Back Kandla set to challenge Chennai for bronze
Gaurav Raghuvanshi
A major expansion programme is set to drive up cargo volumes at Kandla port.
Following in the next two positions are Chennai and Kandla, with 39.071 million tonnes and 37.661 million tonnes of cargo handled till January. "We are set to witness a cargo surge in the next two months, especially in crude oil. Till December, even Kolkata was marginally higher than Chennai and we thought it was within our reach. By the end of this year, we hope to overtake Chennai Port," says Kandla Port Trust Chairman, Mr A. Janardhana Rao.
What about next year? "We will be number one," says Mr Rao. According to industry sources, while the Vadinar Single Point Mooring (SPM) facility is expected to contribute to increasing cargo for Kandla, Chennai is also gearing up to maintain its position. Chennai will be handling 100,000 tonnes out of the 500,000 tonnes of wheat being imported by the country through the five southern ports, but that is not expected to change the situation substantially, especially as the cargoes will come in towards the end of March and continue till May in the next financial year.
Meanwhile Kandla Port expects a continued surge in crude oil cargo, the commodity that had pulled down its performance last year due to less demand from Indian Oil Corporation for its Koyali (Vadodara) and Panipat refineries. Kandla has been lobbying hard with oil companies to import crude through Vadinar even as a rival emerged in its vicinity — the private sector Adani Port at Mundra, which is setting up its own SPM with a 25 million tonnes per annum capacity.
IOC has set up a tank farm at Mundra and erected a pipeline up to Kandla, from where crude moves to its Panipat and Koyali refineries through the Kandla-Bhatinda pipeline. The pipeline was originally set up as a products pipeline for export from Kandla, but has now been converted into a crude pipeline. Kandla expects to handle five more Very Large Crude Carriers (VLCCs) for IOC, which will boost its crude cargo figures, says Mr Rao. Vadinar has already handled 1.2 million tonnes of crude till January and hopes to end the year at 1.6 million tonnes.
The other commodities that are driving volumes for Kandla are fertilisers, salt and soyabean. What gives Kandla Port the confidence that it will emerge as the largest port in the coming years is the major expansion programme currently underway. Apart from a container terminal and six new berths, including four through private participation, Kandla Port has drawn up plans to develop a satellite port outside the Kandla creek at Tuna and is also planning to set up a Liquefied Natural Gas (LNG) terminal.
For the ongoing expansion plans, tendering is currently underway for four new berths private participation on a Build-Operate-Transfer (BOT) basis. A large number of companies, including Larsen and Toubro, ABG Heavy Industries, JM Baxi group and Adani Exports, have shown interest in developing the berths on offer.
The interested parties have to submit their technical and financial bids by March and Kandla Port Trust hopes to award the contracts by June. Meanwhile, for the two berths to be constructed by the Kandla Port itself, construction will begin on the 13th berth by March 2006 and be completed by September 2007. Work on the 14th berth will begin in June 2006 and be completed by November the following year.
The two berths have been estimated to cost about Rs 100 crore and the funds would come from internal accruals. The 13th and 14th berths will have a total quay length of 410 meters and a designed draught of 13.5-14 metres. They will be able to handle post-Panamax size vessels of 240m length and 75,000 DWT (dead weight tonnage).
Apart from the new berths, Kandla is carrying out dredging in its 27-km navigation channel that would gear it to take in Very Large Crude Carriers. The Rs 86-crore dredging assignment has been awarded to Jaisu Shipping. The port plans dredging works to increase the available draught from 11.5 m to 13.5 m in the next two years at the cost of Rs 136 crore. The final approval for the proposed container terminal is also expected in the next couple of weeks as the validity of the original contract expires in February 2006.
At present, Kandla handles about 1.86 lakh twenty foot equivalent units (TEUs) per annum, which will rise to five lakh TEUs once the proposed container terminal is commissioned. The port's 11th and 12th berths will be dedicated to handlingcontainer cargo. ABG Shipping Ltd, in partnership with Voltri Terminals, has emerged as the winner in the bidding process by offering a 48.997 per cent revenue share.
Kandla Port Trust is also awaiting central Government clearance of development of a satellite port at Tuna, outside the Kandla creek. By going outside the Kandla creek, the Port can overcome the draught restrictions on the port.
"There is a draught restriction in the Kandla creek due to a bar in the mouth of the creek. To get around the limitation, Kandla Port Trust has envisaged a plan to develop a greenfield satellite port near Tuna, 30 km away. The greenfield port will handle various kinds of cargo," says Mr Rao. The plans appear grand. But will Kandla emerge as the number one port in the coming years? Only time will tell.
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