How Chandrababu can develop Visakhapatnam port trust

To

Hon’ble Chief Minister of Andhra Pradesh

Sub: Steps needed for development of Visakhapatnam Port Trust

Respected sir,

Declining operational efficiency, grossly insufficient of railway rakes for faster evacuation of cargo from port to hinterland, outdated infrastructure, rising logistics costs are some of the constraints sounding death knell to shipping industry in Visakhapatnam. All this and more, is tip of the large iceberg resulting diversion of cargo to the other ports, relegating port to stand in 5th in handling cargo in national level. Most of the times berths remain idle making local shipping industry bleed. Huge private investments coming in a big way, offering higher gross revenue share to Port. Ultimately, the investors who made investment anticipating land fall profit, was suffering due to low or nil cargo flow into their terminals and the Port have also lost their valuable water front and are saddled with low volumes.

The Visakhapatnam Port is spending huge fortune for increasing draught to handle Capesize vessels. However, Kandla Port has proved that it can also handle Capesize vessels without spending on dredging by using floating cranes and barges. Therefore, the use of barges is alternative to construction of berths and increasing the draught and bringing down the logistics cost in Major Ports.

VPT should procure more floating cranes fitted on the barges which discharge cargo in outer anchorage and in mid sea in to barges and barges unload the cargo on to shore. Importers were now avoiding the use of smaller vessels and were going for Capesize vessel to reduce the freight by adopting this radical Chinese model of using floating cranes and barges in handling over draught vessels.

Meanwhile, before implementing new projects, the pros and cons should be discussed with the trade or the actual users of port projects. Although Ports were feeling proud of more attractive private investment at higher revenue share for port capacity addition, the Port authorities never gave a thought as to whether the project was viable and whether licensee would be able to make money and re-pay bank loans and whether port could recover their part of investment made in increasing draught in channel and berths, road and rail connectivity, etc.

The main reason of our failure was secondary transportation i.e. inland water transport despite the country having a vast coastline, as industries were not waterfront based and transportation at both ends of cargo movement using roads and port logistics costs made this costlier. If the government was serious about developing coastal movement, then long coastline on sea side be given to industries and allow them to develop their captive jetties wherever possible, for receiving their raw material and loading their products. Since environment and CRZ rules don’t permit use of waterfront, VPT should following the Kandla Port model for make artificial basins near the sea coast and connect them by channels with main sea to make navigation of barges from main sea to basin and allot land to industries and permit them to use their own captive barge jetties in discharging cargo from barges.

The recent approval for formation of a Special Purpose Vehicle (SPV) called Port Infrastructure Vikas Nigam Limited (PIVNL) by the union cabinet to provide efficient rail evacuation system thereby enhancing handling capacity and efficiency and to provide last mile connectivity to the major ports is step in the right direction. It will help in modernization of evacuation infrastructure, operate and manage internal port railway system; and raise financial resources for funding port related railway projects. The task ahead for the SPV is a mammoth one and expected to result in substantial reduction in dwell time of cargo at ports and bring down the overall logistic cost for trade. The focus on port connectivity will also fit well into the ambitious Sagarmala project, which aims to promoting port-let direct and indirect development.

I sincerely hope that PIVNL would help solve decade’s old problem of evacuation. India’s ports suffered from chronic under investment and a lack of strategic planning, including inadequate linkages to railway and road transport networks. To help the sector further, the state government should develop new national waterways that will create a logistics supply chain with intermodal (rail, road and waterways) connectivity. Converting Visakhapatnam port trust into corporation under the companies Act to bring greater efficiencies in operations, raise funds for growth and compete better with their private sector counterparts is the need of the hour. The positive impacts of the formation of PIVNL and other such initiatives will depend upon the turnaround time the proposals take and if they really materialize from concepts papers into something concrete.

Time is running out. Involvement of the experienced stakeholders to form the blue print for constitution of maritime Board on a war footing basis is need of the hour. The AP Maritime Mission should be launched like several other missions to solve the above impending hurdles for future development of entire coast line of Andhra Pradesh.

I fervently appeal before your goodselves, kindly peruse the above plaguing issues with indomitable spirit to come forward with relentless commitment to bring blue revolution in the beautiful coast line of Andhra Pradesh.

Warm Regards

G. SAMBASIVA RAO

The author is Vice President-The Andhra Chambers of Commerce And Industry Federation and Managing Director of Sravan Shipping Services Pvt Ltd in Visakhapatnam