Visakhapatnam port woos more trans-shipment cargo

The Visakhapatnam Port is initiating steps to attract more transshipment cargo and is slated to reduce handling charges, especially for crude transshipment, reports from. The move is expected to help the port shore up revenues.

The opening of the Kakinada Deep Water Port two years ago saw the Vizag port losing significant transshipment cargo. Kakinada Deep Water Port (KDWP), which is operated by Kakinada Seaports Limited, a joint venture company of International Seaports Pte and SSA Asia Inc, has been doling out several concessions for handling of large crude carriers.

The concessions have ensured that big ticket clients like the state-owned Indian Oil Corporation have preferred the Kakinada port for crude transshipment for the last two years.

Earlier, IOC used to send its large crude carriers to Vizag port for crude transshipment. To attract the IOC's very large crude carriers and ultra large crude carriers, KDWP had reduced its hiring, handling and other port related charges drastically.

The Kakinada port handled around 16 lakh tonnes of crude transshipment in 2002-03 and it has increased its crude shipment handling volume to about 31 lakh tonnes in 2003-04. At the same point in time, transshipment cargo volumes have fallen at the Vizag port.

The Vizag port handled 95 lakh tonnes of crude transshipment in 2001-02, which dropped to 71 lakh tonnes in 2002-03 and 70 lakh tonnes in 2003-04.

During 2001-02, out of the total petroleum product handling of 185 lakh tonnes, transshipment cargo garnered 51 per cent of the volume. In the next year, the share of transshipment cargo fell to around 40 per cent.

"In order to attract the large crude carriers to the Vizag port, we have reduced charges for crude transshipment. Now, overall crude transshipment handling charges are more or less equal to Kakinada port and in some areas our rates are lesser than that of Kakinada Port," D S K Dattu Raju, traffic manager, Vizag Port, told Business Standard.

Previously, Vizag port used to charge about Rs 4.5 lakh on VLCCs for port hiring charges. After taking the approval of the Tariff Authority for Major Ports (TAMP), the port has reduced these charges to Rs 3 lakh. Likewise, other port related charges have also been lowered on VLCCs and daughter vessels by up to10 to 20 per cent.

In addition to this, the Vizag port is planning to set up a Single Buoy Mooring berth to attract more crude transshipment cargo.

The port is expected to mobilise funds of around Rs 450 crore to take up this project. Once this project is completed crude transshipment is expected to be cheaper at the Vizag Port.