Port competition reaches subcontinental proportions

Port competition reaches subcontinental proportions
T. E. Raja Simhan
COLOMBO PORT is facing increasing competition from Indian facilities.
The southern ports of Chennai and Tuticorin are gearing up with plans to become major container transhipment hubs, with Ennore (near Chennai) to join them. Vallarpadam in Kerala is to have an international container transhipment terminal. Colachel in Tamil Nadu is being considered for a container terminal. And Tuticorin plans to have a new outer harbour with major focus on container handling.
Colombo Plans
Against this backdrop, the Colombo port, which is among the top 40 container ports world-wide, is investing over Rs 2,500 crore on a new outer deepwater harbour.
It plans to become a major maritime hub in the region. Colombo, till recently the dominant port in the region, is facing increasing competition from Indian facilities, which are getting more container volumes thanks to the economic growth. Now, Colombo handles around 3 million TEUs against its capacity of 3.7 m TEUs. At the current growth rate, the port will reach full capacity by 2010.
The Sri Lanka Ports Authority, through a funding from the Asian Development Bank, plans to construct a new outer deepwater harbour enclosed by new breakwaters to handle the next generation ships. The project will abut the current Port of Colombo.
The construction of the basic infrastructure will be followed by the building of three terminals in stages. The first terminal will be constructed as public-private enterprise on build-own-transfer basis, according to information available on the SLPA web site.
The proposed Colombo Port Expansion Project will be designed to accommodate vessels with an overall length of 400 metre, beam of 55 metres and draft of 16 metres. Each of the four terminals will have a capacity to handle 2.4 million TEUs per annum.
The Colombo port lies at the centre of the main east-west shipping route, which links the Asia-Pacific region with Europe and North America. Further, the short transit time to India creates an opportunity to access the expanding markets of the Indian subcontinent.
Port of Colombo had established its position as the dominant transhipment port for the Indian subcontinent by the mid-1990s. Its container traffic rose from 0.6 million TEUs in 1990 to 1.7 million TEUs in 1997. However, after 1997, Colombo entered a period of stagnation with traffic remaining at 1.7 million TEU per annum until 2002.
Indian cargo
The expansion at the Colombo port will not affect the Indian facilities, according to experts such as Mr N. K. Raghupathy, Chairman, Tuticorin Port Trust. The total container traffic of 5.4 million TEUs in 2006-07 at Indian ports is expected to grow at 12 per cent per annum the next few years.
This will taper off to 9 per cent in 2010 and 7 per cent after 2015. This forecast is based on "export growth predicted by authoritative forecasting bodies" and marginal additional container penetration. India handles 5.4 million TEUs, while China handles over 40 million TEUs. With the Indian economy booming and with no signs of China's growth abating, huge opportunities exist for transhipment of containers in South Asia. Tuticorin aims to reach the status of a regional transhipment hub by 2011-12, says Mr Raghupathy.
"I believe that Colombo, Tuticorin, Chennai, Vallarpadam, Vizhinjam and Colachel will all have their share of the transhipment traffic. The infrastructure creation at Tuticorin, Colachel or Vallarpadam is not only with 2011-12 in mind but also to meet the demand several years ahead."
As per the National Maritime Development Programme of the Centre, India's container throughput will more than triple by 2011-12 from 5.5 million teus in 2006-07.
With 27 container berths (of about 300 m length each) available in the country, huge additional capacity for handling containers needs to be developed in major or non-major ports.
As Mr Raghupathy said: "The question is not whether there will be enough cargo, but whether there will be enough infrastructure to handle the country's cargo. Additional container handling capacity can come up only in the south in addition to the west and north-west." http://www.thehindubusinessline.com/2007/06/11/stories/2007061100830600.htm