SANTANU SANYAL, CH. R.S. SARMA
THE HINDU BUSINESS LINE
We’re a loser, so is Haldia dock. AJEYA KALLAM, CHAIRMAN, VISAKHAPATNAM PORT TRUST
September 30, 2012:
Ajeya Kallam, a 1983-batch officer of the Indian Administrative Service, is a sad person these days. Four years ago, when he took over as the Chairman of Visakhapatnam Port Trust (VPT), he had set for himself the target of completing the projects in hand during his tenure. He is not so hopeful anymore. Multiple factors beyond his ken have created hurdles. In a free-wheeling discussion with the Business Line, Kallam explains his disappointment.
SLIDING FORM
The fiscal 2012-13, if the present trend is any indication, is unlikely to be a good year for Visakhapatnam port, which, in terms of traffic throughput, had slipped to second position among major ports two years ago after having occupied the top slot for seven successive years. In 2011-12, the throughput at 67.41 million tonnes (MT) was lower, marginally though, than 68.04 MT in 2010-11. So far in the current fiscal, the throughput has been around 29 MT, registering a drop of about 5 MT vis-à-vis the same period of the previous year.
So far, the shortfall in iron ore, as the VPT Chairman estimates, is about 3 MT and crude another 2 MT due to the flight of the liquid cargo to Paradip. Last year VPT handled about 18 MT of iron ore — about 5-6 MT for exports and another 12 MT or so for coastal movement.
“The drop in exports cannot fully explain this year’s slump in our iron ore traffic,” he says, pointing out that the coastal traffic, too, has been at a low ebb.
One reason for this is the breakdown of Essar’s pipeline network, used for transportation of the ore in slurry form from Bailadila mines in Chhattisgarh to the port for further movement by the coastal route. It is several months since the breakdown but the pipeline is yet to resume operation. The rail movement could not compensate the loss. “We’ve been hit,” he says.
The crude transhipment has shifted to Paradip port, now connected by pipeline to Indian Oil’s refineries at Haldia (West Bengal), Barauni ( Bihar) and Bongaigaon (Assam). “We’re a loser, so is Haldia dock.”
DEVELOPMENT HURDLES
As it is Visakhapatnam port’s normal cargo handling remains affected due to ongoing capacity expansion and modernisation work in several berths, including three coal berths, a fertiliser berth, a liquid cargo berth and a general cargo berth, all with private sector participation through the public-private-partnership (PPP) route. One of the berths is expected to come back to stream shortly, two others in April and another two in September and December next year and the fertiliser berth in March 2014.
Kallam is particularly upset over not being able, due to factors out of his control, to award contracts in respect of at least three new berths. One of these berths is a mechanised iron ore berth and two others are general cargo berths (WQ 7 & WQ 8).
“We could not proceed beyond RFQs (request for quotations) as the bidders are reluctant to discuss price bids,” he says. “I do not blame them entirely as they too are in difficulty due to cash flow problems caused by the downturn, aggravated by the banks pursuing a tight money policy, and in some cases their foreign partners, too, are hesitant. The iron ore situation is not promising. Also, we are wondering if we will be required to re-tender the projects, at least the two general cargo berths, which may be clubbed together to get a long quay line of 560 metres.”
LAND AND SECURITY ISSUES
The other area of concern relates to uncertainty over land policy and the security clearance. The absence of clear-cut guidelines on land policy has cost the port dear. “In PPP projects, the port offers land and waterfront and in some of the projects, it took even a year or so to get the clearance for the proposal to offer land to the prospective successful bidders,” he observes.
The issue of security clearance causes no less a headache. The proposal for dredging, to be undertaken in inner harbour at an estimated cost of Rs 300 crore, is stuck for several months as the security clearance is not becoming available. “Let there be a decision, once and for all, if the foreign dredging firms are welcome or not,” he observes. On completion of the work, the average draft in the inner harbour is to rise to 14.1 metres from the present 11metres or so.
So, is Kallam afraid of competition from new private ports, since so many of them are coming up on the eastern seaboard.
“Not at all,” is the reply. “Why should we be afraid? If the economy grows, the size of the cake will becomes larger, and there will be rooms for every one to grow. Besides, as an old landlord port, we have certain inherent advantages not available to new private ports and our customers, too, are aware of it. Precisely for this reason, we, unlike new private ports, refrain from aggressive marketing. About costs, we’re transparent. In a Government organisation everything is open. If we’re efficient, nobody can take away our traffic. The problem is that we cannot always leverage our strength to benefit the customers in way we would like to do. We cannot complete the projects in time, for whatever reasons.”
THE HINDU BUSINESS LINE
We’re a loser, so is Haldia dock. AJEYA KALLAM, CHAIRMAN, VISAKHAPATNAM PORT TRUST
September 30, 2012:
Ajeya Kallam, a 1983-batch officer of the Indian Administrative Service, is a sad person these days. Four years ago, when he took over as the Chairman of Visakhapatnam Port Trust (VPT), he had set for himself the target of completing the projects in hand during his tenure. He is not so hopeful anymore. Multiple factors beyond his ken have created hurdles. In a free-wheeling discussion with the Business Line, Kallam explains his disappointment.
SLIDING FORM
The fiscal 2012-13, if the present trend is any indication, is unlikely to be a good year for Visakhapatnam port, which, in terms of traffic throughput, had slipped to second position among major ports two years ago after having occupied the top slot for seven successive years. In 2011-12, the throughput at 67.41 million tonnes (MT) was lower, marginally though, than 68.04 MT in 2010-11. So far in the current fiscal, the throughput has been around 29 MT, registering a drop of about 5 MT vis-à-vis the same period of the previous year.
So far, the shortfall in iron ore, as the VPT Chairman estimates, is about 3 MT and crude another 2 MT due to the flight of the liquid cargo to Paradip. Last year VPT handled about 18 MT of iron ore — about 5-6 MT for exports and another 12 MT or so for coastal movement.
“The drop in exports cannot fully explain this year’s slump in our iron ore traffic,” he says, pointing out that the coastal traffic, too, has been at a low ebb.
One reason for this is the breakdown of Essar’s pipeline network, used for transportation of the ore in slurry form from Bailadila mines in Chhattisgarh to the port for further movement by the coastal route. It is several months since the breakdown but the pipeline is yet to resume operation. The rail movement could not compensate the loss. “We’ve been hit,” he says.
The crude transhipment has shifted to Paradip port, now connected by pipeline to Indian Oil’s refineries at Haldia (West Bengal), Barauni ( Bihar) and Bongaigaon (Assam). “We’re a loser, so is Haldia dock.”
DEVELOPMENT HURDLES
As it is Visakhapatnam port’s normal cargo handling remains affected due to ongoing capacity expansion and modernisation work in several berths, including three coal berths, a fertiliser berth, a liquid cargo berth and a general cargo berth, all with private sector participation through the public-private-partnership (PPP) route. One of the berths is expected to come back to stream shortly, two others in April and another two in September and December next year and the fertiliser berth in March 2014.
Kallam is particularly upset over not being able, due to factors out of his control, to award contracts in respect of at least three new berths. One of these berths is a mechanised iron ore berth and two others are general cargo berths (WQ 7 & WQ 8).
“We could not proceed beyond RFQs (request for quotations) as the bidders are reluctant to discuss price bids,” he says. “I do not blame them entirely as they too are in difficulty due to cash flow problems caused by the downturn, aggravated by the banks pursuing a tight money policy, and in some cases their foreign partners, too, are hesitant. The iron ore situation is not promising. Also, we are wondering if we will be required to re-tender the projects, at least the two general cargo berths, which may be clubbed together to get a long quay line of 560 metres.”
LAND AND SECURITY ISSUES
The other area of concern relates to uncertainty over land policy and the security clearance. The absence of clear-cut guidelines on land policy has cost the port dear. “In PPP projects, the port offers land and waterfront and in some of the projects, it took even a year or so to get the clearance for the proposal to offer land to the prospective successful bidders,” he observes.
The issue of security clearance causes no less a headache. The proposal for dredging, to be undertaken in inner harbour at an estimated cost of Rs 300 crore, is stuck for several months as the security clearance is not becoming available. “Let there be a decision, once and for all, if the foreign dredging firms are welcome or not,” he observes. On completion of the work, the average draft in the inner harbour is to rise to 14.1 metres from the present 11metres or so.
So, is Kallam afraid of competition from new private ports, since so many of them are coming up on the eastern seaboard.
“Not at all,” is the reply. “Why should we be afraid? If the economy grows, the size of the cake will becomes larger, and there will be rooms for every one to grow. Besides, as an old landlord port, we have certain inherent advantages not available to new private ports and our customers, too, are aware of it. Precisely for this reason, we, unlike new private ports, refrain from aggressive marketing. About costs, we’re transparent. In a Government organisation everything is open. If we’re efficient, nobody can take away our traffic. The problem is that we cannot always leverage our strength to benefit the customers in way we would like to do. We cannot complete the projects in time, for whatever reasons.”
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