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Kochi hits the main shipping lane with new box terminal

 Staff Reporter                KOCHI, Feb 10

The Rs 3,200-crore ICTT is expected to make Kochi a key destination in the shipping world and reduce India's dependence on foreign ports to handle transshipment cargo.

Kochi, Feb. 10: The dawn of a new era in the history of Kochi will begin with the inauguration of the Vallarpadam International Container Transhipment Terminal by the Prime Minister, Dr Manmohan Singh, here on Friday. The sophisticated facility is expected to transform both Kerala and the Kochi port as the international logistic hub in India.
The Rs 3,200-crore ICTT, together with the ancillary projects, is expected to accelerate economic development of Kerala as well as the whole country.
The terminal is the largest of its kind and first in the country to operate in an SEZ. It is intended to make Kochi a key destination in the shipping world, reducing India's dependence on foreign ports to handle transshipment cargo. Once fully developed, the Vallarpadam terminal will be the largest in India.

Ideal location

Mr N. Ramachandran, Chairman, Cochin Port Trust, says that Kochi is an ideal location for the development of an ICTT due to its proximity to trunk sea-trade routes, from Europe and West Asia to the Far East and Australia, and well-established network of railway and highway connections across the country. The port also has a large green-field area for future development.
Considering these advantages, Cochin Port Trust had mooted a proposal in the early 1990s for establishment of an ICTT. Taking into account the potential, the Government of India took a decision to develop Cochin Port as a Container Transshipment Port.
Mr Ramachandran pointed out that the container traffic in India is growing at a fast pace. To ensure economies of scale, the international trend is to develop hub ports for handling mainline container vessels, and connect them to nearby smaller ports through feeder services. Owing to the lack of adequate facilities in any of the Indian ports, much of the Indian container traffic is transshipped through foreign transshipment terminals such as Colombo, Salalah, Dubai and Singapore.
This is resulting in additional costs and time delays. The Vallarpadam terminal is expected to provide facilities for handling mother ships and, thereby, obviate the need for transshipment of Indian containers through other countries.
This is expected to result in a cost saving of around $300 a box and time saving of 7-10 days, resulting in huge benefits to the Exim trade.
Mr Ramachandran pointed out that with reduced transportation costs, India's produce will become more competitive in the international market and, consequently, foreign trade volume will increase.
Economic utilisation of the cargo-carrying capacity of the Railways and the National Highways will also be possible as a substantial volume of containers will be transported between the hinterland and the port.

Natural gateway

With its strategic location on the south-west coast of the country and at the crossroads of the East-West ocean trade, Kochi is a natural gateway to the vast industrial and agricultural produce markets of south-west India. The hinterland of the port includes the whole of Kerala and parts of Tamil Nadu and Karnataka.
A study on the traffic flow in the hinterland of the port indicates that about 97 per cent of the traffic volume is accounted for by Kerala. The hinterland has further spread to different areas with the growth of containerisation and establishment of Inland Container Depots (ICDs) at different load centres.
Kochi, with its proximity to the international sea route between Europe and the Far East and Australia, can attract a large number of container lines offering immense sailing opportunities. According to Mr Ramachandran, the terminal opens up immense potential for allied industries such as container freight stations, ICDs , port-based SEZ, movement of cargo through inland waterways, logistics and warehousing centres, and so on. Being labour intensive industries, these are expected to generate substantial employment opportunities in Kerala.
The Willingdon Island, where the present port facilities are located, is fully developed and, accordingly, the future development of the port facilities has been planned on the port's land at Vallarpadam and Puthuvypeen Islands.
The establishment of highway and rail connectivity to these port areas together with deep channels for the navigation of large-size vessels under the ICTT project will throw up opportunities for the fructification of various port development schemes such as the LNG Terminal, International Bunkering Terminal, International Cruise Terminal, and so on.
Dr D. Babu Paul, a former Chairman of the Cochin Port Trust, visualised the suitability of developing an ICTT in the vicinity of Cochin Port. In his book A Queen's Story — Five Centuries of Cochin Port (1987), he writes: “If this vision is not shaped into reality, the 21{+s}{+t} Century might well see the decline and fall of Cochin; this proud Queen of the Arabian Sea is perilously close to losing her throne and much else.”
Cochin is an all-weather Port most strategically located on the East-West trade route, only 11 nautical miles away from direct sea route to Australia and the Far East from Europe. No other Indian port enjoys this closeness to the maritime highway.

Feasibility report

A detailed feasibility report was prepared by Dutch consultant, Fredric R. Harris B.V., Netherlands in 1991, to establish the technical, economic and financial suitability for setting up a transshipment container terminal at Vallarpadam; this was updated in 1997.
Though bids were invited in 1997 and 2002, these were not successful. The biding process was successful only on the third attempt, that is, in 2004 when it was invited on a revenue-share basis. Dubai Ports World, which quoted the highest revenue sharing of 33.3 per cent, was the successful bidder.
As approved by the Cabinet Committee on Economic Affairs (CCEA), the Letter of Intent (LoI) was issued to DP World on September 16, 2004.
While approving the proposal, the CCEA had specifically directed that issues relating to building up traffic of 4 lakh TEUs per annum at RGCT (Rajiv Gandhi Container Terminal), declaration of the ICTT project site as an SEZ, and identify the specific areas requiring follow-up action be addressed effectively.
As traffic build-up principally vests with the terminal operator, DP World was requested to furnish a concrete proposal for building up the traffic at RGCT. Responding to this, it furnished a detailed proposal for a time-bound commissioning of the terminal within four years.
The Cabinet Committee on Economic Affairs (CCEA) in 2005 cleared the revised proposal for the time-bound implementation of the ICTT project. The BOT contract for establishing the ICTT was executed with India Gateway Terminal Private Ltd, a subsidiary of DP World on January 31, 2005.
The Licence Agreement contemplates the development of the terminal in phases. The ICTT project envisages development of facilities for handling mother container ships of 8000+ TEU capacities. This will be a modern terminal with a 1800-m berth and supporting handling equipment with an annual throughput of 3 million TEUs when in its fully developed phase.

Licensing agreement

As per the terms of the Licence Agreement, the existing RGCT of the Port was taken over by India Gateway Terminal on April 1, 2005, for operation till the commissioning of the new ICTT. Construction of Phase-I of the project, envisaging a 600-m berth and development of stacking area and other allied facilities, was awarded on November 22, 2007.
The now-completed Phase-I has a capacity to handle one million TEUs per annum, and has such facilities as: Quay cranes — 50 m high and capacity of 65 T under spreader (twin), 50 T under spreader (single) and 70 T under cargo beam — 11 nos; Rubber Tyred Gantry Cranes (RTGCs) — 40 T quay cranes (QCs) have been installed in the terminal — two nos; and Reach Stackers — 45 T container stacking area and 10,000 TEUs cpacity — 450 reefer plug points

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