Tuticorin port slashes rates to attract more cargo

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Jan 2009

Tuticorin port, one of the three ports of Tamil Nadu located in the southern part of the state, announced rate cuts of the order of 30% in cargo handling with effect from the 1st of February. The single minded objective behind the cuts is to attract more cargo and increase its handling capacity, according Tuticorin port trust (TPT) chairman G J Rao. "We have exceeded our target tonnage of 20.8 million tones (MT) by handling 21.48 MT in 2007-08. This means, we can handle more by fine tuning our unloading processes," Mr.Rao said. "But, in the presence market scenario, while exim trade is not expected to increase, we need to ensure that cargo that services locations in southern Tamil Nadu, are routed only throough our port."
So far, the average cargo handling rate at TPT worked to Rs.104.96 per tonne, which was higher than most other ports. On Thursday, the port officials announced rate cuts that effectively brought the average cost down to Rs.72.87 per tonne. This includes a reduction of 30.57% in the rate for handling industrial coal, brought about by reducing dredging levy to zero, cargo handling labour pool (CHLP) levy by 50%, and wharfage by 25%. Coal contributes highest to the bulk cargo handled by the port.
"As our traders have been telling us, it is not fair to levy a charge on infrastructure necessary for the industry to function. It is up to the port to provide that," Mr.Rao said. Acting on this, TPT has allocated Rs.538 crore for dredging so as to increase the port's draft from Rs.10.7 m to Rs.12.8 m, in two years.
It plans to develop its inner harbour at an estimated cost of Rs.961.25 crore; a detailed project report has been prepared for development of its outer harbour at an estimated cost of Rs. 4350 crore, with possible funding from the Japanese national bank. TPT has floated tenders for the development of Hare Island in its vicinity into a cargo handling area, and has received 27 responses for the same. There's also a plan for a 160 acre port SEZ at a nascent stage.
"We hope to achieve a tonnage of 24 MT for this year," Mr.Rao said. As the port handles no iron ore at all now, it has also announced a 50% rate cut for handling iron ore hoping to attract some of the iron ore exporters. When all the infrastructure planned is in place, the port capacity is expected to go up to 84 MT.

Source: Economic Times India