The worst seems to be over for Cochin Port Trust after making a turnaround in FY18, braving the rough weather in the two previous consecutive fiscals. By making a profit of ₹13.5 crore, the port has broken the 10-year jinx. BPCL Kochi refinery’s expansion, increased capacity utilisation of Petronet LNG Terminal, rise in coastal shipments and, above all, the GST implementation were the main factors that drove this growth both in terms of financials as well as cargo movement.

Port Trust Chairman AV Ramana is confident of sailing forward as he eyes the benefits to be derived from the cabotage relaxation that would ensure a steady cargo flow, especially with the global shipping business showing a resurgence. Excerpts:

Are tough days over for Cochin Port Trust in terms of operational and financial performance? In which segment are you seeing the maximum traction?

Tough days are over and future years are very bright. We expect our captive volume cargo like POL, LNG and cement to definitely go up. Apart from this, the variable segments like containers, dry bulk, bunker volumes are expected to improve.

The container segment is expected to grow 6.2 lakh TEUs in the current fiscal and the coastal cargo would touch 10 lakh million tonnes. The cement segment with addition of Penna Cements will grow from 8 lakh to 11 lakh million tonnes. In the coming years, Malabar Cements will start its operation which will give an additional throughput of 3 lakh million tonnes.

The port is expecting a definite growth path in cruise business too. This fiscal, we expect 50 cruise ships which will carry 65,000 passengers in total.

Have you been able to get a fix on your dredging activity?

Yes. We are able to reduce our maintenance dredging charges to ₹88 crore from ₹120 crore this year through competitive tendering and adopting the nautical depth concept for the work. The monthly spend on dredging has come down to ₹7.56 crore from ₹10 crore.

Have you reached a stage to revisit your outer harbour plans?

We have temporarily shelved the project because there was no takers due to its non-viability. The estimated investment was to the tune of ₹3,050 crore and nobody — especially the targeted export-oriented oil refineries having up liquid trading hubs — evinced interest in the project.

The Indian Navy, the co-partner of the project, also gave up the idea of developing a breakwater for setting up their base for forward movements. The Navy is understood to have zeroed in oon the upcoming Vizhinjam port, which is more strategically located than Kochi.

Is the revenue share you get from ICTT neutralising the revenue foregone on offering discounts in vessel related charges and dredging?

It is neutralised now. We are crossing the break-even with an average ₹8 crore per month the revenue share from India Gateway Terminal which means a yearly pay of ₹96 crore. We cannot attract ships, unless there is vessel related discounts.

How are you managing the pension liabilities?

At present, the port is having a pension fund of ₹150 crore. This year, we are targeting an addition of ₹250 crore, taking the pension fund to ₹400 crore. The monthly liability of pension is ₹18.56 crore, which we are contributing from our operating income. Every month, we are transferring ₹3.75 crore in addition to the pension corpus. We are in the process of leasing out 56 acres of land at South End reclamation in Willingdon Island through e-tendering process, the proceeds of which will be diverted to the pension fund.

How do you view cabotage relaxation vis a vis Cochin Port Trust?

Right now, the transshipment business is only six per cent of the total container volumes and the easing of cabotage restrictions is expected to improve it. The port is looking at a growth of 12 per cent this year. Transshipment becomes successful only when there is connectivity up to the US coast from Kochi as most of our exports are to US and Europe. We are looking at a new liner service to the US that would help the exim trade and also increase the transshipment volumes.

Has the GST affected bunker volumes in Kochi? How the terminal is performing now?

The port doesn’t have any bunker terminal. We have dedicated Q4 berth at Mattanchery Wharf for bunkering purpose. A bunkering barge jetty at Puthuvypeen is almost ready. The port being at a distance of just 11 nautical miles from the international sea route of Gulf to Singapore is naturally blessed with the potential of a bunkering point.

Prior to introduction of GST, a VAT @ 0.5 per cent flat was being imposed on bunkering both for foreign going vessels and coastal vessels. But the introduction of GST @ 18 had an adverse effect on bunker volumes.

However, the government had reduced the rate to five per cent following the representations by PSU oil companies and the port. Though it had a positive impact in the beginning, further growth is not comfortable. There is a need to reduce the GST applicable to foreign vessels from five to 0.5 per cent. Efforts are on the way.

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