The Hindu : Tamil Nadu News : Approval for second container terminal a `welcome' surprise

Online edition of India's National Newspaper
Sunday, Apr 03, 2005

Tamil Nadu

Tamil Nadu

Approval for second container terminal a `welcome' surprise

By N. Ravi Kumar

CHENNAI, APRIL 2. The export-import trade in the region is jubilant over the Shipping Ministry approving the second container terminal project of the Chennai port but feels that it should not cause further delay in setting up a similar facility at the nearby Ennore port.

Admitting that Wednesday's in-principle approval came as a surprise, trade and industry sources say Ennore would have been the ideal choice for the second terminal in the State, as it has a vast back-up storage area, relatively congestion-free roads and potential to scale up capacities.

Though the Ennore port, the first corporatised facility of its kind, had unveiled plans for a container terminal some time ago, little seems to have had happened.

Plagued by strikes

Nevertheless, the trade response to the Ministry's decision is one of relief, as the privatised facility at the Chennai port witnessed frequent labour strikes in recent times. Apart from affecting the reputation of exporters among buyers and putting pressure on production schedules of import-dependent companies, the delay caused by the protest resulted in more transaction costs for the trade, especially a congestion surcharge on containers levied by feeder vessel operators.

At an interactive session with D.T. Joseph, Shipping Secretary, held here on Wednesday by the Confederation of Indian Industry's Institute of Logistics, a leader of the steamer agents association said that in the last three years, the surcharge was levied eight times on containers shipped from and to the Chennai port.

The approval for the second terminal therefore has brought cheer to the trade and industry. According to Murali Venkataraman, president, Madras Chamber of Commerce and Industry: "The move is welcome, as the existing facility has not been able to meet the growing requirements of the trade and industry in this region."

The Ministry, however, should think in terms of building terminal capacities, says M. Rafeeque Ahmed, chairman of the Council for Leather Exports.

"We were actually looking forward to a container terminal at Ennore, as it would be able to handle the growing traffic volumes."

Focus on BOT

The focus should hereafter be on selecting a good BOT (Build-Operate-Transfer) partner for the proposed facility in Chennai.

The second terminal, according to P. Radhakrishnan, executive director, South India Importers Association, would act as a restraint for both labour and the management. Though comparatively small in terms of capacity and back-up storage area and dependent on the same congested roads for movement of cargo boxes, the second terminal will usher in competition.

But it should not blunt future competition between the Chennai and Ennore ports, pointed out many among the shipping intermediaries and trade.

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