Orissa told to look for alternative port facility

With the Centre deciding not to pursue the legal route for sorting out the territorial dispute between Orissa and West Bengal over sea waters, the shipping ministry has asked the Orissa government for alternative sites to locate a transloading facility of Kolkata Port Trust (KPT).

The shipping ministry is holding consultations with the two sides on the issue. The next meeting is scheduled after the Bengal Assembly elections.

The Orissa government had raised the issue after the Kolkata Port decided to locate such a facility (transloading is the process of transferring a shipment from one mode of transportation to another) near the coastal waters of Orissa, threatening the business of Dhamra port, a joint venture of Tata Steel and Larsen & Toubro. Dhamra has an exclusivity agreement with the Orissa government, according to which no port facility can be created within 25 km.

In its opinion to the shipping ministry, the law ministry has said all coastal waters belong to the central government and a state government has no jurisdiction over the water that surrounds its land. The issue of locating a transloading facility has landed in the Orissa High Court. “Even though the law ministry’s opinion favours the Kolkata Port, the government does not want to create a Centre-State discord by taking the legal route. We have therefore decided to adopt a consultative approach,” said a senior shipping ministry official.

The proposed transloader is to be kept for eight months in Sand Heads in the Bay of Bengal within the water limits of KPT. From May to September, it is going to be located in an area near to Orissa, since the waters turn choppy during that period and the transloader has to be sheltered and removed from Sand Heads.

“We are open to any policy which will facilitate the use of coastal waters. National waters are being allotted by states to various ports who are just becoming zamindars. The best approach is to have a common area which can be used by all ports,” M L Meena, chairman, KPT, told Business Standard.

Dhamra port, as mentioned earlier, has an exclusivity agreement with the Orissa government. “Dhamra port feels a competition threat from the Kolkata Port due to the transloading activity they (the latter) want to undertake. As a result, it (Dhamra) wanted to have a revenue share model for the business coming through transloading,” said a senior government official. The shipping ministry is not in favour of any such agreement with Dhamra.

Experts see merit in the legal position. “While Dhamra’s terms of agreement have to be respected as far as commercial reasons go, no step can be taken that goes against the law. A state cannot say these are my waters. It is India’s coastline, not of each and every state,” said Sameer Kanabar, director — infrastructure, Ernst &Young.