Kochi port authorities have said that interpreting transhipment containers as domestic cargo would be a huge disincentive to shipping lines, which operate both mainline mother vessels and feeder vessels.

Reacting to calls from various quarters, including trade unions, not to amend Indian Cabotage law to permit foreign flag vessel to service coastal cargo, the Port authorities said on Friday that transshipment containers coming from foreign countries and bound for other ports in India, and containers originating in other Indian Ports and transshipped at Kochi on their way to foreign countries, cannot be treated as domestic cargo within the meaning of Cabotage law.

The call for amendments to Cabotage law came up in the context of the imminent commissioning of International Container Transshipment Terminal (ICTT) on Vallarpadam island.

The Port authorities said that since ICTT was located within the Special Economic Zone area, containers transshipped through Vallarpadam would undergo Customs checks only at the Indian ports of origin or at the ports of their destination.

The Port authorities said that if a consignment of containers bound for Kandla from a foreign country was transshipped at Vallarpadam, the entire journey of the consignment between the foreign country and Kandla had to be treated as one international movement.

The Port authorities also said that the concession agreement with the promoters of the Vallarpadam project had made provisions to ensure that tariffs and other conditions at Vallarpadam would be competitive with those existing in other international ports like Colombo and Singapore in the region.

The Port authorities rebutted claims that Colombo was the best suited port for transshipment.

They said that Kochi was situated closest to the international shipping routes and that the ICTT was developed as an international transshipment terminal.

The port authorities warned that if ICTT was not in a position to compete with Colombo it would be relegated to the status of any other container terminal in India without fulfilling its dreams of becoming a transshipment terminal.

India's maritime business stood to gain immensely because if transshipment of containers is avoided in neighbouring ports, each TEU of containers would save at least 300 US dollars and seven to eight days in transit time.

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