Dredging delay to stop big vessels entering India port

The deepening of the shipping channel at India's first international container trans-shipment terminal (ICTT) in Kochi, scheduled to be opened in the second week of February, has been delayed, reported The Mint.

The Vallarpadam project is crucial for lowering freight rates by allowing bigger container vessels to call at the port.

"We are making all efforts to complete the dredging work of the channel ahead of the inauguration of the terminal by the Prime Minister," said an official at the Union government-owned Cochin Port Trust who is overseeing the channel deepening work.

A spokesperson for Cochin Port said the terminal would be inaugurated in mid-February, while dredging work would continue afterwards.

Two dredging industry executives tracking the project said it would be difficult to complete the work in the next three-to-four weeks. They declined to be identified as their firms work at other Union government-run ports.

DP World, owned by the Dubai government, won a 30-year contract to build and operate the Vallarpadam terminal in a 2004 auction by offering the highest share of 33.3 percent from its annual operating revenue to Cochin Port.

A container transhipment terminal acts like a hub; smaller feeder vessels bring in cargo, which then gets loaded on to larger ships for transport to final destinations.

Larger vessels bring about economies of scale and lower the cost of operations for shipping lines, which translates into lower freight rates.

Currently, no port in India can support big container vessels due to depth restrictions. As a result, the cost of trade in and out of India has been much higher compared with Asian nations such as China or Malaysia.

The Vallarpadam terminal is being developed in three phases. The first phase, costing is designed to handle one million standard containers; the second phase, another 1.5 million standard containers; and the final phase, a further three million standard containers, taking its designed capacity to 5.5 million standard containers when fully operational.

Cochin Port was contractually bound to provide a depth of 14.5 metres to DP World to help the firm bring bigger ships. The channel deepening work, funded entirely by the government, was supposed to be completed by 31 October.

"There has been a considerable delay in completing the channel deepening work because of the peculiar site conditions," said the Cochin Port official mentioned above.

He said the channel bed is made up of a specific kind of sticky clay not found elsewhere at the port.

While 90 percent of the work was over by April last year, the remaining has taken several months as the contractor had to mobilise special equipment to overcome the problem, he added.
(Source:www.cargonewsasia.com)