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VPT sees sharks in the bay

Santanu Sanyal

WITH SEVERAL new private sector ports proposed along the east coast, the Visakhapatnam port feels threatened. This is because the emergence of more bulk-handling ports in close proximity will intensify competition, possibly unhea lthy too. Each port will try to grab the share of traffic to be generated virtually from the same hinterland, lending rate wars and sharp practices.

``The threat is real,'' says Mr. S. R. Rao, Chairman of the Visakhapatnam Port Trust. ``We must cut down on our costs and improve productivity,'' he adds. But it is easier said than done.

Cocanada Port Company Pvt Ltd, a special purpose vehicle of International Seaports Pte Ltd (ISPL), the joint venture of India's Larsen & Toubro, America's SSA Asia Inc, and Thailand's Precious Shipping Public Co Ltd, have been assigned the task of ``oper ating, maintaining, sharing and transferring the three existing berths of Kakinada port''. The new company recently handled a 42,000-DWT coal ship, recording an average daily discharge of about 25,000 tonnes -- a very high figure by Indian port standar ds.

The VPT Chairman does not seem perturbed over Cocanada. The evacuation facility at the Kakinada port is unsatisfactory because of the poor rail link. ``I will not be surprised if some quantities of coal discharged from the ship at a speed are still left in the port premises,'' he observes. However, it is believed that Cocanada Port Company can overcome the railway problem and turn the situation to its favour soon.

The VPT Chairman feels threatened by a `next-door' rival, Gangavaram, and Dhamra, near the Paradip port in Orissa. Disapproving development of the Gangavaram port, Mr. Rao says, ``Nowhere in the world, will you find a new port coming up within 10 km of a n existing major port.'' He is also upset that the VPT's proposal to develop Gangavaram into a major port in partnership with the Andhra Pradesh Government failed.

But some of the present problems may be the VPT's own making. Originally, Gangavaram was to be the captive port of the Vizag steel plant. But VPT thwarted the proposal as it did not want to lose the steel plant's cargo. It offered its berths for the excl usive use of the steel plant. The steel plant, too, saw the advantage in this arrangement vis-a-vis the high cost of constructing a captive port.

The Andhra Pradesh Government's attempt to develop Gangavaram as a minor port did not succeed. The Government then hit upon the idea of floating a joint venture to develop Gangavaram into a major port. The VPT tried pre-empting any private participation in the venture with a proposal to partner the Gangavaram project. However, the Andhra Pradesh Government preferred a private company to a Central government organisation such as the VPT.

The biggest advantage of Gangavaram is its location on the sea with an average available draft of 36 metres. If the Andhra Pradesh Government decides on a private partner, the VPT will run the risk of losing a sizeable chunk of its bulk traffic. ``We wil l face the challenge,'' is all Mr. Rao says.

``First, we will make our people aware of the impending danger,'' he says, adding, ``perhaps, we could hope to achieve reduction in costs, improvement in productivity and addition to capacity.''

Asked about the VPT's present capacity, Mr. Rao says, ``Frankly, I would not know. After all, the port capacity cannot strictly be defined in the way it is done in case of a manufacturing unit. With a nameplate capacity of 36 million tonnes, it is possib le to achieve 40 million tonnes simply by cutting down on idle time and motivating people to work for longer hours. We have done it.

``But then even now, two of our shifts work for six hours against the normal eight hours. Which means, the port works for 20 hours instead of 24 hours. It is not so easy to change the practice. The people here are used to it.

``Also, our channel often gets clogged with naval vessels. Nearly 40 per cent of the time is occupied by the movement of naval vessels. Again, there is nothing much we can do about it.''

The VPT Chairman, however, sees no threat in the development of the Paradip port. But the Dhamra port, which is yet to take concrete shape, does. ``After all, Paradip is another government port. But Dhamra is a different ball game,'' he says, pointing ou t that the government cleared the project and the promoter, ISPL, is likely to implement it efficiently.

However, the VPT Deputy Chairman, Mr. N. Dhanaraju, seems convinced that the Vizag port has a bright future. He says the negligible volume of container traffic at the moment is only a passing phase. The two new multipurpose berths being built at the port 's outer harbour for handling clean cargoes will eventually become container berths.

Mr. Dhanaraju does not even rule out the possibility of the Visakhapatnam port emerging as the hub port for mainline container vessels.

Any transition is a painful process. It is only hoped that the transition of Visakhapatnam from a bulk-handling port into a container relay centre, catering to the mainline cellular vessels, will be smooth.