No trans-shipment activity at Vallarpadam CT in Kochi after cabotage relaxed

THE Vallarpadam container trans-shipment terminal at Kochi Port in India is yet to receive notification of a relaxation in cabotage rules, three months after the legislative change was announced by the Cabinet Committee.

The failure of Kochi Port to receive a formal order from the Directorate General Shipping authorizing the port to bring the cabinet order into effect has meant that no mainline vessel has been able to dock at the terminal for trans-shipment activity, reports India's Business Standard.

It said that according to senior officials, the terminal operator Dubai Port World, has not been able to approach shipping lines that have shown an interest in calling at Kochi because of the lack of clarity over cabotage rules. Shipping lines fix their service route networks six months in advance.

Earlier, Shipping Minister G K Vasan was cited as saying, "Relaxation of cabotage law may attract mainline foreign vessels at Vallarpadam transhipment terminal, thereby enhance their earning."

The Indian National Shipowners' Association (INSA) has been opposing the relaxation of the cabotage rules. "We continue to reiterate our position but there is nothing we can do now. The governments in China, Brazil and Australia are going for policies that restrict foreign flag vessels. This policy will not help the country," said Anil Devli, chief executive officer, INSA.

According to Section 407 of the Merchant Shipping Act, 1958, no ship other than an Indian vessel or a ship chartered by a citizen of India shall engage in the coastal trade of India, except under a licence granted by the Directorate General of Shipping. However, the rules have been relaxed for mainline vessels arriving at Vallarpadam's trans-shipment terminal.

Dubai Port World has operated the international trans-shipment terminal at the port since February 2011. The company has so far invested INR3,000 crore in the first phase of the project. The total investment in the public private partnership project will is expected to rise to INR6,200 crore by the end of the third phase of development in 2016.

The report also noted that cabotage relaxations aside, the dredging work at the port is also far from over. It said between June 2011 and 2012, ICTT handled 300,000 TEU, after accepting cargo that could not be handled by the congested Jawaharlal Nehru Port and Chennai Port Trust. Only 30 per cent of the terminal's 1-million-TEU capacity has been utilised, a level that is anticipated to increase to 4 million TEU by 2016.