Chennai Port Trust (ChPT) on Friday acquired 67% stake of its subsidiary Kamarajar Port Ltd. (KPL) for ₹2,383 crore.
“This agreement comes into force with immediate effect,” said P. Raveendran, chairman, ChPT. “Our immediate focus is to utilise the existing capacity in ChPT to the maximum and carry out expansion in KPL. Our next target is to achieve cargo handling of 100 million tonnes in the coming years.”
Soon after remitting the amount, he said that both the ports would operate as different entities for the betterment of exim trade. KPL as corporate firm and ChPT as trust.
Both the ports would be in a better position to tackle competition from private players such as Adani’s Kattupalli Port and Krishnapatnam Port.
ChPT will continue to handle clean cargo such as containers, cars, liquid cargo, cruise and passenger traffic, while KPL will create additional capacity for all other types of bulk, dry and liquid cargo.
“Our combined effort will be to maximise cargo throughput. For the past few years, ChPT has been handling over 50 million tonnes of cargo, while KPL about 35 million. It will take at least two to three years to reach 100 million tonnes of cargo, due to COVID-19,” he said.
"In ChPT, we can't go in for expansion due to thick population, traffic bottleneck and Madras High Court ban on handling dusty cargoes such as coal and iron ore. KPL is already handling coal. Efforts would be made to speed up Chennai Port-Maduravoyal elevated corridor project. Rail connectivity is there for both the ports. Rail lines are being doubled at KPL," he said.
Initially, KPL was conceived as a satellite port of ChPT to handle coal for Tamil Nadu Electricity Board. It is the only major corporate port in the country and rest of 11 ports are run as trust.
It is a mini-ratna company situated about 24 kms from Chennai city. It was commissioned during 2001. The Centre had about 66.677% stake and 33.33% was with ChPT. The acquisition was done partly through internal accruals and borrowings.
Asserting that both the ports were owned by Central government, he said that KPL would continue to function as a corporate firm and ChPT as Trust. There would not be any changing in quick decision making pattern of KPL or in fixing tariffs.
"Kamarajar Port employs about 100 people and ChPT about 3,900. The utmost aim of the port is to safeguard employees interest. We will not transfer people from one port to another. KPL has outsourced some of its services. We will utilise them to tackle competition from private players," he said.
ChPT has capacity to handle 100 million tonnes of cargo, while KPL about 67 million tonnes. The latter has eight operational berths and a few are getting ready. Both the ports have deep draft of 18 metres.
Asked about the car exports, he said that they were the only ports to handle car exports from South. During 2019, KPL and ChPT handled over 3.50 lakh units and this was bound to increase with the commencement of exports by Kia Motors.
