Vallarpadam shipping hub still not ready for full launch

The latest deadline for the two-decade-old proposal for a trans-shipment hub at the Vallarpadam island near Kochi is January. Prime Minister Manmohan Singh is expected to inaugurate the hub.

However, it appears that work is unlikely to be over by then and it will take several more months to become fully operational, say shipping industry sources. The shipping ministry says it has set December 15 as the deadline for completion of dredging, another in a series of target dates.

Some months earlier, the dredging contractor, Jaisu, was levied a penalty of Rs 535 crore for the delay. After this, it refused to do the job. However, it returned soon and resumed work. The penalty was waived on assurance that work would resume at full speed.

The trans-shipment hub is being developed by DP World. Jaisu alleged the developer had thrown hard and sticky substances in the area supposed to be dredged by it, said an official. About Rs 3,000 crore has been invested by DP World, one of the largest marine terminal operators in the world, in the project.

The proposed International Container Transshipment Terminal (ICTT) would have a capacity of three million TEUs, a measure used in contained shipping. It would be India’s first. At present, major cargo vessels bound for India cannot dock at any of the country’s ports. They instead go to Colombo or Singapore and smaller cargo vessels bring the load here. Mother vessles will directly dock at ICTT.

Delay after delay

DP World proposed to do Jaisu’s work itself, but the shipping ministry turned down the proposal, according to a senior DP executive. “DP World itself delayed the dredging work it was supposed to do along the jetty by about seven months, which according to Jaisu further delayed their work,” a senior official said.

Jaisu has dredging contracts for both Mumbai and Kandla ports. At both places, there had been a delay of several months, said an official. Jaisu is a Kandla-based group with a turnover of Rs 130 crore. Repeated calls to the company’s office, including its to chairman and managing director, Samip S Kewalramani, yielded no response.

“The contractor was not thrown out as that would have further delayed the work. ICTT is high on the priority list of the government and the contractor was asked to deploy all its resources in Vallarpadam,” said a ministry official.

The idea of having a transshipment hub in the country was first mooted in the late 90s. It was initially supposed to be a joint venture between the government, also the land owner, and a private bidder. “There was an inherent conflict in this, since as landlord one would want higher rent. Those bids were cancelled in 2001 and later fresh bids were invited with fresh parameters,” said Michael Pinto, former secretary of the shipping ministry.