastructure to attract large ‘mother’ container vessels of over 15,000 Twenty-Foot Equivalent Units (TEUs) capacity. The transshipment terminal at Great Nicobar could be critical for India’s trade, especially in the South, which annually loses around ₹1,500 crore transporting cargo via feeder vessels to transshipment hubs such as Colombo, Singapore and Port Klang.

Anil Devli, CEO, Indian National Shipowners’ Association, said that Andaman and Nicobar Islands are placed at a competitive distance — as compared to Colombo — from various ports in the region such as Kolkata, Chennai, and Mongla.

This will be weighed in with the cost of deviation for vessels on the East-West route to call Port Blair, which on the face of it does not seem like a big deviation. Devli said: “If the right legal environment is created, it would not be difficult for the operator to attract mainline shipping companies to begin making calls at the port. Feeder services will follow and there can be transhipment hub, ship repair facilities, bunkering, and surveying within a few years.”

CR Raghavendra, Vice-Chairman (container sector), Chennai and Ennore Steamer Agents Association, said that for the project to succeed, a container major terminal operator and a large global shipping line should come together. There is no use in searching for small shipping lines.

A transshipment terminal at the Nicobar Islands may look attractive as the deviation time for the shipping line on the East-West Route will be less than an hour, while it is four hours to Kochi and eight hours to Thoothukudi. However, with the Vallarpadam and Vizhinjam ports in Kerala being developed as transshipment ports, and a plan to develop another at Enayam in the Kanyakumari district, the question is whether there will be enough cargo to support four such ports.

Published on July 03, 2019

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