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Plea to support Kochi port to meet recurring dredging expenses

Posted on April 24, 2023

Expressing concern over the financial position of the Cochin Port Authority (CPA), Elamaram Kareem, MP, has appealed to Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal to financially support the port authority to meet its recurring annual expenditure on maintenance dredging so that it can be saved from a financial crisis.

The appeal comes after the ministry is learnt to have approved a plan for capital dredging involving an expenditure of around ₹400 crore for better draft depth.

Mr. Kareem said it was learnt that in-principle approval had been given for dredging for increasing the depth of the channel for the Vallarpadam International Container Transshipment Terminal. He said in his letter to the Minister that the Kochi port had been struggling, owing to severe financial constraints, to carry out maintenance dredging operations in the past, and that the situation continued to be so.

It was claimed in the letter that the Vallarpadam terminal was under-performing despite the port authority spending on annual dredging to maintain the depth of the shipping channel. Besides, the government had provided significant public funding for infrastructure.

The facility was inaugurated in 2011. The licence period for the build-operate-transfer (BOT) agreement between the CPA and India Gateway Terminal-DP World, which operates the facility, is for a period of 30 years. At the same time, there is the question of minimum guarantee throughput, Mr. Kareem said.

The Kochi port incurs expenditure to the tune of around ₹140 crore annually to maintain the depth of the channel. The port authority also pays vessel-related charges of an average of ₹60 crore annually to attract more vessels from the neighbouring port of Colombo. Despite these measures, the growth in volumes at the container terminal and the subsequent revenue for the port are not enough to meet the expenditures involved.

The letter also alleged that around 85% of cargo handled by the Vallarpadam terminal was coastal cargo.


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