Kochi: Regulatory issues, high port handling charges and insufficient draft at the channel have resulted in the Vallarpadam international container transshipment terminal (ICTT) failing to achieve its potential, according to DP World.
The port operator, however, said the company is bullish on the future of India’s first and only such facility.
“The ICTT has connectivity, cabotage exemption and competitive rates, but faced regulatory issues, lack of ease in business, high port handling charges compared with Colombo and low draft,” Capt Anil Singh, senior vice-president and managing director of Dubai Port World Subcontinent told reporters here.
Referring to an incident when Customs authorities forced a ship to unload containers meant for a foreign destination in 2012, Capt Singh indicated that the issue persisted even now.
Shipping lines establish their network with a long term view, taking all such factors into account, he pointed out. He said the transshipment charges at Vallarpadam are competitive when compared with those in Colombo, the nearest competitor, but the other costs in Kochi are too high. “While the Colombo port charges $15,000 for berthing, its as high as $80,000 in Kochi.”
The draft at Kochi has also been a limiting factor for Vallarpadam. “The ships are becoming larger and we will have to upgrade the facilities to remain competitive,” he said. Firmly indicating that DP World wants the Cochin port to increase the draft though the concession agreement was only for 14.5 meters, he said, “we cannot get stuck with agreements.”
DP World is very optimistic on the future prospects of the ICTT, he said. “There are no low-hanging fruits in port business and we are very patient and optimistic about Vallarpadam,” he said.
Capt Singh parried questions related to Vizhinjam saying he was not fully aware of the facts. It may be remembered that DP World had dragged the Cochin Port Trust for the business loss it suffered at Vallarpadam due to what it said the failures on the part the port to meet its commitments such as four-lane connectivity.
The Vallarpadam ICTT last year handled 3.67 lakh TEUs, marginally up from the previous year, against an original target of 1 million TEUs.
