KoPT divided over govt's transloading facility JV

Written by Indronil Roychowdhury | Kolkata | Updated: May 27 2010, 05:54am hrs
The Union Shipping Ministry wants to rope in SAIL and Shipping Corporation of India (SCI) to implement the proposed transloading facility on the Bay of Bengal, but officials of Kolkata Port Trust (KoPT) aren't too keen on the initiative.

Rakesh Srivastava, joint secretary, shipping, told Fe that the ministry recently discussed the issue of setting up a transloading facility on the Bay of Bengal with SCI, SAIL and KoPT. It has mulled forming a SAIL-SCI joint venture for implementing and operating the project but things are at a preliminary stage of discussion, Srivastava said.

The KoPT has to first agree to the idea of SAIL and SCI forming a JV to take up the project and send a formal proposal to the ministry. KoPT is yet to send any proposal to the ministry, Srivastava said.

According to A Majumdar, who till May 21 functioned as KoPTs acting chairman -- Ajay Ranade took over as acting chairman from Majumdar on May 24 -- two sites have been identified, one at Sandheads, off the coast of Bengal and another at Kanika sands, off the coast of Orissa. The port will soon take a decision as to how to move ahead with the project.

Majumdar said since Indian Oil Corporation (IOC) had installed its 330 km Haldia- Paradip pipeline at a cost of Rs 700 crore, Haldia port had lost around 8 million tonne of crude cargo, which has become deterrent to its business.

For the loss of crude cargo and draught constraints reducing parcel size of ships, Haldia handled around 10 mt less in 2009-2010 (the port is yet to come out with its yearly performance) from 41.5 mt it handled in 2008-2009.

For sometime, the port, Majumdar said, was banking on the iron ore cargo but iron ore handling entirely depended on the demand from China. Now China seems to have created an inventory of iron ore and exports from India has dropped. This has reduced iron ore handling in Haldia.

Coking coal is one cargo, which can partially compensate the loss of crude cargo and for this the ministry as well as the KoPT is willing to see an SCI- SAIL JV implementing and operating a transloading facility on the Bay of Bengal, Majumdar said.

According to a section of KoPT officials, however, the move to nominate SAIL and SCI to built and operate a transloading facility was violative of the government norm of selecting contractors and operators via the bidding route.

Five consortia -- the consortia of ABG Group in partnership with France's Louis Dreyfus Amateurs, Shipping Corporation of India in partnership with Canada's Sea Bulk and Belgium's Bocimar, Liberty Marine in partnership with Canada's CSL, Tata-Martrade International Logistics with Italy's Coeclerici and Sesa Goa -- have already responded to an expression of interest (EOI) floated by KoPT in September 2009. But the ministry wants to have a SAIL-SCI JV for implementing this project bypassing the respondents, the officials alleged.

Ministry sources said the EOI was for having a single transloading facility at Sandheads, which has an available draught of around 50 metres round the year. But transloading there is only possible for six months between October and February because after that the sea becomes choppy. So respondents didnt find it viable to operate for six months.

The ministry has identified Kanika Sands in Orissa as another location for transloading during the rest of the year. It is eager to have SAIL- SCI JV take up the project on a nomination basis than going through another tender.

The JV envisions SCI bringing coking coal for SAIL from Australia with its large vessels and SAIL transloading at the two points for bringing the entire cargo to the Haldia port, from where it would transport it to its plants at Bokaro and Durgapur.

KoPT officials said since Kanika Sands fell within the territorial limit of Orissa, KoPT would require taking a clearance from the Orissa government for setting up a transloading facility there. This would be another complicated affair for the port.