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The Jawaharlal Nehru Port Trust (JNPT), the country's largest container port, and Mumbai Port Trust (MbPT), India's oldest, will form a special purpose vehicle (SPV) to execute a long-delayed dredging programme to deepen the common shipping channel the two facilities use, reported the Mint.
JNPT, which handles more than 60 percent of India's container traffic, is likely to hold an 87.5 percent stake and MbPT the rest.
The SPV plans to increase the depth of the shipping channel to 16.5m in two phases, against the original plan of dredging to 14m, according to JNPT chairman L. Radhakrishnan.
The cost of the project is likely to be nearly US$309.2 million, 75 percent up from JNPT's original estimate of $176.68 million.
A deeper and wider channel will allow larger ships, with a capacity of up to 6,000 TEUs, and reduce the chances of vessels hitting each other.
A collision between container vessel MSC Chitra and MV Khalijia 3 in August resulted in an oil spill and both ports being closed for more than a week.
Radhakrishnan said JNPT is in talks with the Japan International Cooperation Agency for borrowing $220.86 million to execute the project, which has been delayed for at least seven years.
"We are planning to go for a tendering process for channel dredging in parallel, while we are seeking various approvals as we want to fast-track the project," he said.
The contours of the SPV are yet to be finalised, said Rahul Asthana, chairman of MbPT. "Mumbai port owns the common channel. We have not informed the board about this decision formally," he said.
A person close to the development said a similar attempt was made in 2006, with JNPT and MbPT sharing the cost on a 7:1 basis. But then, the shipping ministry did not respond to it.
According to Radhakrishnan, the SPV will handle capital and maintenance dredging. The first refers to fresh dredging to deepen the channel, while the second is the process of maintaining it. The channel, which is about 21 km long, currently has a depth of about 10.7-11m. With the help of tides.
JNPT can handle vessels that need a depth of 12.5m.
JNPT had scrapped a contract won by dredging and marine company Van Oord in July 2009 as its bid was 20 percent more than its estimate.
Bigger ships are currently calling at ports such as Dubai, Singapore and Colombo, because the Mumbai channel is not deep enough, said a representative of a shipping line.
"A shipping channel with good depth is like a good national highway connecting a manufacturing hub," he said. "Even though it is most critical for a port, the government never fast-tracked dredging projects."
JNPT loses around $132.51 million every year because the channel is not deep enough, Mint reported, citing Sudhir Rangnekar, former chief executive officer of Sical Logistics and a director of Shipping Corp. of India.
The current common harbour channel for MbPT and JNPT needs to be upgraded, said Subash Kumar, a marine and port consultant to many Indian ports. "If MbPT and JNPT have to survive, they need to have a proper and organised shipping channel," said Kumar, a former Chennai Port Trust chairman and previously director of the Indian Maritime University. "For that, both the ports have to coordinate and cooperate to build and maintain."
(Source:http://www.cargonewsasia.com)
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