Lack of planning spawns unutilised port capacities

SHIPPING

Many of the port projects undertaken by the government during the last decade have been hampered by the lack of proper planning.

The Rs 1,000 crore plus project for developing mechanised coal handling facilities in Chennai and Paradip in 2001-02 and the container handling facilities in Kolkata and Mumbai are finding it difficult due to the mismatch between the capacities installed and the actual traffic.

While infrastructure worth Rs 883 crore was installed at Paradip, a new port (Ennore) was set up, at a cost of Rs 1,059 crore, at Chennai for mechanised coal handling. The projected capacity at Paradip was pegged at 22 million tonne and Ennore had a capacity of 16 million tonne.

But within a year, the government had to lower its thermal coal traffic projection at Paradip by 59 per cent to 9 million tonne in 2002-03 from 22 million tonne in 2001-02. Though the port is expected to attain 12 million tonne traffic by 2005-06, it still will have eight million tonne unutilised capacity.

Meanwhile the Ennore port has been unable to meet both the capacity and the projected traffic of 10 million tonne for 2002-03, registering a throughput of 8.48 million tonne for the year.

"One possible reason for this could be that the total growth in thermal coal traffic was not enough to meet the capacity created," a port official said. The total thermal coal traffic grew by just 2.2 per cent to 32.9 million tonne in 2002-03 from 31.9 million tonne the previous year. The compounded growth since 2000-01 has been just 8.1 per cent.

There has been gross miscalculation on the part of government while setting up container handling facilities at Mumbai and Kolkata, as it could not foresee a diversion of traffic towards the neighbouring Jawaharlal Nehru Port (JNPT) and Haldia Port, respectively.

Haldia, in fact, handles more of container traffic than Kolkata despite having no dedicated container facility. The compounded annual growth since 1998-99 to 2002-03 show a fall of 5.34 per cent in container traffic in Kolkata, while Haldia showed a growth of 42.9 per cent.

Around Rs 60 crore was invested in the Kolkata project. But the container cargo handled by the port in 2002-03, 0.106 million TEUs, was below the installed capacity of 0.283 million TEUs.

The Mumbai port also tells a similar story, where around Rs 80 crore was spent in setting up a container terminal in 1994-95, despite two container terminals operating in JNPT. Moreover, problems like lack of back up space for storage and choking of rail lines resulted in the traffic being diverted to JNPT.

In 2002-03 the Mumbai Port was operating at half its capacity of 0.46 million tonne.

Mumbai Port Trust has also spent more than Rs 100 crore on upgrading the oil handling facilities over the period of 1995-2001. This is when, according to government estimates, by the end of 2006-07, the port would still be saddled with an excess capacity of 7 million tonne.

The petroleum oil and lubricant (POL) traffic in Mumbai has fallen by 2.8 per cent since 1994-95 despite the total POL traffic growing by 4 per cent during the same period. If this trend continues, it is highly unlikely that Mumbai would post a recovery in traffic growth, a port official said.

Industry watchers caution that, after these setbacks, government should be more careful in its future ventures.

For instance government should think twice before implementing the proposed Rs 2,000 crore transshipment terminal at Kochi.

While the compound annual growth rate (CAGR) for container traffic through Kochi between 1998-99 and 2002-03 was just 6.5 per cent when the (CAGR) for the total container traffic was 16.4 per cent. Moreover, the present terminal at Kochi _ Rajiv Gandhi Container Terminal _ is operating below its capacity.

The trend figures cast doubts on the necessity of having a transshipment terminal at Kochi and whether traffic would pick up substantially to justify its presence.