Scrap heap: Centre's fiat leads to container pile-up at Kandla port

500 containers create logjam at second-largest port terminal

A government directive has led to severe congestion in the Kandla Port Trust (KPT), the country's second-largest port.

There are more than 500 loaded containers parked in its terminal currently and major handlers such as P&O Ports, Maersk and Transworld have decided not to ship any more scrap-loaded containers.

The congestion, according to non-ferrous scrap-dealers in Gujarat, is because of the new mandatory pre-inspection norm introduced by the Directorate General of Foreign Trade (DGFT).

Due to this, the Customs authorities are taking time to hand over the scrap-loaded containers to traders.

The Ahmedabad Non-Ferrous Metal Exim Association (ANMA), which is a body of non-ferrous scrap traders in Gujarat, said the delay is also hitting industries dependent on metal scrap, mainly steel manufacturing units, brass units, cable manufacturing companies and auto components manufacturing companies.

The Centre's missive followed discovery of ammunition in containers loaded with ferrous scrap meant to be sent to steel maker Bhushan Steel. Most of these containers were released form the Kandla port.

Kishor Purohit, president of Anma, says ammunitions can't be transported as a part of non-ferrous scrap because the scrap is loaded into containers only after compacting them using 4,000 pounds per square inch pressure.

"A bullet or a missile cannot be made without ferrous scrap," he said. "Non-ferrous metals don't pose such threat."

According to him, steel and cable manufacturing units are severely hit by this move, while brass units in Jamnagar area have started to close down. The Kandla Port handles 60 percent of country's total scrap imports, which are valued at Rs 2,000 crore per annum.

"This problem is here only "" there is no congestion or delays in releasing non-ferrous scrap containers at the Jawaharlal Nehru Port Trust (JNPT) in Mumbai or Kolkata Port or even at the International Container Terminal in Delhi," Purohit said.

The matter has been taken up with the chief commissioner of Customs in Ahmedabad.

"But our attempts have been in vain. So from Thursday, we have decided to opt for a relay hunger strike in protest of the development," he added.

In a letter written to the DGFT in Delhi, on February 17, ANMA said, "After the Bhushan Steel episode, your good office has prescribed a pre-inspection certificate to be produced in original from 29 inspection agencies and it seems that while designing the pre-inspection certification, your good office may not have consulted either the Customs department or the trade associations. Due to this a certain anomalies have already been incorporated in the certificate which are either irrelevant or harsh on the part of the inspection agencies to certify."

However, DGFT has not come back to the scrap dealers yet while lack of infrastructure to handle containers with Central Warehousing Corporation (CWC) at Kandla also have been causing further delays in release of these 500-odd containers.

"The CWC is responsible for bringing the scrap-loaded containers from KPT and after due inspection by agencies, it is supposed to hand over the containers to us. The big bottleneck is it has only one weigh bridge, it lacks in lifters, trailers and there is also lax security. The matter has been represented so many time to CWC but it continues to lack infrastructure," said K B Agrawal, Director of Palco Metals Ltd, Ahmedabad. Agrawal is also a scrap dealer.

A director of the Gandhinagar-based Alex Cables Ltd said, "Because of the clog, we have stopped manufacturing cables in spite of pending orders worth of crores of rupees. Non-ferrous scrap is the main raw material for manufacturing cables," he said.

An auto component manufacturer based in Pune said because of the delays in releasing non-ferrous scraps, the auto component manufacturers across the country are in a spot.

"Their stock of raw materials would be exhausted soon," believes Chinubhai Shah, president of Gujarat Chamber of Commerce and Industry (GCCI).

"The matter should be resolved fast keeping in mind the interest of the steel manufacturers. Also, it is high time that the Centre intervened to clear the bottlenecks," Shah said.