Source: ET Infra
This will be the second container line to launch a service from the eastern coast port in the past few days to facilitate export-import trade from the state.
The Odisha government will pay $200 per twenty-foot equivalent unit (TEU) as viability gap funding (VGF) to Regional Container Lines (RCL) if the export-import volumes during a ship call at Paradip Port falls below the minimum guaranteed volume of 180 TEUs.
If RCL manages to load/unload 180 TEU’s during a call at Paradip Port, then the viability gap funding will not be applicable, a senior official with the Odisha government told ET Infra.
But, for any shortfall below 180 TEU’s, for example, if the ship loads/unloads 150 TEU’s, then for 30 containers, the state government will compensate the line through a viability gap funding of $200 per TEU, the official said.
The Odisha government is set to sign a memorandum of understanding with Regional Container Lines (RCL) on Tuesday to help flag off the service, the official said.
The terms for the RCL service are the same as that agreed by the Odisha government to Mediterranean Shipping Company S.A, the world’s biggest container line, except that instead of the minimum volumes of 250 TEU’s for the MSC service, the minimum volume level has been pegged at 180 TEU’s for the RCL service.
RCL was picked to start services under the VGF scheme through an Expression of Interest process in which MSC had also applied.
With RCL launching a service from Paradip Port, the export-import trade in Odisha will have connectivity to both Europe/U.S. and the Far East.
MSC launched the service last week linking Paradip with Colombo in Sri Lanka, a regional transhipment hub, from where the containers will be put on its mainline vessels and hauled to final destinations in Europe and U.S. and vice versa.
RCL will connect Paradip Port with Port Klang, from where the containers will be put on mainline vessels and shipped to final destinations in the Far East.
On its part, the Paradip Port Authority is offering 75 percent discount in vessel related charges to container lines besides no container scanning charges to boost container traffic. “Henceforth, prospective clients from Odisha will be no more dependent on ports outside the state,”, P L Haranadh, Chairman, Paradip Port Authority, said while flagging off the MSC service.
Paradip Port Authority has been engaging with container lines for long to start EXIM services from the port without success. In 2020, RCL started a service from Paradip Port but discontinued after a few calls.
Since starting commercial operations in 1967, Paradip Port has been mostly handling iron ore, coal and crude oil.
“Our approach was only towards improving the coal, iron ore and crude oil traffic. It is time now to diversify the cargo basket as an estimated 2 lakh TEU’s are available in the hinterland of Paradip Port. The combined efforts of Paradip Port Authority and the Odisha government has yielded results in attracting a reputed container line like MSC to the port. We have a 5 million tonne capacity Paradip International Cargo Terminal Pvt Ltd, which is no less than any other container terminal in the country with a 14.5 metre draft and state of the art machinery to handle container traffic. It is totally underutilized,” Haranadh stated.
Paradip International Cargo Terminal is a private facility run by J M Baxi Ports and Logistics Ltd at Paradip Port.
The services run by MSC and RCL will put Paradip Port, one of the 12 owned by the Union government, on the container map and help diversify the cargo mix.
