Customs set off International Container Transshipment Terminal nightmare

Kochi: An incident with far-reaching consequences happened in the early days of Vallarpadam International Container Transshipment Terminal (ICTT).

A set of export cargo of 60 containers reached ICTT from Tuticorin port in December 2011. While the boxes were being loaded on to the mother vessel, the Customs intervened and asked the shippers to offload them for inspection.

The ship offloaded the 20 containers and left the Indian shores, giving shockwaves to all the shipping lines.

Since the transshipment was done in a sanitised area at the terminal, no Customs clearance was needed, but the officials pleaded lack of clarity in the rules and ensured that their writ ran on the terminal.

The central government, which had invested more than Rs 2,000 crore in the project to make transshipment possible on Indian shores, took a serious note of it and clarified that Customs check was not warranted.

But the damage was done, says Mr C.S. Kartha, president of the Cochin Chamber of Commerce. “That made the ICTT a nightmare for shipping lines which chose to exclude it from their network. No shipping line wants to take risk in such matters.” The lack of support from the Customs also resulted in cargo and steamer agents preferring Colombo to Vallarpadam.

As per rules, exporters can claim duty drawback, a monetary incentive for exports, as soon as the ship carrying their containers leave the Indian waters.

The same facility is available for ships that leave for Vallarpadam ICTT because of the exemption from cabotage laws. “But the customs officials in other ports, who clear the papers for Colombo in no time, insist on clearing the papers for Vallarpadam only after the vessel leaves the ICTT, which could take time,” says Mr Kartha. “An exporter cannot afford to wait for long, and hence he would dump Vallarpadam for Colombo.”

Kochi Customs Commissioner Dr K.N. Raghavan said there was lack of clarity on the topic when the incident involving offloading of containers happened. “I do not have the facts right now to comment on the issue. But it lacks merit if the exporters say they keep off Vallarpadam because of something that happened in 2011.”