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The Calcutta Port Trust and private port operator Jindal ITF have slashed their transhipment rates to lure big boys SAIL and Tata Steel to bring in more cargo to Haldia.
The duo agreed to reduce the tariff by Rs 150 a tonne to make their operations competitive vis-a-vis neighbouring ports Dhamra and Paradip in Odisha.
The board of trustee of the port, the apex decision making body, gave its approval to the move on June 30. This was followed by a meeting last week involving Steel Authority of India Ltd (SAIL) and Tata Steel to chalk out a strategy to fast track their operations. Both the steel makers import coal through various ports in the eastern region, such as Haldia, Paradip and Dhamra.
Even though Haldia offers a faster evacuation of cargo via good rail-road connectivity, shippers are forced to look elsewhere as they cannot bring big ships to Bengal because of siltation in the Hooghly river.
Transhipment will allow port users to bring fully laden Capesize or Panamax vessels to the high sea and transfer the cargo to smaller vessels which will come to Haldia. JITF will also station a ship at that point for temporarily storing the cargo in case the smaller vessels are busy or take time to reach the spot.
At present, Panamax vessels unload 65 per cent of their cargo either at Dhamra or Paradip and then come to Haldia. Capesize vessels do not come to Haldia at all because of poor navigability of the Hooghly river.
The operation was turning out to be at least Rs 250-300 a tonne costlier than Dhamra, finding few takers.
“CPT decided to cut handling charges by Rs 50 a tonne, while Jindal agreed to reduce transhipment rates by Rs 100 a tonne. SAIL and Tata Steel want more but we told them to bring ships first and then we will look into it,” M.T. Krishna Babu, chairman of CPT said.
Sources said transhipment was likely to start from September after the monsoons on a trial basis. The transhipment is slated to take place at Kanika Sands in Odisha, about 90 nautical miles south of Haldia.
If the operation is found viable, technically and commercially, steel players will enter into an agreement with JITF and CPT underwriting minimum guarantee tonnage.
Port officials pointed out that Haldia would definitely be cheaper than Paradip for all major steel plants in the east, except Rourkela. However, Dhamra will be cheaper than Haldia despite the rate cuts. But users will benefit from their greater availability of rakes and shorter haulage time of the rakes. Moreover, higher priority to these ships unloading at Haldia will be an added incentive.
CPT is also targeting two industries that use coal as their feedstock – Hooghly Met Coke (a Tata Steel subsidiary) and IPCL, an upcoming power plant of Srei Infrastructure. They may give an additional 1.5-million-tonne cargo to the port.
“Transhipment may have the potential to add 2.5-3-million-tonne cargo in the near term,” the official added.
Port observers said much of the success of this exercise would depend on the extent to which CPT can bring the cost down.
Handling charges
The cargo after the shipment will be handled in berths 2 and 8 in Haldia where port appointed contractors will carry out on board and shore operations. While CPT will pay the cargo handlers Rs 180 a tonne, it will collect Rs 245 a tonne (transhipped cargo) after the rate cut.
However, one of the shore handlers recently started raising a bill of Rs 60 a tonne in the garb of allied services, turning the operations expensive. Sources said chairman Krishna Babu had intervened and asked the operator to reduce the rate.
An official of the concerned handler said shippers were free not to take up the service, which includes providing security to the cargo against theft and sprinkling water to prevent fire (in case of coal).
“These are not part of the job profile CPT tendered out. We ensure no loss of cargo from the ship to shore and then wagon loading. It is voluntary on the part of the shipper,” the official said.
Port observers found no fault in the logic unless not paying up for the allied services would result in loss of cargo.
“Shipping minister Nitin Gadkari initiated contract for shore handling in Haldia to bring down the cost of business and increase the income of the port. This experiment was to be a test case for rest of the major ports of India. We need to see if this is actually taking place on the ground,” a port observer pointed out.
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