Colachel Port poses no threat to Vizhinjam

Thiruvananthapuram: Though the Union Cabinet has cleared a proposal to establish a port at Enayam near, Colachel on Tuesday, authorities here said that the new port would not have much impact on the business prospects of the proposed Vizhinajam Port. Vizhijam International Seaport Ltd CEO A.S. Suresh Babu told this paper that the port would have early bird advantage over the new Colachel port. “We have already ensured a credible partner in Adani Seaport and Special Economic Zone. Colachel Port has to first identify a credible partner,” Mr Babu said.

Moreover, the port would have to complete all formalities including technical study and environment impact assessment. This would take time, Mr Babu added. Sources said that even if Colachel port gets a partner, it would be a single port company. On the other hand Adani now has presence in all states except in Karnataka.

In the west coast, it operates Mundra Port, Dahej Port, Hazira Port and Tuna- Tekra Terminal in Gujarat; Murmugao Terminal in Goa and the proposed Vizhinjam. In the east coast, Adani operates Vizag Coal Terminal in Andhra, Ennore Container Terminal, Kattupalli Container Terminal in Tamil Nadu; and Dhamra Port in Odisha. This string of ports across the country enables the company to give value to shipping lines.

Vindicating the projections that the upcoming Vizhinjam Port posed a competition to the Colombo Port, the Sri Lankan government has announced a 10 per cent discount on handling charges for Myanmar transhipment operations. The port does have some disadvantages when compared to the proposed Colachel port.

Vizhinjam has very little local cargo and a small hinterland.  So it would have to be purely 'lines-driven', sources said. Moreover, the distance between Colachel and Vizhinjam is just 36 km and may affect the prospects of both the ports, they point out. However, on the plus both ports have the same location advantage as they are situated a few kilometers from the International Shipping Lane.

Huge container vessels do not come to Indian ports. They drop containers for Indian ports at Colombo, making it a major transhipment hub of South Asia. With about 2 million TEUs of cargo destined for the country gets trans-shipped at Colombo port every year, the country loses up to Rs 1,500 crore in revenues each year.