VPT’s chances of emerging as trans-shipment hub brighten

Sequel to Centre’s notification relaxing the Cabotage law

An aerial view of Visakha Container Terminal in Visakhapatnam.

Relaxation of Cabotage law to allow movement of cargo from one Indian port to another by foreign vessels, has brightened the prospects to transform Visakhapatnam into a trans-shipment hub in the Bay of Bengal and a gateway port to South East Asia.

The Ministry of Shipping issued a notification on May 21 relaxing Section 406 of the Merchant Shipping Act, 1958, for coastal movement of EXIM trans-shipment containers and empty containers.

“The request pending for a long time has been considered. We are very happy that the decision will help in trans-shipment of cargo to various international destinations, saving time of despatch and resulting in reduction in freight cost to the trade,” Visakhapatnam Port Trust Chairman M.T. Krishna Babu told

The Hindu on Tuesday.

Huge savings

By applying Cabotage law to EXIM cargo, shipping lines are forced to move containers from one port to another in India through international trans-shipment hubs of Colombo, Singapore, or Dubai. This leads to doubling of handling and of cost. Foreign trans-shipment hubs are earning revenue and enjoying a higher throughput by handling the Indian EXIM containers and empty containers. Visakha Container Terminal Private Ltd (VCTPL), BOT operator of Visakhapatnam Port Trust, which developed a state-of-the-art modern container, is overwhelmed with the decision of the Ministry of Shipping to relax the Cabotage restrictions to facilitate trans-shipping Indian cargo at Indian ports saving valuable foreign exchange.

Strategic location

“We are strategically located on the East Coast with a natural depth of 16.5m and a world-class container terminal,” VCTPL COO Sushil Mulchanadani said.

Visakhapatnam had ample scope to trans-ship containers from Haldia and Paradip to Colombo, he declared.