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The port is focusing on attracting newer commodities gaining demand. A dedicated marketing team is reaching out to traders, expanding the port’s hinterland
Q How would you look at the performance of the port so far in FY2016-17?
At the end of Q3 of FY2016-17 the port has registered a growth in cargo volume of about 8.5 per cent. The rise in cargo volume is largely contributed by iron ore. Containerized cargo volume has also increased at the port. Meanwhile, coking coal and steam coal volume has come down, and POL product volume has remained almost at par with previous year.
Q What will be your strategy to make up for the loss due to restriction on coal import?
There will be not much change in coking coal volume as steel plants are dependent on it and steam coal volume will not be much affected as demand for it by thermal power plants in Tamil Nadu has not come down. Steam coal which is being imported from abroad for thermal power plants has come down. We are focusing on commodities which are growing like bauxite which is being imported by some companies like Vedanta for their plants. There has also been a growth of volume for lime stone, gypsum and manganese. We are also following up with many cement plants in the region.
Q How are the Boston Consulting Group recommendations being implemented?
First time, we have set up a marketing team reaching out to the customers even in Raipur in Chhattisgarh. A lot of food grain, especially rice is being exported from Raipur through Kakinada because Visakhapatnam didn’t have a covered storage space. Now we are taking over a storage space built by Food Corporation of India, which will allow us to offer 30,000 tonnes of covered storage area to food grain exporters.
Q PPP projects are a setback! Once thought to be partners in progress now walking out for various reasons, how does it impact port growth?
Since 2009, the port has undertaken nine port modernisation projects under PPP mode. Many of the PPP projects were stuck because of financial issues. A special purpose vehicle SEW Vizag Coal Terminal was developing a coal handling berths in the inner harbor of the port, however, after completion of 65 per cent of work, the company couldn’t finish remaining work due to their financial constraint. The concessionaire is seeking financial assistance from the port to complete the project. Remaining of the PPP projects have been completed.
Q Is there any scope for change in PPP model in the new Port Act?
There is not much scope for existing PPP projects but lot of flexibility and autonomy will be for new projects. In the new Act, the only scope for revision of old PPP agreements is concessionaire can appeal before the arbitration board in cases where an issue arises which was not anticipated at the time of signing of the concession agreement. In such cases, the arbitration board will recommend the government to make necessary corrections.
Q What is the current status of Adani Vizag Coal Terminal?
Following increase of domestic coal production, steam coal import has dried up due to which the concessionaire has completely stopped operation at the berth. We have issued a consultation notice to them. They have to handle minimum guaranteed volume at the berth. They still have three years time to prove their ability to run the terminal, and currently they have entered into the second year of operation. After the completion of third year if minimum guaranteed volume is not handled at the terminal, the agreement gives the flexibility to the port to take over the terminal and add new commodities to the terminal and put it up for fresh bidding.
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