Transhipment hub in Vizag a distant dream?

Visakhapatnam: In a country like India, developing a container transhipment hub would play a crucial role in accelerating the economic growth as it benefits diverse sectors such as forex savings, foreign direct investment, development of related logistics infrastructure, employment generation, logistics efficiencies and increased revenue share.

Besides, several other allied businesses such as distribution hubs, ship repair, crew change facility, logistics value-added services, warehousing hubs, rail connectivity and bunkering would thrive in the hinterland of the transhipment port.

At present, about 75 percent of India's transhipment cargo is handled at ports outside the country. The ports of Colombo, Singapore, and Klang handle more than 85 percent of transhipment cargo.

With a number of containers from Kolkata Port and Yangon Port heading to transhipment hubs of Colombo and Singapore, plans are in place to bring a chunk of the business to Visakhapatnam Port by developing conducive infrastructure for a container transhipment hub and multiplying the cargo traffic at a time when the Colombo port is struggling due to the economic crisis brewing in Sri Lanka.

Despite the geographical location that has turned out to be challenging, the Visakhapatnam Port Authority (VPA) is considering workable options to develop the port into a transhipment hub. "Europe and US vessels consider heading to the west coast of India rather than east coast because the route is quite feasible. However, we are considering various measures to boost trade volumes," shares VPA Chairman K Rama Mohana Rao.

As far as the logistics part is concerned, Rao explains that it would be economically much more viable if the port attends to both the mother and feeder container vessels at the transhipment hub. "If not all the containers from Kolkata and Yangon ports, the idea is to pull at least 20 percent of the business volume towards Visakhapatnam Port," he adds.

Meanwhile, the Ministry of Ports, Shipping and Waterways received suggestions from the stakeholders to make Visakhapatnam as a transhipment hub.

The Ministry of Ports, Shipping and Waterways clarified that at present, the proposals for developing Galathea Bay at Great Nicobar Island and Cochin Port into a transhipment facility have been taken up.

Further, the Ministry informed that the state government of Kerala in association with private investors and partial financial support from the Ministry of Finance is also developing a transhipment project at Vizhinjam in Kerala.

However, following the completion of expansion of Visakha Container Terminal Private Limited, a build-operate-transfer operator of VPA, with an estimated project cost of Rs.633.11 crore, Visakhapatnam Port can also be developed into a transhipment hub. But with the present focus on Galathea Bay and Cochin Port, when will Vizag follow suit has to be seen.