The government has ratified the tripartite agreement between the Chennai Port Trust (ChPT) management, port labour unions and the regional labour commissioner on the working arrangements to be followed for workers after handing over the port's container terminal to P&O Ports, Australia.
Following the approval, the much-delayed privitisation programme of the port container terminal will be able to proceed further. A pact would now be signed between P&O Ports and Chennai Port Trust for transfer of management control of the facility to the private player.
The original tripartite agreement, which was signed in June this year, specifies the various options available for the port trust workers following privitisation of the terminal. Workers will have an option to stay with the port trust or join the private terminal. The pact contains a VRS scheme for the workers, officials said.
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P&O Ports had won the mandate to manage and operate an existing container terminal for a 30-year period in July last year. The operator is expected to invest around Rs 600 crore on sprucing up of infrastructure in the terminal over the concession period and will extend royalty payments to the port trust in lieu of taking control of the terminal.
As per the contract, P&O will take over the existing 600 metre container terminal which will be further expanded by 350 metre. The private operator has to guarantee a throughput of at least 350,000 TEUs (twenty-feet equivalent units) in the first year and 400,000 TEUs in the second year. Following a second stage 290 metre quay extension, the throughput is expected to reach 500,000 TEUs, the officials said.
Once the third phase of civil works comes on line, the operator will be expected to add a further 150,000 TEUs in the first year and an additional 300,000 TEUs in the second. By the third year of operation, the terminal must account for 20 per cent of all export container traffic in the port, 25 per cent by the fourth year and 30 per cent by the fifth, as per the concession agreement.
Transhipped boxes cannot be counted and fines will be levied should agreed targets not be met. Fixing of targets is a step in the direction of developing Chennai port a transhipment centre on India's east coast. By the third year of operation, Chennai port will have to become a major transhipment hub in the box handling business, accommodating major liner operators, officials said.