Mumbai: The Union government plans to build a Rs1,300 crore container terminal at Ennore port near Chennai to meet the growing trade requirements of the booming economy. Around 95% of India’s trade by volume and 70% by value moves by sea.
Ennore Port Ltd will invite bids from local and overseas port operators in the next few weeks to build the 1.5 million 20-foot equivalent unit (teu) a year facility, said an official at the shipping ministry. Teu is the standard size of a container and is a common measure of capacity in the container business.
“The Public-Private-Partnership Appraisal Committee set up by the government is evaluating the project. It is likely to clear it in the next fortnight after which Ennore Port will float global tenders to select the private operator,” the official said. While the new terminal will be developed with private investment, the government will bear the cost for dredging the port’s channel and provide rail and road connectivity for moving the cargo.
The new terminal will have a channel depth of 15.5m which will allow mainline container ships with 8,000 teu capacity to call for loading and unloading cargo. “If required, the channel depth will be deepened to 18.5m to allow 10,000 teu capacity ships to call at the port,” the official said. The successful bidder will be given the right to operate the facility for 30 years. It will share its annual gross revenues with the government with the bidder quoting the highest revenue share winning the contract.
Ennore is a corporate port set up under the Companies Act, 1956, and is not subject to regulation by the Tariff Authority for Major Ports, the tariff regulator for 11 major government-owned ports in India. Thus, the private entity operating the container facility at Ennore will have the freedom to fix tariffs.
India’s 12 major ports handled cargo of 5.43 million Teus in the 12 months to March 2007. The container traffic at major ports is estimated to grow to 11.7 million teu by 2011-12. “There is an urgent need to create more port capacity. Otherwise, it will become a constraint to growth,” said David Wignall, head, ports and logistics at London-based maritime consultancy firm BMT Group Ltd.
Trade in India has been growing at over 16% a year, triggering huge demand for importing raw materials and exporting finished goods. With ports scrambling to increase their capacity to handle cargo, private firms, both Indian and foreign, have built or are in the process of building container terminals. India’s biggest container port, Jawaharlal Nehru Port in Navi Mumbai, handled 3.29 million teu in the 12 months to March 2007 from three container terminals.
Out of this, the container facility run by the government handled 1.31 million teu, while the terminal run by Dubai government-ownedDP World handled 1.36 million teu. A third terminal opened in 2006 by a consortium of Danish port operator APM Terminals and the state-run Container Corporation of India handled 0.63 million teu.
DP World also operates a 1.2 million boxes a year facility at Chennai Port which is nearing full capacity. It is also building an international container transhipment terminal at Cochin Port. DP World and APM Terminals also operate container terminals at Mundra and Pipavav ports, respectively.