After signing a profit-sharing agreement with Cochin Shipyard Ltd (CSL) - India's largest shipbuilding and maintenance company - Kolkata Port Trust (KoPT) is set to revive its ship repairing facilities in two out of five idling dry docks which it abandoned in 2015.
Under the terms of the agreement, KoPT will be providing the necessary waterfront, dry dock, land and will be repairing part of associated infrastructure while CSL will repair and operationalize the idling machines needed for repairing ships and may also install renovated machinery pieces if needed. The profit from this venture will be shared in a 40:60 ratio between KoPT and CSL.
According to KoPT chairman, Vinit Kumar, the project is expected to be completed in the next 3-4 years and upon completion, KoPT will be able to repair 16-18 ships every year which has the potential to generate revenues of Rs 500 million a year.
At the time of the previous winding up of ship repairing operations in 2015, KoPT used to repair 10-12 ships per annum.
With a track record of manufacturing tankers, bulk carriers, port crafts, passenger vessels and other water crafts, CSL is the only shipyard in India which can build up to 1,10,000 DWT (deadweight tonnes) vessels and repair vessels up to 1,25,000 DWT.
It also has the expertise to repair air defence ships. Around 25 per cent of CSL's revenues accounts from ship repairing activities.
India currently is estimated to have a fleet size of 1350 vessels which port officials feel presents a good opportunity for KoPT to recommence these operations.
CSL is likely to bear the entire Rs 250 million requisite investment to operationalize the project.
"Once KoPT used to be very famous for its ship repairing expertise and we now want to restore that glory", Kumar said.
Expecting container handling for Nepalese cargo to surge by around 3-4 per cent this year and bring in more transparency in container handling rates, KoPT has also set up a dedicated trade facilitation centre for the Himalayan neighbour.
"We have always been told (from the centre) to give the highest priority to Nepalese cargo and it continues to be so. However, lack of information and transparency in rates were affecting the trade with Nepal and thus we have come up with this initiative", Kumar said.
The dedicated facilitation cell will hear query and complaints from Nepalese importers and exporters and resolve their issues on priority. On account of lack of transparency and discrepancies between rates charged by KoPT and Vizag Port Trust (VPT) on Nepalese cargo, KoPT lost around 1,000 TEU of containers to VPT last year.
Kumar said that despite the loss of container traffic to VPT, the overall traffic movement for Nepal grew 3-4 per cent.
Nepalese cargo accounts for 15 per cent of the consolidated topline of KoPT.