Adani’s container terminal will be a game-changer

10 October 2016

Adani Ports is building a container terminal at Kamarajar Port Ltd at Ennore, north of Chennai. It will be a game-changer for the port, MA Bhaskarachar, CMD of Kamarajar Port Ltd, India’s first corporatized major port that comes under the purview of the Centre.

At present, cranes are being assembled and, by December 15, we plan to start operations. The container terminal will be a game-changer for the port, which has been always branded as a bulk port. Once container operations starts, we will gain importance in global maritime and become a multi-cargo port. At present, there are a few captive users of our berths. Coal is used by Tamil Nadu Electricity Board; common user terminal by five or six importers; cars by five or six companies and liquid cargo by a couple of oil companies. However, if the terminal starts, hundreds of exporters and importers will use the facility. The port’s image will change drastically.

On competing with Kattupalli port with Adani container terminal, he said, It all depends on the facilities and tariff that each terminal provides. Each should compete using its own advantages. Whichever port is efficient, competitive and provides better productivity will get the cargo. Adani has invested money at Kamarajar port, and cannot keep the terminal idle. There is a Minimum Guarantee Throughput committed by it and there is revenue sharing of 36 per cent. There will not be any conflict of interest between the two terminals. It is up to the Adanis how they are going to handle the two terminals. If Adani was not present at Kattupalli, this terminal would have suffered as there would be more competition from some other player. To arrest this, Adani will have control over two ports and balance the competition between them.

Some cargo that is going to Chennai port will get diverted to either Kamarajar or Kattupalli. Container traffic is growing globally, and we need to take advantage of it. We have good rail and road connectivity, and no habitation nearby to create traffic congestions. Bengaluru, Coimbatore and the South Indian hinterland handled by Krishnapatnam and Chennai can come to our ports.

The LNG terminal is under construction and expected to be ready by 2018. Two more liquid cargo berths are coming up. One will be a captive berth for IOC and the other for different users. We will have two more coal berths for TNEB. In multi-cargo, we can handle granite, steel, machinery and clean cargo.

The capacities will increase to 90 million tonnes (mt) from the existing 35 mt. This will be enough for five-six years. However, by 2025, we will have a capacity of 140 mt.

On tariffs, MA Bhaskarachar added, Vessel-related charges for container ships are higher than Chennai port, which reduced its rates to attract cargo from other ports. Since they have offered a rebate, their tariff is lower than ours. We need to do the same exercise and reduce VRC, which is very high, to the level of Chennai port.

Source – HBL