Cochin Port trade unions call for review of licence agreement with container terminal operator

Cochin Port Joint Trade Union Forum says the public investment of ₹2,000 crore for providing basic infrastructure for the Vallarpadam container terminal (in picture) has not served its purpose.   | Photo Credit: File photo

The Cochin Port Joint Trade Union Forum, comprising trade unions of different political affiliations at the Kochi port, has called for a review of the licence agreement between the Port Trust and operator of the Vallarpadam International Container Transshipment Terminal.

In a submission made before the Union Shipping Ministry, the trade union forum said that the licence agreement of January 31, 2005, between the Board of Trustees of Cochin Port and India Gateway Terminal Private Limited (IGTPL) needed to be subjected to a “meticulous review” and suitable clauses needed to be inserted into the agreement to ensure the financial stability of the port.

The licence agreement between IGTPL and the Cochin Port Trust was different from other build-operate-transfer (BOT) agreements as there was no minimum guaranteed throughput in the agreement, the trade union said in its representation to the government.

The Cochin Port Trust ended operations of the Rajiv Gandhi Container Terminal with 1.68 lakh TEUs of throughput in 2011 when the Vallarpadam terminal was commissioned. However, the public investment of around ₹2,000 crore for providing basic infrastructure for the container terminal had not served its purpose, the unions alleged.

The investments went into providing four-lane road connectivity, a rail link between Kalamassery and the terminal on Vallarpadam island as well as dredging operations for maintaining the draft for large vessels.

Around ₹1,900 crore was invested in infrastructure and around ₹125 crore was used in capital dredging operations. However, the utilisation of these facilities has been nominal. Though the terminal can handle around 12 lakh TEUs of cargo annually, its capacity utilisation is around 50% only. The terminal handled 6.2 lakh TEUs in 2019-20 after 15 years of being in operation, the unions said.

At the same time, the terminal operator had initiated arbitration proceedings against the Cochin Port Trust alleging delay in providing four-lane road facility as part of its efforts to get the licence period extended, the trade unions alleged.

The overall utilisation of facilities such as national highway and rail connectivity was around 35% of the capacity, the unions said as they called on the government to intervene in the matter.

The unions demanded that IGTPL should be made to develop the Vallarpadam terminal as a container transshipment terminal hub as envisaged in the licence agreement, failing which termination of the agreement should be effected and the facility taken over by the Cochin Port Trust.

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Printable version | Oct 22, 2020 5:16:27 AM | https://www.thehindu.com/news/cities/Kochi/cochin-port-trade-unions-call-for-review-of-licence-agreement-with-container-terminal-operator/article32774384.ece

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