Foreign shipping firms have to wait longer for getting permission to transport cargo between local ports in India as shipping ministry wants wider discussion on the subject. Shipping minister GK Vasan made this clear at his meeting with Kerala chief minister Oommen Chandy on Tuesday.
Chandy had sought a quick decision on relaxing current restriction on entry of foreign vessels for coastal shipping to unlock the business potential of a transshipment hub at Vallarpadam, Karala, that became operational in early 2011. Coastal shipping is allowed only by domestic shipping lines and foreign vessels are given permission on a case to case basis. Similar laws exist in the US, China, Greece, Indonesia, Brazil and Malaysia.
?Vasan categorically told Karala chief minister that he was in no hurry to decide on cabotage. He said the decision would be taken only after having detailed discussions with stakeholders,? government officials told FE.
Foreign companies have been pitching for relaxation of norms on entry of foreign vessels. The chorus was joined by Cochin Port Trust and DP World this year after Vallarpadam transshipment terminal was inaugurated in February. DP World operates the terminal of Vallarpadam at Cochin Port. However, domestic shipping firms, represented by Indian National Shipowners? Association (INSA), are opposed to the idea, fearing loss of business.
Reacting to Vasan?s views, INSA chief executive officer Anil Devli said, ?This is the most sensible thing expected of a responsible minister. Decisions on such matters must be taken after talks with stakeholders?. Vice-chairman of Container Shipping Lines Association, which represents foreign container vessel owners, Dinesh Gautama, did not take calls.
Vallarpadam terminal is India?s first transshipment platform, built to prevent India?s overseas cargo moving to neighbouring ports like Colombo and Singapore.
Shipping ministry data show that 45% of Indian container cargo makes its way through transshipment in Singapore, Malaysia, Colombo, Jebel Ali and Salalah. Colombo alone handles nearly 70% of India?s transshipment cargo. A transshipment terminal receives, stocks and moves containers from ship to ship before they head for their final destination.
But restricted movement of foreign vessels between Indian ports is causing a loss of $20,000 a week on every service to India as they cannot fill empty space with domestic cargo while moving between ports.