Date:12/04/2004 URL: http://www.thehindubusinessline.com/2004/04/12/stories/2004041200050600.htm

Back A track to Paradip for Concor?

P. Manoj

Concor is also keen on operating from Paradip as it is a centrally-located deep-water port with a fully electrified railway route having good connectivity to inland container depots.

THE Shipping Ministry is reviewing a proposal to allow the state-owned Container Corporation of India Ltd (Concor) to handle containers at Paradip Port.

The Ministry had last year granted "in-principle" approval to the proposal, but the plan is being re-examined following protests from private terminal operators that such a step would be detrimental to their interests given Concor's status as a monopoly rail hauler of containers to and from ports.

The review exercise seeks to put in place checks and balances so that private entities operating container terminals at major ports are not affected if Concor is allowed to handle containers at Paradip port. The Ministry, however, says that it would look at the issues raised by the stakeholders and take a fair view on the matter.

"We want our asset base to grow in the ports sector. Some of the physical infrastructure at Paradip is now lying idle. Concor has expressed interest to handle containers at the port and improve the volumes. Private terminal operators are not interested in investing in Paradip, but at the same time they are against allowing Concor to operate at Paradip. We are trying to reconcile all the view points and will take a final decision soon", says the Shipping Secretary, Mr D. T. Joseph.

The review will focus on a couple of issues including the maximum concession period and the revenue sharing format. Concor had asked for a concession period of 30 years, but the trade fears that once the licence agreement is signed for a 30-year concession period, nothing can be done if Concor starts diverting its trains to Paradip at the expense of other container terminals.

This is considered a strong possibility by the trade and private terminal operators despite statements made by the Concor brass recently that it would be fair to all the terminal operators without any discrimination owing to its PSU status.

"We are looking at whether Concor could be allowed to handle containers at Paradip on a yearly basis so that the contract can be reviewed every year and problems sorted out to the satisfaction of everybody," Mr Joseph pointed out. Concerned over its paltry container traffic, Paradip port had submitted a proposal to Concor/Shipping Ministry according to which Concor would be allowed to handle containers at the port by utilising any one of the existing multi-purpose cargo berths available there and by connecting the port to the different inland container depots (ICDs).

The Paradip Port Trust is keen to augment its box traffic through this plan. "Today, we are handling hardly 400 twenty-foot equivalent units (TEUs). Tomorrow, if Concor is allowed to operate at Paradip and it connects the port to different ICDs, our container traffic can be in excess of 4,000 TEUs.

The entire future of Paradip is linked to this proposal," a Port Trust official said.

In the absence of a hinterland, currently only one or two container vessels of Pacific International Lines call at Paradip providing a cargo of 400 TEUs per month on an average.

"The absence of a hinterland is a big handicap. However, if by rail, the port can be connected to different ICDs, there is lot of potential for increasing our container throughput," says the Port Trust official.

Concor is also keen on operating from Paradip as it is a centrally-located deep-water port with a fully electrified railway route having good connectivity to ICDs.

However, private terminal operators say that the project was being handed over to Concor without following a due process of open competitive bidding. But Concor defends its interest in Paradip. "Concor is a PSU. Why can't we be given this project on a departmental basis? Our rivals are worried that Paradip will take away traffic from their terminals. They don't want Concor to do any business in India," says a top Concor official.

Concor says it will have to invest Rs 60-70 crore before commencing operations at Paradip. "The berth which is being provided to us is not good enough for container handling as a result of which the pavement and the berth will have to be strengthened," the official said. Besides, Paradip is not being patronised by shipping lines. "So, Concor will have to do a lot of marketing."