Is the move to build a port at Colachel aimed at crippling the ports in Kerala? Port users and industry observers in the State say that the rapid techno-economic feasibility report for the Colachel Port clearly point to ulterior motives.

According to them, the report highlights the weakness of Kochi Port as well as the proposed Vizhinjam port in the State. Ironically, the Shipping Ministry, which appointed consultants for Colachel, had approved the viability gap funding and other support for the new port at Vizhinjam a year ago.

Govt stake in ICTT



In Kochi Port’s ICTT at Vallarpadam, the government stake is much higher. The Centre had already invested ₹1,500 crore for setting up road and rail connectivity. The ₹3500 crore Vallarpadam terminal, once hailed as a milestone in India’s logistics infrastructure development, is the first greenfield container transhipment terminal, which was set up to cut India’s dependence on neighbouring ports for transhipment.

However, the consultancy report for Colachel pointed to several limitations in the efforts of Kochi Port in receiving hinterland cargo from Kerala due to lack of inter-State transport access to Tamil Nadu. The report referred long delays in inter-state checkpoints especially at Walayar, labour unrest and loss of man-days at Kochi Port, which it said, hindered smooth cargo movement.

Vizhinjam ‘drawback’



The proposed Vizhinjam port project of the Kerala government has also been flayed by the techno-feasibility report, saying that the project will be at a disadvantage due to lack of gateway support and ease of doing business due to its location in Kerala (similar to Kochi).

Vizhinjam, according to the consultants, have constraints on scale compared to Colachel, which has 10-metre TEU capacity due to the 4 km shoreline available in the Enayam site.

Rebuttal



Disputing these arguments, CS Kartha, President of Cochin Chamber of Commerce and Industry, maintained that there was hardly any strike either in the port area or in the ICTT in the last two years.

The green channel set up at Walayar by the State government has ensured smooth cargo movement from Tamil Nadu and Karnataka, he added.

Alleging bias in the move to develop Colachel, Kartha said it would send wrong signals to private investors of ports in Kerala.

Losing proposition



Highly placed sources in the port said that a transhipment terminal is a low revenue-earning project and it requires a base gateway cargo for sustenance in the initial years. With the absence of a rich captive hinterland, Colachel will eat into the cargo of Tuticorin in the initial years and will witness idling or underutilisation in Tuticorin as well as Colachel itself.

Moreover, Coimbatore containers will find it costlier to skip Kochi and travel an additional 200 km to Colachel.

Shipping lines choose ports of call based on the number of containers. With the available pie being divided between Vallarpadam, Vizhinjam and Colachel, it will be a concern whether any of these ports will be able to attract major lines.

It will also not be easy for these ports to compete with Colombo, an already established transhipment port, the sources said.