International Container Transshipment Terminal

Project management Assignment

Jith Kumar TK Jithin Benedict

INTRODUCTION Vallarpadam Terminal is the largest single operator container terminal in India and the first in the country to operate in a special economic zone. The terminal makes Kochi a key centre in the shipping world reducing Indias dependence on foreign ports to handle transhipment. SALIENT FEATURES OF THE PROJECT Vallarpadam Container Transshipment Terminal is the first Container Transshipment Terminal of India. Vallarpadam Container Transshipment Terminal is constructed with private cooperation which is a new successful method followed by Government. Vallarpadam Container Transshipment Terminal was constructed under the policy Build, Operate & Transfer (BOT Policy).

PROMISES OFFERED BY THE PROJECT Vallarpadam Container Terminal Project (VCTP) will be a unique one in infrastructure to boost the containerization in India. The establishment of VCTP will help in bringing larger ships to India and therefore will decrease the dependence on foreign ports. This project will enable India to move into the top 20 maritime nations. The terminal makes Cochin a key centre in the shipping world reducing Indias dependence on foreign ports to handle transshipment.

FEASIBILITY OF THE PROJECT The project was conceptualised and initiated to avoid transhipment of Indian containers through the adjacent foreign ports like Colombo, Singapore and Salalah. One of the essential requirements of these hub ports is that it should be adjacent to the trunk sea trade route for the minimum diversion of the mother vessels so as to reduce its unproductive voyage and port time. Cochin, being adjacent to the trunk sea trade route and linked to the hinterlands through a welldeveloped system of National Highways and rail connection, could be an ideal location for the development of the hub terminal. PROJECT DEFINITION Being constructed in three stages, the first phase of the terminal was commissioned on 11 Feb 2011. This can handle cargo up to one million TEUs (twenty-foot equivalent units) per annum. On completion of the third phase, the terminal will be able to handle 4 million TEUs of cargo per

annum. The terminal is presently being operated by the Dubai Ports World (DPW), which will operate it for 30-years after which the control will come back to the Cochin Port Trust. The terminal after its completion will be able to handle four million TEUs (twenty-foot equivalent units) of cargo per annum. And also the first phase of the project is ready to handle one million TEUs per annum. In the first phase there will be 600 m Quay length and a draft of more than 15 m, when the terminal may handle 1 million TEU containers annually by the end of 2012. In the second phase the capacity will be enhanced to 3 million TEU's by the end of 2014. In the third phase the terminal may handle even up to 5.5 million TEU's.

FINANCING FOR THE PROJECT The total cost of the project is estimated at 3200 crore. The total cost of the first and second phase of the terminal is pegged at around Rs 6,250 crore.. The Dubai Port World India invested about 1600 crore rupees for the first phase of Vallarpadam Container Transshipment Terminal project. An equal amount was invested by central government to develop road and rail transportation facilities to Vallarpadam Container Transshipment Terminal. As per BOT policy the Vallarpadam Container Transshipment Terminal will be operated by Dubai Port World India for 30 years, After which the control will come back to the Cochin Port Trust. One third of total revenue will be given to Kochi Port Trust. All the expenses of Vallarpadam Container Transshipment Terminal is to be met by Dubai Port World India from the remaining revenue

PROJECT LAUNCH The Vallarpadam Container Transshipment Terminal inaugurated by Prime Minister Mr.Manmohan Singh , the Honble Prime Minister of India on February 11 , 2011. It was also Mr.Manmohan who put the foundation stone to the Vallarpadam Container Transshipment Terminal project early on 16th February 2005 during first UPA ministry in force.

EXECUTION OF THE PROJECT

First phase of development involves building 600m of quay, six shift-shore gantry cranes, 30 hectares of yard and acquisition of six Super Post Panamax cranes designed to handle some of the largest vessels. Second phase of development involves Construction of a 4 lane road between Vallarpadam and Kalamassery to handle the heavy traffic of the terminal, which will be known as NH-47 C. When completed the total cost is expected to be 1000 Cr. Out of the 17.2 km, around 9.25 km goes through bridges. There are 12 major bridges, 1 fly over, 25 box culverts and 14 pipe culverts and 5 under passes are constructed in the road to ease the traffic. Third phase of development involved construction of Rail Vikas Nigam Constructed a railway line to the Vallarpadam terminal with a total length of 8.86 km, in which 4.62 km through Vembanad bridge, which become the longest railway bridge in India. Also constructed a railway station and electric substation at Idappally. The Vallarpadam Port Railway station has been constructed by the Dubai Ports World.

CURRENT STATUS OF THE PROJECT Six months after its commissioning, the project is yet to commence actual operations. With hundreds of containers held up at ICTT and a number of International companies backing out, the terminal is in real crisis. As many as 416 containers are held up at ICTT for more than a month due to lack of feeder vessels. Already some international shipping companies- CMA CGM, Maersk and ZIM- which had begun mainline operations to ICTT Vallarpadam, went back to Colombo for transhipment due to the delay in sending containers from here to destination ports. While the terminal is projected to handle an estimate of 7.75 lakh TEUs (Twenty foot equivalent units) of containers in 2011, the 13 available Indian feeder vessels together has a capacity to carry only 12, 156 TEUs at any point of time. Also these 13 vessels, from SCI, Relay shipping, Gati, Seaways, Jindal and Caravel touch ICTT Vallarpadam only occasionally. Due to lack of feeder vessels, the container traffic has not increased much even after the commissioning of ICTT. Compared to the corresponding period last year, there is an increase of only about 4 percentage in container handling. It is much less than what is actually projected to achieve this year. The depth has not become an issue for vessels to call at ICTT.

CHALLENGES FACED BY THE PROJECT DURING ITS CONSTRUCTION Soil condition was a challenge to the engineers The soil conditions were a challenge that RVNL engineers overcame with great lan. The bridges have been built on 1.2-diametre piles driven to an average depth of 55 meters. The total pile length is 65,000 meters. Too much idle time at the berth because of frequent break down of obsolete equipment and no assured timing for container trains. Inadequate berth and dredging and absence of round-the-clock working in three shifts as well as lack of commitment to work 365 days in a year. Non-matching working culture of the customs department for commercial needs of the port and lack of integration of port and trunk railways.

SOCIAL BENEFITS OF THE PROJECT The completion of the ICTT project will reduce container traffic and save time. This Project will be a boost to Kochi and Kerala in all respects. Through Vallarpadam Container Transshipment Terminal project a number of job opportunities are also will be created.

THREATS FACED BY THE PROJECT

Privatization of infrastructure is to some extent the necessity in today's world. The government does not have sufficient funds to take care of every socio-regionaleconomical development and thus the time has come to involve private investors justify port operation from public monopoly to private monopoly. It is expected that private investors will ensure aggressive marketing and the best of technology to ensure faster throughput of containers through ICTT, Vallarpadam.

FUTURE OPPORTUNITIES Vallarpadam, ICTT will help bring trans-shipment of Indian cargo back to India. The strategic advantage of line owners to the international route will be fully utilized by this terminal. It helpful in bringing up India in the international maritime industry. It adjacent to the navigational channels and outer Harbor are the hotspots for development of port facilities and Port Based Industries. India's export-import business now depended on Colombo, Salalah and Singapore for container transshipment, and paid nearly $900 million last year in transshipment charges alone for the Colombo port.