Let me begin by asking you, Covid-19 has impacted the performance of ports across the country, including the major ports. You have shown a year-on-year growth of 11% when compared to last year. But after that, Covid must have affected the port. Can you walk us through what was the scenario during Covid and now where is the port heading in terms of volume?
In the last FY Visakhapatnam Port Trust achieved a record output of 72.72 million tonnes, but Covid has impacted almost all the industries. Our cargo is mainly dependent on the power sector and other related industries, so it has been impacted. But as the government had declared us an essential service, from day 1 the port has been operational and we were never closed. At other ports there has been -10% to -25% growth, but we were able to achieve growth of -5% compared to last year. Despite the Covid hinderance, we could achieve our throughput properly and we hope this year also, we shall surpass the last year’s 72.72 million tonnes. While coal, mainly steam coal has declined but there is an increase in iron ore and steel. Our major cargos are iron ore, coal, oil, fertilizers, containers and other cargos. But despite Covid we will be able to achieve our targets and compared to last year also we might surpass.
That is very good sir. I also noticed that the port has planned somewhere around Rs.4000 crores of investment in the next 3 years. So, what is the big plan behind this investment?
You must be referring to our honourable Minister’s announcement in the Rajya Sabha about ports modernization especially Visakhapatnam Port where we have about Rs.4000 crore expansion plans. We have taken infrastructure development as a major thrust area which includes development of new terminals, mechanization of cargo handling systems, deepening of our channels and other logistics enhancement for better connectivity. Some works have already begun like mechanization of coal handling facility, upgradation of general cargo berth operated by Vedanta, development of EP1 berth by Adani and SQ6 berth in the inner harbour for multi-cargo – these are all PPP berths. EQ10 berth is being developed for liquid cargo handling and upgradation of the iron ore handling plant in the outer harbour is planned and we are developing a green channel berth for coastal cargo and are strengthening our 1 berth for handling of Panamax vessels. We are also going for WQ7&8 berths for handling Panamax vessels and mechanization, rehabilitation of Mooring Dolphins of OSTT – these are the major thrust areas we are planning.
Our VCTPL already has a container terminal which is being extended at a cost of Rs.633 crores. Road connectivity is also very important for which the 4-lane connectivity from Convent junction to Sheela Nagar is being expanded to 6 lanes. We have installed a 10 megawatts solar power plant and we have a CFS operated through joint venture with Balmer Lawrie at cost of Rs.213 crores for which they are still trying to get license. We have installed RFID gate management system and one mobile container scanner which will be operational within next one month. We are constructing flyover bridges for easy movement of traffic. So these are the areas where we are giving more importance for infrastructure, for fast movement of cargo and mechanization of berths.
Our container terminal is being expanded at the cost of Rs.633 crore and we have created additional oil handling facility at OR1, OR2 berths at a cost of Rs.168 crore that will be operational by October 2022, where we can handle bigger vessels. Now, we are handling up to 15,000 DWT and with this, we can handle around 1 lakh DWT. So, these are the major infrastructure initiatives that the port trust is taking up.
A lot of infrastructure improvement coming up in the next few years. But how much additional cargo volume can be added once all these initiatives are done?
At present, we have 126 million tonnes capacity. Once this container terminal and OR 1, OR 2 oil facilities come up, then ours will go up to 141 million tonnes. So, there is an increase of nearly 15 million tonnes addition for the existing capacity.
There is also a multimodal logistics hub planned by Concor, what is the status now?
Concor has already setup infrastructure at a cost of Rs.633 crores and they are handling all the containerised cargo. This phase involves development of 2-warehouses each of 5000 square meters capacity, and connecting road and rail infrastructure is also included. So, mainly it caters to the requirement of growing container trade in the hinterland for storing, stuffing, de-stuffing, packing and re-packing, transportation by rail and road. These are the Concor’s main activities.
Visakhapatnam Port is one major port on the East Coast which was heavily looking at coastal shipping and transshipment cargo. So, can you give me some details about how these two businesses are adding volumes to the port?
We are giving more importance to coastal shipping. For example, we are providing total logistics support to TANGEDCO, Tamil Nadu power supply company, which includes all the aspects from mines to their factory. The contract expired in August this year, but we have got it extended for one more year. We are exploring to provide logistics services to NTEL in Tamil Nadu, which is moving cargo from Paradeep to Ennore. So, we want to get it to Visakhapatnam and route it to Ennore. We are also exploring coastal cargo movement for NTPC. They are currently moving their complete cargo by rail. We want to bring it from Paradeep to Vishakhapatnam from where the NTPC Parawada plant is hardly around 30 km this will be coastal movement. So these are the major initiatives we are planning in the next one year.
Apart from POL and steel, coal, any other cargos including containers you are looking at?
Yeah. Once this extension of container terminal is completed, most probably in the first quarter of 2022, container cargo handling will go up. At present we are handling around 5 lakh teus and it will go up to 10 lakhs teus, which will also create a lot of traffic at the port and can cause congestion. So, we are developing one 4-lane road and one world-class truck parking area in 30 acres of land. Other cargos we are planning is rice, sugar, and fly ash. NTPC fly ash currently exports to Bangladesh and I think recently they got an order for Germany as well. So, we are planning to move rice, maize, sugar, fly ash in addition to our regular customary cargos like oil, iron ore, fertilizers and coal.
A while ago, you mentioned about RFID-based gate entry system. Any other digital initiatives to improve efficiency and ease of doing business taken up at the port?
Yeah. For ease of doing business we are expanding. We have this RFID system, container tracking system and PCS 1X that has reduced paper work. Through PCS all document exchange is happening and we are operating at least 34 messages in the PCS 1x. A chip is installed in the containers so that their movement can be tracked. We have also developed a solar power plant. Other environmental initiatives include plantation, mechanical sweeping and dust separation system, covered storage.
For the first time we are developing a covered storage area at a cost of Rs.38 crore in an area of 3 acres. Another environmental initiative is that we are using O polymer spray – a chemical compound which when sprayed on any dusty commodity, it forms a cover. So, even if the weather is windy the cargo particles will not fly. We have tire washing facility. Whenever our trucks go out of the port generally, dust gets stuck to the tires, for which we have truck tire washing facility.
Nepal trade is one important thing for Vizag port. When they have difficulties with Kolkata port, though Vizag port is a bit far away, they looked at this port for support and Vizag has been handling Nepal cargo. So, how is the Nepal trade at Vizag?
Yeah. Haldia is closer to Nepal but because of convenience and efficiency they are coming to us and we handled about 6000 teus last year for Nepal and I hope there may be further increase because of our ease of doing business, convenience, efficiency, because of which they are preferring Vizag port, and that will increase in future as well.
When we look at the future developments, there are some ports coming up on the East Coast of Andhra Pradesh, North of Vizag and South of Visakhapatnam like Bhavanapadu, Machilipatnam. So, do you foresee stiff competition in the future and how are you prepared for that?
We have to face competition and we can’t just shy away. Ports that are efficient, investor friendly will only survive in this competitive environment. In this background we are focusing on improving our efficiency, mechanization, getting more user-friendly and bringing up business-friendly policies, then only we can survive. In addition to the upcoming ports, government is also opening up ports to private sector. So, we have to improvise efficiency; we have to work like any other private sector types. With efficiency and performance only can we stand in the market, otherwise we will wither away.
