Barge handling facilities need to be upgraded to support transloading operations at Kandla Port, says B. K. Mansukhani

Shipping minister Gadkari honours 40 top port users, announces bonanza of development projects for Kandla, Gujarat
June 6, 2016

Barge handling facilities need to be upgraded to support transloading operations at Kandla Port, says B. K. Mansukhani

In a communiqué addressed to the management of Kandla Port, and also marked to the Ministry of Shipping in New Delhi, Mr B. K. Mansukhani of Rishi Shipping, one of the leading shipping and logistics industry players in the region, has lamented the fact that transloading operations at Kandla Port are suffering due to the lack of efficient barging facilities for unloading barges from Capesize vessels. Kandla Port has granted licences for the use of ten floating cranes in its waters and is getting a revenue share of Rs 23-25 per mt of cargo discharged by the cranes. In 2014-15, the Port handled 30 million tonnes dry cargo, of which 5 million tonnes were discharged at outer anchorage by floating cranes, with the Port receiving a revenue share of Rs 10 crore, he pointed out.

He highlighted that Mr Nitin Gadkari, Union Minister for Road Transport, Highways and Shipping, has been stressing on taking steps to check the slide in profitability of state-owned ports. The Minister had said that the Major Ports have been drifting aimlessly as new private ports, which are fitter and leaner, chip away at the cargo market share once commanded by the government-owned facilities. He also said that over the last decade, the dozen ports have witnessed a gradual decline in profitability due to a combination of low volume growth, cost escalations and loss of market share to more productive and competitive private ports that have emerged as a result of liberalisation.

Mr Gadkari had also pointed out that volume growth at Major Ports during the past five years has been in single digits, ranging from 2 to 5 per cent a year, while the non-major ports have been growing in double digits—15 per cent a year—during the same period.

Mr Mansukhani further explained it thus:

“We brought concept of handling oversize vessels at anchorage by using floating cranes and barges. Our cost-effective marketing brought cargo volume of 5 million tonnes during 2014-15 and the Port earned revenue share of Rs 10 crore and made a profit. But, regret, there has been absolutely no cooperation from Port authority. In five years, the Port could not upgrade barge handling facility. Work was allotted to contractors but was left incomplete for reasons best known to the Port. The fact is that the Port could not build barge-handling jetties in five years, while the Adani Group built a world class terminal in two years and made it operational.

“Kandla Port spent for the construction of three barge jetties in Tuna, but has yet not arranged for dredging as it costs Rs 34 crore which the Port is not ready to bear. The Port should have calculated the cost of dredging before developing road connectivity and constructing jetties. Everything was done, the amount was spent, but the project was dropped due to the high cost of dredging. Kandla Port spent more than Rs 25 crore for upgradation of Bunder Basin but, in three years, despite spending a huge amount of money, could not make the project successful. If one checks the records of cargo handled at Bunder Basin after spending Rs 25 crore, one finds that the volume is not even half a million tonnes while the Port handles five million tonnes at outer anchorage. Loaded barges are waiting for the opportunity to unload at the Port berths. Therefore, importers are suffering and we dare not do marketing for more volume since there is no handling capability.

“The Port had made an attempt to adopt the PPP model for Bunder Basin and Tuna barge jetty, but there were no takers because of the monopolistic terms. If the Port spends on the construction of barge jetties, it would get only wharfage and rental charges from storage as per port tariff, but if PPP operator spends on construction of berths, reclamation of marshy land and asphalting the plots, the user has to pay six times rental charges and revenue share earned from handling barges, waterfront charges, etc. Which user will pay PPP model operator six times charges for unloading barges in PPP model barge jetties when Port is providing same facility at Port tariff rates? Therefore, there was no taker for the PPP model. And the Port has failed to create the facility of barge jetties.

“Kandla Port can develop barge jetties on PPP model if it liberalises the terms as under:-

1) TAMP may notify cargo handling charges for full operation, i.e. stevedoring from vessel, unloading at anchorage and stevedoring of barges on barge jetties, transportation to back-up area, storage and delivery to trucks/wagons like other PPP model berths, and charge highest revenue share.

2) Operator may construct cement jetties or floating jetties as required.

3) Capital and maintenance dredging would be the responsibility of terminal operator.

4) Port will provide only road and rail connectivity.

5) Operator will spend on reclamation of the marshy land and for using kaccha or cemented plots. Port to charge 50 per cent rental charges received by operator from users as per rates fixed by TAMP. Since Port is getting 50 per cent revenue of total rental charges earned, it should not charge any extra rental charges for marshy land.

6) Port will charge revenue share from cargo handling, berth hire charges, etc.

7) Importers/exporters will hire barges from owners direct without involving operator.

“These terms would encourage many users to invest in construction of barge jetties or floating jetties. Kandla Port can call expression of interest for barge jetties at Bunder Basin, Tuna Barge Jetty, idle area near Berth 16, Khari Rohar, etc.

“I request you to expedite upgradation of barge jetties from Port funds and simultaneously provide waterfront to PPP model operators to create more facilities to handle barges on PPP model. This will support the government plan to increase coastal movement.”

Source: Exim News ServiceGandhidham, Sept. 23

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