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Business News/ Industry / Infrastructure/  Kandla, Mundra port in race to reach the 100 mt mark
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Kandla, Mundra port in race to reach the 100 mt mark

Kandla port loaded 93.6 million tonnes of cargo in the year to March 2013; Mundra was second with 82 million tonnes

Kandla port (above) is operating at 102.87% of its capacity of 91.22 mt, according to the shipping ministry. (Kandla port (above) is operating at 102.87% of its capacity of 91.22 mt, according to the shipping ministry. )Premium
Kandla port (above) is operating at 102.87% of its capacity of 91.22 mt, according to the shipping ministry.
(Kandla port (above) is operating at 102.87% of its capacity of 91.22 mt, according to the shipping ministry. )

Bangalore: By the time the fiscal year that began a little over two weeks ago ends next March, India will likely have at least one port and potentially two that handled 100 million tonnes (mt) or more of cargo.

The union government-controlled Kandla port and billionaire Gautam Adani-owned Mundra port, located 60km apart on the Gulf of Kutch in India’s north-western state of Gujarat, are within striking distance of reaching the coveted 100 mt mark and join an elite club of global ports that loads this amount of cargo.

In the year to March 2013, Kandla loaded 93.6 mt of cargo, up from 82.5 mt a year ago. Mundra port was second, handling 82 mt of cargo, up from 64 mt a year earlier. Mundra is also the country’s biggest private port.

This apart, the difference between Mundra, India’s show-piece private port, and Kandla is striking.

Kandla earned about 738 crore from handling cargo while Mundra earned about 3,000 crore from the smaller amount of goods. Kandla handled 54.3 mt of crude oil and petroleum products, accounting for more than half of its total cargo. At Mundra, coal, containers and liquid cargo each accounted for one-third of the total loaded.

Being a union government port, Kandla operates under a regulated regime where its rates are set by the Tariff Authority for Major Ports (TAMP), the regulator for the dozen ports controlled by the union government.

Mundra does not come under the purview of TAMP and has the freedom to set its own rates. This is because it is a port owned by the Gujarat government but given to Adani Ports and Special Economic Zone Ltd (APSEZ) for development and operation on a 30-year contract. Mumbai-listed APSEZ is 77.5% owned by Adani Enterprises Ltd, the flagship company of the Adani Group.

It took Kandla 56 years, having started operations in 1957, to reach the current level of cargo handling whereas Mundra started operations only in 2001.

In the year to March 2013, Mundra overtook Chennai port as India’s second biggest container gateway. Mundra loaded 1.57 million standard containers in fiscal 2013. The number one spot in this cargo category has been held for a long time by union government-controlled Jawaharlal Nehru port near Mumbai that handled 4.26 million standard containers in the same period.

Mundra is one of the two Indian ports that’s listed, the other being Pipavav port, also in Gujarat.

Port experts attribute the success of Mundra and Kandla partly to their strategic location.

About 70% of India’s trade in commodities such as crude oil, coal, fertilizers, food grains and container cargo is accounted for by cargo originating and destined for centres in north and north-western India including the Delhi national capital region apart from Gujarat, Rajasthan, Haryana, Punjab and western Uttar Pradesh.

The location is also a gateway to Europe, the US, Africa and West Asia.

“Location is one factor," said Rajeeva Ranjan Sinha, a director on the board of APSEZ, the entity that runs Mundra port. “Many ports have good locations, but the overall logistics cost to the customer is the main driver for the growth of Mundra."

Sinha, a fomer Indian Administrative Service (IAS) official, ran Mumbai port, controlled by the union government, as chairman between 1997 and 2003.

Apart from the flexibility to set its own rates, among Mundra’s biggest strength is its deep draft of 17m , enabling it to handle capesize ships, the biggest vessels that can carry dry bulk commodities such
as coal, iron ore, steel and grains. It also has good rail and road connectivity to evacuate cargo.

Kandla has a depth of just 12.5m but is also well connected by rail and road. Its biggest advantage is having among the lowest cargo-handling rates among ports operating in India.

“Our handling rates are low because we are an old port with old investments and less labour," a Kandla port official said.

But, the turnaround time for ships is as high as 5.05 days, including a waiting period of 2.54 days to get a berth to dock at. “We always have ships waiting for berths because the arrival of vessels is in excess of berthing capacity," the official added.

Kandla is operating at 102.87% of its capacity of 91.22 mt, according to the shipping ministry.

While ships may have to spend five days at Kandla to berth, unload, load cargo and sail off, the extra time and costs arising from this is offset by the low cargo-handling rate at the port, said a Mumbai-based port expert. The turnaround time for ships at Mundra is 18-20 hours and vessels don’t need to wait for a berth. Kandla has 23 berths compared with Mundra’s 24.

P.D. Vaghela, chairman of Kandla Port, declined to be interviewed for the story.

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Published: 21 Apr 2013, 09:44 PM IST
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