Cabotage hangs on Vallarpadam international container transhipment terminal

The central government granted the exemption which allows vessels carrying the flag of a foreign nation to bring cargo from another Indian port to Vallarpadam and to take the same back to the ports.

The provision was expected to help the transhipment terminal, which was built to take cargo from smaller vessels and load on to mother vessels that ply between major ports and vice versa.

“Shipping lines plan their networks keeping at least a decade in advance,” said sources familiar with the happenings at ICTT. “Even a three-year relaxation is not enough to persuade them to include a port in their plans. Uncertainty over the issue has already hurt the terminal.” The state government should push for the extension at the earliest, they said.

The sources, however, said the terminal has been unable to make use of the relaxation to the maximum as regulatory issues choked its operations. Vallarpadam terminal was planned to attract transhipment cargo from the other Indian ports, which at present use the Colombo, Dubai and Singapore ports. “However, the failure of the government agencies, especially that of the Customs authorities in other Indian ports, in allowing foreign ships to carry cargo to Vallarpadam has failed the very purpose of it. As a result, the transhipment cargo the terminal handled was just about 10 per cent of the total business.”

Meanwhile, the Cochin Chamber of Commerce and Industry has asked the central government to extend validity of cabotage relaxation. “An international transhipment terminal needs to be given more breathing time to attain its full capacity,” it said in a statement here.