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Weak inland infrastructure stymies plan to build big Chennai terminal

THE plan to build a four million TEU container capacity terminal in Chennai has been shelved because the port lacks the inland infrastructure to get cargo to and from its hinterland.

The cancellation of the tender process for the construction and management of Chennai's much awaited mega container terminal has once again raised doubts in India over its port capacity development and privatisation plan, reports Drewry.

Following the breakdown of negotiations over Jawaharlal Nehru Port's (JNP) fourth container terminal, port users are naturally concerned that the matching of supply and demand is no longer being handled responsibly.

India's revenue sharing model clearly needs to be made more attractive to international bidders, and this is indeed being tackled, but poor port connectivity inland also appears to be frightening terminal operators away as well, said Drewry.

The problem is so bad in Chennai that its port authority has decided to construct a multipurpose terminal instead.

At present most cargo bound for Chennai's two container terminals is transported via road and not rail. Being located in the heart of the city, this means that trucks have to pick their way through heavy traffic at most times of the day, necessitating daylight restrictions, particularly as most container freight stations and inland container depots are also located within the city.

Things will get worse before they get better as the vehicle population in the city and container throughput at the port rises. Past attempts to widen the single road connecting Chennai port to its hinterland have been hampered by resettlement and rehabilitation issues of the families that live alongside.

An elevated by-pass around the city centre has been proposed, but its construction also remains mired in similar issues.

Not surprisingly, therefore, two new ports with much better connectivity, Kattupally and Krishnapatnam, have started operations just to the north of Chennai, and more will follow elsewhere in India if existing hinterland connections are not improved at the same pace as port expansion.