Journey to 100MMT club

Paradip Port in the last 3-4 years worked on a broad strategy and also successfully executed plans to achieve the cargo volume. The port has not made any changes to its tariff since FY2012-13, and the tariff will remain unchanged till 2019.

QParadip Port is the 3rd port in India and first on the east coast to handle 100 million tones of cargo in a financial year! What are the factors that contributed to the volume?

Paradip is one of the largest dry bulk handling ports in the country. Dealing with dry bulk comes with some inherent challenges like pollution, involvement of multiple handling agencies, and many other issues. So it requires lot of co-ordination to seamlessly manage the cargo. One of the fundamental reasons for cargo growth at Paradip is that the port has been able to provide quality services to customers at the cheapest price. The value that the port provides to the customers is the most important factor for the success. The port in the last 3-4 years worked on a broad strategy and also successfully executed plans to achieve the cargo volume. The port has not made any changes to its tariff since FY2012-13, and the tariff will remain unchanged till 2019, and in recent years Paradip is the only port in the country to keep tariff steady. Unlike earlier days when there were anti-competitive practices at the port, but now a fair degree of competition was introduced into the system, and it helped in a way that the cargo handling cost for customers has came down by 30-40 percent in FY2017-18 as compared to the year 2012. Due to healthy competition, cargo handling efficiency at the port has also improved. Staying competitive is need of the hour, and Paradip’s competition is not limited to Dhamra or Gopalpur ports, even bigger ports like Gangavaram which can handle capesize bulker and offer very economical rate are capable of diverting cargo meant for Paradip. Hence, a great deal of co-ordination with all stakeholders including railways has helped Paradip to achieve the growth in cargo volume. With cost of service coming down due to improved efficiency, the port is now focusing on adding infrastructure into place to remain competitive. Cargo volume is growing at a rate of 16-17 percent Y-o-Y for Paradip, and the port aims to overtake Kandla to become the highest cargo handling port in the country in FY2018-19.

QWhich are the other cargo segments that you are looking at other than bulk?

We are looking at changing the eco-system in and around Paradip like handling clean cargo. In this direction along with the clean cargo handling berth, the port is putting in place auxiliary infrastructure to attract customers The port has invested heavily to control pollution. The construction of container-cum-clean cargo handling berth is going to be completed 1 year before the scheduled timeline. The first vessel is expected to be berthed sometime by the end of April 2018. Apart from containers, the berth will handle steel coils and other steel products. Among other infrastructure, the berth has a warehouse adjacent to it, and a quayside railway terminal. One of the highly industrialized regions in the country is located within 100km radius of Paradip Port that include, heavy industries like steel, aluminum, fertilizer, coal mines and oil refinery. The Indian Oil refinery will soon operate at full capacity of 250 million tonne in current year, Essar pallet plant will augment capacity, and there is growth expected in iron ore pallet movement. Coal movement to southern parts of India is also going to increase. A new mechanized import coal handling berth will be operational by December 2019, an iron ore handling berth will be commissioned in December-January of FY2018-19, and the container handling berth will be fully operational in two months. Most of the planned infrastructure will be complete by December 2019, including mechanization of 3 export coal berths.

Currently, the cargo demand is more for coastal shipping compared to exports. Manufacturing units located in the coastal areas of south and western India like Jaigarh and steel plant in Dolvi are the drivers of coastal cargo movement for Paradip Port.

 QWhat is the current status of multi-modal logistics park (MMLP) and industrial park?

The MMLP is being set up in collaboration with CONCOR as a supplementary infrastructure to container handling operation, and 100 acres of land has been allocated for the project. The MMLP project will have the largest warehousing facility, approx. 11 lakh sqft, in eastern India. It will offer value added services like labeling and packaging of products, and there are plans to develop the facility as a major distribution centre for consumer goods. The project work is expected to start in May-June of this year. As part of the development of industrial park, land has been allocated for setting up a pellet plant of around 4 million tone capacity to a consortium led by Triveni Group. An expression of interest has been put forward for development of a food park at Paradip industrial park, and the port has appealed the union government to allow lease for a period of 75 years. A timber processing zone is also on the card for the industrial park to tap the timber processing industry currently located at Kandla. Though tenders have been floated many time for the timber processing zone but the response has not been very encouraging, and the port looks to market the potential of this project in a larger way to draw the attention of industries. Additionally many chemical industries have been invited by the State government and Odisha Industrial Infrastructure Development Corporation to set up units in the industrial park and the port is facilitating them with required infrastructure like tankage. Around 600 acres of land have been earmarked for the industrial park and about 277 acre has been allocated.

Q How the port looks to benefit from the marine food export industry in the state?

Earlier also the port had offered reefer container services to the seafood industry, and Concor has invested about `5-6 crore to develop rail side warehousing facility. The maiden train service carrying reefer containers was started in March 2018. Meanwhile, Concor is looking at bigger investment to serve upcoming marine food park at Deras, on the outskirts of Bhubaneswar.

Q If you have to highlight the challenges before the port, what are they?

Mandate from the central government is to develop Paradip Port as the gateway hub port for eastern India. And a major challenge is to develop the eco-system such as attracting the ancillary industries to set up units in the region. Moreover, as the cargo volume grows, there is need to develop separate roads for freight and general traffic movement. Other challenges are putting in place major railway projects like Haridaspur-Paradip on time, and if these projects are not completed on time it will choke the growth of the port. The Haridaspur-Paradip rail project is running late by 2-3 years, and the government is focusing on completing it quickly. Paradip Port rail siding is one of the top three freight rail terminals in the country and one of the highest volumes of rakes are unloaded at the Paradip rail terminal.

Q What kind of cargo growth do you notice in the hinterland?

Most of the steel plants in the region are on expansion. Paradip is the natural port of choice for the hinterland and it works in favor of the port. The port has initiated plans to handle Cape vessels, and in another 2-3 years fully laden Capes can discharge at the port. The aim is to achieve mechanization level of 97 per cent to meet the growing cargo demand in the region. Gypsum and fertilizer is being exported to Bangladesh through the port. About 79 heavy duty trucks were shipped from the port to Africa in April this year. The port has been able to retain and gain back customer owing to lower tariff.