Shipping cos want ports to bear dredging costs

Shipping cos want ports to bear dredging costs
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First Published: Sat, Jun 30 2007. 12 13 AM IST
Updated: Sat, Jun 30 2007. 12 13 AM IST
Mumbai: Shipping lines calling at Indian ports to load and unload cargo want the government to bear the cost of dredging the port’s channel and berth to lower the charges that they pay to dock at these ports. Port calling costs constitute a major expense for shipping lines entering an Indian port to carry cargo.
Compared with international ports, these charges (called vessel related charges) are high in Indian ports, says S.S. Rangnekar, former director of liner and passenger services at state-run Shipping Corp. of India.
It is 50% more expensive to bring a vessel to Indian ports compared with Jebel Ali in Dubai, Singapore and Colombo,” says Ganesh Raj, senior vice-president and managing director, sub-continent, at Dubai government-owned world’s third biggest container terminal operator, DP World.
Rajiv Kumar Tetarbe, general manager, commercial, at Hong Kong-based dry bulk ship owner Chellaram Shipping Co. Pvt. Ltd, claims that Indian ports “are fleecing ship owners”.
According to Tetarbe, a Panamax carrier pays about $30,000 (Rs12.3 lakh) for calling at any of the ports in Australia for loading iron ore and coal. For unloading the same cargo at an Indian port, the ship owner has to pay about $80,000—more than two and a half times the cost levied at Australian ports.
Panamax carriers are ships that can sail through the Panama Canal carrying dry bulk commodities such as iron ore, coal and steel.
Port calling costs in India are high because the 12 Central government-run major ports that account for about 76% of the total cargo handled at all the Indian ports, pass on the cost of dredging the ports’ channel and berth to the ships calling at these ports.
This activity, known as capital dredging, is required to make the channel deep enough to accomodate ships. Since Indian ports accumulate silt quickly, they also resort to maintenance dredging throughout the year to maintain the depth in the channel and at the cargo handling berths at a certain level.
Rangnekar says that the capital dredging costs, in developed countries, are borne by the government. “There is an urgent need to benchmark the vessel-related charges at Indian ports with those prevailing in neighbouring ports to bring them on a par,” he said. To achieve this, the government will have to bear the cost of capital dredging rather than recover this cost from the shipping lines, he adds.
Mumbai Port chairperson Rani Jadhav says that Indian ports should strive for deep-draft berths that can accomodate bigger ships. At the same time, charging competitive rates can attract ships andcargo.
An inter-ministerial group, headed by shipping secretary A.K. Mohapatra, in a recent report has recommended that the government bear the cost of dredging the channel and cargo handling berths at major ports.
The group was set up by the prime minister’s committee on infrastructure to suggest ways to reduce the waiting time for cargo at Indian ports.
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First Published: Sat, Jun 30 2007. 12 13 AM IST