NEW DELHI: To reduce India’s dependence on Colombo and Singapore ports for handling cargo traffic, the Narendra Modi government is planning to build a mega transhipment hub at a cost of over Rs 5,000 crore. The transhipment hub is expected to come up near Tuticorin in Tamil Nadu around the international trading route.
Currently, Colombo and Singapore ports handle most of the container movement as Indian ports cannot handle larger vessels.
India has also been wary of China’s growing influence at Colombo port.
“We need to cut dependence of east coast cargo on Colombo by building a container port near the international shipping route. This would also benefit Indian traders as their cost would come down. The smaller feeder vessels will bring container cargo, which then will be loaded onto larger ships,” a senior government official said.
The new container handling facility will not only reduce the logistics cost by around 10% but will also bring down the travel time substantially.
The capacity of the terminal is expected to be over 1 million twenty equivalent unit (TEUs), which will be increased four times in phases in coming years as more berths would be added.
Currently, around 2 million TEUs are trans-shipped from India to ports such as Colombo, Singapore, Salalah in Oman, Jebel Ali in Dubai and Malaysian ports.
Colombo and Singapore together account for around 66% of containers trans-shipped from India.
India is also likely to provide cabotage relaxation at the new hub. This means foreign liners would be able to transport goods from one Indian port to another without paying additional tax.
Earlier, a similar international transhipment hub was planned near Andaman and Nicobar Islands, which was just 25 nautical miles away from the international shipping route which connects Singapore.
The project could not take off due to environmental concerns in the Greater Nicobar area.
India is also planning to build five new ports at an investment of around Rs 25,000 crore.
New sites for the same are also being finalised in West Bengal, Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh.
The government is getting the detailed project reports prepared for the same.
The ports would double country’s cargo handling capacity to 2000 MT and will substantially cut down the logistics cost for movement of coal, petroleum, etc.
We need to improve turnaround time in Indian ports. Tuticorin is a sensible move. But we need to shore up modular investments and modernise port infrastructure in the region and beyond. In tandem, what’s required is to speed up rail and highway connectivity to the ports. We also need to revamp corporate structures at major ports to attract and operationalise big-ticket investments in a business-like manner. The entire port sector needs complete overhauling.
