New port in Tamil Nadu may lead to traffic imbalance in the region

Proposed port will vie for traffic with Vizhinjam and the trans-shipment terminal at Vallarpadam.

July 07, 2016 04:41 am | Updated September 18, 2016 12:12 pm IST - Mumbai

File photo

File photo

The proposed new port at Enayam near Colachel on Tamil Nadu’s west coast may not achieve the desired objectives and could create excess capacity in the region, eroding the economic viability of half a dozen ports in the vicinity, according to experts.

“Colachel port may prove to be attractive if Sethusamudram Shipping Canal Project goes ahead, which looks unlikely,” said Rohit Chaturvedi, an independent logistics expert who had previously served as Director CRISIL Risk and Infrastructure Advisory Services, and at i-maritime consultancy.

Trans-shipment potential

The plan for the new portis being developed mostly on the basis of trans-shipment potential from the Indian subcontinent and though the proposed facility is close to the main shipping routes, it will compete for traffic with the ports at Vallarpadam (operated by international player DP World) and Vizhinjam (for which the development concession has been awarded to Adani Ports and SEZ), both on the Kerala coast.

“The competition for trans-shipment traffic by Vallarpadam and Vizhinjam as well from the existing ports of Chennai and Tuticorin will be high,” Mr. Chaturvedi said.

Moreover, to protect the port facility from waves and currents, two breakwaters will be needed – one each on the south and north.The southern breakwater may be shorter than the northern breakwater.

But the total length and costs of breakwater may be very high. In addition to this dredging cost to maintain minimum 15 to16 ft draft will be costly and make the project economically unviable.

“Given the lack of traffic, very high investment (estimated at Rs.27,000 crore) and the nature of shipping economics make the economic potential for Colachel port look dim and the decision to develop a major port at Colachel rather premature,” Mr. Chaturvedi said.

Captain Vivek Singh Anand, President, Mumbai and Nhava-Sheva Ship-Agents Association and the India Head of NYK Shipping Line said the pressing need is for India to develop a cohesive strategy for the holistic development of the port sector.

“India does not have a master plan for the development of ports. It needs to be addressed before clearing any new port. Jugaad mentality will not work. The proposed port will take away business from nearby ports and make them economically unviable.

“This port will create excess capacity in the region,” Mr. Anand said. However, “considering India’s potential in the maritime sector, it may benefit in the medium- to long -term,” he added.

Colombo competition

He said if the purpose of this port is to woo trans-shipment container traffic from Colombo, it would be a challenging task.

“Cochin Port has been there for a long time but it has not succeeded in attracting traffic from Colombo. It is almost in the same channel. Colombo is attracting traffic because port cost is far

less and India cannot match it,” he said.

Hinterland connectivity

“Yes ports are required. But we cannot have 97 big ports on a coast line of 7,517 kms. Hinterland connectivity is much more important than just putting up a port,”Mr. Anand said.

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