VIZHINJAM PORT AND ISSUES OF INDIAN PORTS – ECONOMY
News:
First project cargo vessel calls at Vizhinjam international seaport
What's
in the news?
●
The under-construction Vizhinjam
International Seaport received its first cargo vessel with the berthing of the
project cargo vessel, Zhen Hua 15 from China, sailing under the flag of Hong
Kong.
Key
takeaways:
●
The Hong Kong-flagged vessel is carrying
one quay crane and two yard cranes fabricated in China and it will take 10 days
to unload consignment.
Vizhinjam
Port:
●
The Vizhinjam International Transhipment Deepwater Multipurpose Seaport is an
ambitious project taken up by the Government
of Kerala.
●
It is designed primarily to cater
container transhipment besides multi-purpose and break bulk cargo.
●
The port is currently being developed in a
landlord model with a Public Private
Partnership component on a design, build, finance, operate and transfer
(“DBFOT”) basis.
What
is the landlord model?
●
In the landlord port model, the publicly governed port authority acts as a
regulatory body and as landlord while private companies carry out port
operations - mainly cargo-handling activities.
●
Here, the port authority maintains ownership of the port while the infrastructure is leased to private firms
that provide and maintain their own superstructure and install their own
equipment to handle cargo.
●
In return, the landlord port gets a share
of the revenue from the private entity.
●
The role of the landlord port authority
would be to carry out all public sector services and operations such as the
award of bids for cargo terminals and dredging.
Significance
of the port:
●
The port will be equipped with 30 berths
and able to accommodate enormous "megamax" container ships.
●
The ultramodern port, which is near
important international shipping lanes, would bolster India's economy.
●
The port is anticipated to compete for a
portion of the trans-shipment business with Colombo, Singapore and Dubai.
Issues
faced by ports in India:
1.
High ship turnaround time: India's ports experience high ship
turnaround time. For instance, the typical ship turnaround time at Singapore is
under a day. However, it takes more than two days in India.
2.
Container traffic and congestion: A lack of handling
equipment, and ineffective operations all contribute to port congestion, which
is a serious issue. For instance, the port of Nhava Sheva.
3.
Mixture of suboptimal transport modes: Transport modal mix is
not optimum since the necessary infrastructure for evacuation from large and
minor ports is lacking.
4.
Limited Hinterland Linkages: Due to limited
hinterland connectivity by rail, road, motorways, coastal shipping, and inland
waterways, there is inefficiency. As a result, moving goods and paying for
transportation become more expensive.
5.
Lengthy Custom Clearance Procedure: Inspections and scrutiny
continue to be drawn out for cargo and other shipping operations, despite the
fact that India's customs processes are quickly growing paperless and becoming
digital.
6.
Inadequate infrastructural and technological problems:
●
This involves lack of adequate depth,
suitable length, berth count and berthing facilities for proper berthing of the
vessels at the major as well as on non-major ports.
●
The majority of non-major ports lack the
necessary material handling tools that would enable a speedy turnaround.
●
Absence of huge volume handling equipment,
lack of suitable facilities, IT systems, and navigational aids.
7.
Regulatory issues:
●
Major and minor ports are governed by
different authorities. The regulatory system is also strict.
●
Foreign-flagged ships are not permitted to
transport cargo between Indian ports because such ports are still reserved for
domestic shippers.
●
Purchasing land and obtaining
environmental approvals.
8.
Problems with the PPP Model:
●
Private operators are typically subject to
stringent restrictions under the majority of port PPPs, usually in the form of
the kinds of goods they are permitted to handle.
●
Up until recently, there were still issues
with tariff control and the lack of a dispute settlement process.
Other
issues with Vizhinjam port:
●
Vizhinjam is financially not viable even with a significant financial
participation of the Kerala government.
●
The container transhipment terminal at
Vizhinjam has high global competition.
●
Colombo which is situated just 202
nautical miles from Vizhinjam is now the 25th largest container port in the
world.
●
By the time Vizhinjam becomes operational,
the Colombo port will be more
developed because of the Chinese investments.
●
Vizhinjam did not attract port investors
mainly because of the heavy risks involved in the transhipment business.