Markeystudy November2010

Kerala Port PPP Market Study
Final Report
November 2010
Prepared for:
International Finance Corporation
By:
Drewry Shipping Consultants Ltd

Drewry House, Meridian Gate South Quay
213 Marsh Wall, London E14 9FJ
Tel: +44 (0) 20 7538 0191
Fax: +44 (0) 20 7987 9396
E-mail: power@drewry.co.uk
www.drewry.co.uk
COPYRIGHT NOTICE
This report is for the sole use of the purchaser and is not to be copied or distributed
outside of the client organisation.
Contents
Contents
Page No.
Abbreviation
1-2
Section 1.
Executive summary
Part I
Container Traffic Analysis
Section 2.
Kerala economy overview
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Section 3.
3.1
3.2
3.3
3.4
3.5
3.6
Section 4.
4.1
4.1.1
4.1.2
4.2
4.2.1
4.2.2
4.3
4.3.1
4.3.2
Section 5.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Overview
Sectoral distribution of GSDP
Key industries
Infrastructure
Export and Import
Socio-economic scenario
Future development of Keralas economy-Key growth drivers
Investment Promotion
Historic container traffic analysis

Container Traffic Growth in India
Regional container traffic trend in India
Growth of container volumes key growth factors
Historic container traffic Equipment size analysis
Line wise container traffic share in India
Major container shipping trade lanes in South Indian Ports
Hinterland mapping
3-12
14-26
15
16
17
19
20
23
24
24
27-46
30
31
32
38
39
43
47-70
Karnataka
Key cargo centres
Industrial infrastructure
Tamil Nadu
Key cargo centres
Kerala
Key cargo centre
48
49
52
54
55
63
65
67
70
Port infrastructure
71-107
Competing port facilities

Projected development of container handling capacity at ports in India
Capacity projects at upper West Coast ports
Capacity projects at Greater Mumbai ports
Capacity projects at lower West Coast ports
Capacity projects at lower East Coast ports
Capacity projects at central East Coast ports
74
75
83
85
87
89
92
5.8
5.9
5.10
5.10.1
5.10.2
5.10.3
5.10.4
5.10.5
5.10.6
Section 6.
6.1
6.2
6.3
6.4
6.5
6.6
6.7
Section 7.
7.1
7.2
7.3
7.4
7.5
7.6
7.6.1
Section 8.
8.1
8.1.1
8.2
8.3
8.4
8.5
8.6
8.7
Contents
Capacity projects at upper East Coast ports

SWOT analysis of port facilities in Lower West & Lower-East India
Port competitive analysis
Rail and road connectivity analysis
Existing Connectivity at Indian ports
Future connectivity projects at Indian ports
Port efficiency
Competitive benchmarking of Vizhinjams competing Ports
Relationship of port operators with shipping lines and logistic companies
Transhipment traffic analysis Indian Subcontinent

Historic development of Indian subcontinent container traffic
Gateway volumes
Transhipment volumes
Regional capacities and facilities in the region
Ship size limitations at competing ports
Comparison of transhipment tariffs
Comparative hub port economics
Gateway container traffic forecast - India

Development of Indian container port market
Indian container port market forecast 2010 2044
Share of North West coast regions in Indias forecasted traffic
Share of Lower West & East coast regions in Indias forecasted traffic
Share of Central and Upper East coast regions in Indias forecasted traffic
Gateway container traffic forecast for Vizhinjam port
Perceived advantages and disadvantages of Vizhinjam port
Transshipment container traffic forecast Indian sub-continent

Colombo Competitive profile
Colombo SWOT Analysis
ISC Transshipment traffic forecast methodology
ISC Transshipment traffic forecast main assumptions
ISC regional gateway (import-export) volumes forecast
Target market for Colombo & Vizhinjam 2010-2044
Vizhinjam transhipment traffic forecast 2010-2044
Vizhinjam Container traffic forecast by container size
Section 9.
Vizhinjam vessel traffic forecast
Part II
Bulk & Non-Cargo Traffic Analysis
Section 10.
Coal traffic forecast
10.1
10.2
10.3
Coal import: Hinterland analysis

Logistics cost analysis
Section 11.
Steel scrap traffic forecast
94
96
98
99
101
102
105
105
107
108-134
111
116
119
122
126
127
128
135-169
136
141
148
154
160
164
168
170-205
171
174
175
175
177
188
195
202
206-210
212-220
213
217
219
221-223
Section 12.
12.1
12.2
Section 13.
13.1
13.1.1
13.1.2
13.1.3
13.1.4
13.1.5
13.1.6
13.2
13.2.1
13.2.2
13.2.3
13.2.3.1
13.2.3.2
13.2.4
13.2.5
13.2.6
Section 14.
14.1
14.2
14.3
14.4
Section 15.
15.1
15.2
15.3
Section 16.
16.1
16.2
16.3
16.4
Section 17.
17.1
17.2
17.3
Section 18.
18.1
18.2
18.3
18.3.1
Contents
Fertilizer and FRM

Introduction
Historical analysis
224-232
225
225
Chemicals and Petro products

Chemicals
Historical analysis
Hinterland mapping
Key Findings
Traffic at competing ports
Competitive port infrastructure
Forecast traffic for Vizhinjam Port
Petroleum products
Historical analysis
Petro products traffic at competing ports
Hinterland mapping
Refineries along western coast of southern India
Product pipelines in southern India
Competitive analysis for movement of petro products traffic
Key findings
Traffic forecast
Edible oil and DOC

Indian Edible oil and DOC Industry
Edible oil traffic in Kerala
Competitive analysis
Edible oil traffic and DOC Traffic Forecast for Port till 2043-44
Timber
233-256
234
234
236
236
237
239
242
243
243
245
247
247
248
249
252
253
257-263
258
260
261
261
264-270
Overview
Hinterland mapping
Traffic forecast
Raw Cashew
265
267
268
271-277
Introduction
Hinterland analysis
Raw Cashew import forecast
Coastal Shipping
Introduction
Existing coastal/rail/road movement in the hinterland of Vizhinjam port
Coastal traffic forecast
Cruise market
272
273
275
276
278-284
279
280
282
285-290
Overview
Advantages for local economy
Potential for Vizhinjam
Market Estimation
286
287
287
288
Section 19.
19.1
19.2
19.2.1
19.2.2
19.3
19.4
19.5
19.6
19.6.1
Contents
Ship repair market
Part III
Tariff and Revenues Forecast & Port Strategy
Section 20.
Competitive positioning and marketing
20.1
20.2
20.2.1
20.2.2
20.3
20.4
20.4.1
20.5
20.5.1
20.6
20.6.1
20.6.2
20.6.3
20.7
20.7.1
20.8
20.8.1
20.9
Section 21.
21.1
21.1.1
21.2
21.2.1
21.2.2
21.2.3
21.2.4
21.2.5
21.3
21.4
21.4.1
21.4.2
21.4.3
21.5
21.6
21.7
291-297
Overview
Ship Repair Market
Market drivers
Scheduled and unscheduled demand
Factor influencing capture rates for a yard. Scheduled and unscheduled demand
Types of repair dock
Repair yard basic needs
Opportunities for Vizhinjam
Infrastructure requirement
Strategy development approach

Port characteristics
Proposed port infrastructure (Based on Techno-economic feasibility report
prepared by L&T Ramboll)
Hinterland of Vizhinjam port
Business environment: Emerging opportunities
Porters Analysis
Positioning Strategy for Vizhinjam
Competitive advantage/disadvantage for Vizhinjam
Potential opportunity and core strategy
Potential opportunity for Vizhinjam port
Core Strategy
Port configuration for Vizhinjam multipurpose port
Ownership model
Ownership Model for Vizhinjam
Partnership and alliance
Role of Government
Marketing strategy
Tariff and Revenue forecast

Indian port tariff overview
Upfront tariff setting for PPP projects
Tariff for Container handling
Vessel related charges (VRC) for container vessels
Ports - container related tariffs
Royalty terms
Terminal storage charges
Terminal pricing & container volume demand
Revenue forecast for Vizhinjam from Container operations
Components of tariff: bulk cargo
Vessel related charges (VRC)
Cargo related tariffs
Tariff forecast
Revenue Forecast: Other than container handling
Total revenue from all port operations
Revenue from CFS operations
292
292
293
293
294
294
295
296
296
299-317
300
300
300
301
302
303
303
306
306
307
307
307
309
312
313
313
315
316
318-351
319
320
320
321
324
326
327
329
330
335
335
338
342
344
347
348
Contents
Annexure
352-357
Annexure 1 Port dues charges at select ports in India

Annexure 2 Comparison of berth hires fee at select ports in India (In US$/GRT/hr)
Annexure 3 Comparison of pilotage & towage fee at selected ports in India
Annexure 4 List of organisations contacted during market survey
352
353
354
355-357
Tables
Table 2.1
Table 2.2
Table 2.3
Table 2.4
Table 2.5
Table 2.6
Table 2.7
Table 2.8
Table 2.9
Table 2.10
Table 2.11
Table 2.12
Table 3.1
Table 3.2
Table 3.3
Table 3.4
Table 3.5
Table 3.6
Table 3.7
Table 3.8
Table 3.9
Table 3.10
Table 3.11
Table 4.1
Table 4.2
Table 4.3
Table 4.4
Table 4.5
Table 4.6
Table 4.7
Table 4.8
Table 4.9
Table 4.10
Table 4.11
Table 4.12
Table 4.13
Table 4.14
Table 4.15
Table 4.16
Table 5.1

Sector wise annual growth rate
Key industrial clusters in Kerala
Commodity-wise Export through Kochi Port 2002- 03 to 2008-09
Commodity-wise Import through Kochi Port 2002- 03 to 2008-09
Export of Cashew Kernels: Kerala and India (2003-04 to 2007-08)
Export of Cashew nut shell Liquid Kerala & India (2003-04 to 2007-08)
Import of Raw Cashew nuts: Kerala (2002-03 to 2007-08)
Export of Coir and Coir Products from India during 2005-06 & 2008-09
Item wise Exports of Marine Products from Kerala during 2005-06 and 2007-08
Birth & Death Rate and Life Expectancy in Kerala
Investment completed between March 2004-June 2009
Existing & proposed container handling ports in India
Port clusters in India & hinterland served
Traffic pattern of Indian container handling ports 1998 - 99 to 2008 - 09
Estimated share of container traffic per port, 1998 - 99 to 2008 - 09
Equipment size wise container traffic at Indian major ports
Trade lane wise growth rate in India
Trade lane wise market share in India for loaded containers
India World Base volume estimate for 2008
Portfolio of liner services at large Southern container handling ports (Jan10)
Trade lane wise break up of port traffic South India
Trade lane wise market share in South India for loaded containers
Total Karnataka Loaded container traffic handled (export + Import)
State-wise coffee production in 2008-09 (Est.)
Break-up of traffic handled by ICD Whitefield
Estimated loaded container traffic flow in Karnataka (FY08)
a. List of functional SEZ in Karnataka as on August 4, 2009
b. List of proposed SEZ
Loaded container traffic handled in Tamil Nadu (export + Import)
Commodity wise traffic break-up of Coimbatore, 2008
Estimated break-up of traffic handled at CFSs in Chennai (Jan-Jul09)
Share of major export/import commodities handled at Chennai
Estimated loaded container traffic flow in Tamil Nadu (FY08)
a. List of functional SEZ in Tamil Nadu as on August 4, 2009
Commodity-wise container traffic through Kochi in FY 2008 & FY 2009
Import and export of Cashew Cochin Port
Loaded container traffic (export + Import) in Kerala
Estimated loaded container traffic flow in Kerala (FY08)
List of functional SEZ in Kerala as on August 4, 2009
Existing and proposed container ports in India
16
17
18
20
21
21
21
22
22
23
23
25
28
29
34-35
36-37
38
40
41
43
44
45
46
49
49-50
51
52
52
53
55
56
58
59
62
63-64
64-65
66
66
67
69
70
72
Table 5.2
Table 5.3
Table 5.4
Table 5.5
Table 5.6
Table 5.7
Table 5.8
Table 6.1
Table 6.2
Table 6.3
Table 6.4
Table 6.5
Table 6.6
Table 6.7
Table 6.8
Table 6.9
Table 6.10
Table 6.11
Table 6.12
Table .6.13
Table 6.14
Table 6.15
Table 6.16
Table 7.1
Table 7.2
Table 7.3
Table 7.4
Table 7.5
Table 7.6
Table 7.7
Table 7.8
Table 7.9
Table 7.10
Table 7.11
Table 7.12
Table 7.13
Table 7.14
Table 7.15
Table 8.1
Table 8.2
Table 8.3
Table 8.4
Table 8.5
Contents
Overview of ports and facilities handling containers at the end of 2008 - 09

74
Development of capacity at Indian container handling ports FY09 to FY21
77-79
Capacity share of Indian container handling ports, FY09 FY21
80-82
Road distance between cargo centers and ports
103
Road haulage cost advantage/disadvantage for Vizhinjam port
104
Port performance indicators for competing facilities in South Indian region
105
Vizhinjams ports competitive analysis
106
Development of ISC container port volumes by country, 1997-2008 (teu)
114
Development of ISC container port volumes by port, 1997-2008 (teu)
115
Development of net ISC gateway (import-export) volumes, 1997-2008
117
Share of net ISC gateway (import-export) volumes (exc. Sri Lanka), 1997-2008
117
Estimated direct call v. feeder split of ISC gateway volumes
118
Development of transhipment volumes at ports within the ISC region,
1997-2008 (teu)
120
Development of total ISC-related transhipment volumes at hub ports,
1997-2008 (teu)
120
Matrix of hub port estimated transhipment volume by ISC feeder region, 2008
121
Comparison of key factors of regional hub ports competing with
Vizhinjam, 2008
123-124
Comparison of key factors of gateway ports competing with Vizhinjam, 2008
125
Comparison of key factors of spoke/feeder ports competing with Vizhinjam, 2008
125
Container ship size limitation at competing ports
126-127
Comparison of typical selected container transhipment tariffs, mid sized operator
128
Colombo/Vizhinjam v, Singapore: Selected spoke port distances
129
Colombo/Vizhinjam v, Dubai: Selected spoke port distances (nautical miles)
130
Shipping network cost analysis
132-134
Development of total Indian general cargo and container market (FY00 09)
138
Development of estimated share of total Indian break-bulk and container
traffic per region, FY 2000- 2009
139-140
High case scenario: Indias container traffic forecast
145
Base case scenario: Indias container traffic forecast
146
Low case scenario: Indias container traffic forecast
147
Growth of gateway container traffic in North West coast of India High case
151
Growth of container traffic in North West coast of India coast of India Base case
152
Growth of container traffic in North West coast of India coast of India Low case
153
Growth of container traffic in Lower West & East Coast of India High case
157
Growth of container traffic in Lower West & East Coast of India coast of India
Base case
158
Growth of container traffic in Lower West & East Coast of India coast of India
Low case
159
Growth of container traffic in Upper & Central East Coast of India High case
161
Growth of container traffic in Upper & Central East Coast of India coast of India
Base case
162
Growth of container traffic in Upper & Central East Coast of India coast of India
Low case
163
169
Development of container volumes in Colombo and share of traffic
between terminals
172
Forecast ISC region gateway volumes, 2010-2044
179
Forecast net ISC gateway (import-export) volumes by market area, 2010-2044 179-180
Forecast split of ISC gateway traffic by sub-region, 2010-2044
181
Forecast net ISC gateway volumes by type of traffic, 2010-2044
182
Table 8.6
Table 8.7
Table 8.8
Table 8.9
Table 8.10
Table 8.11
Table 8.12
Table 8.13
Table 8.14
Table 8.15
Table 8.16
Table 8.17
Table 8.18
Table 8.19
Table 9.1
Table 9.2
Table 9.3
Table 10.1
Table 10.2
Table 10.3
Table 10.4
Table 10.5
Table 10.6
Table 10.7
Table 11.1
Table 11.2
Table 12.1
Table 12.2
Table 12.3
Table 12.4
Table 12.5
Table 12.6
Table 12.7
Table 13.1
Table 13.2
Table 13.3
Table 13.4
Table 13.5
Table 13.6
Table 13.7
Table 13.8
Table 13.9
Table 13.10
Table 13.11
Table 13.12
Table 13.13
Table 13.14
Contents
Breakdown of forecast gateway teu, Pakistan, 2010-2044

Breakdown of forecast gateway teu, west coast India, 2010-2044
Breakdown of forecast gateway teu, south coast India, 2010-2044
Breakdown of forecast gateway teu, east coast India, 2010-2044
Breakdown of forecast gateway teu, Bangladesh, 2010-2044
Forecast volumes of ISC transhipment activity at hub ports, 2010-2044
Forecast volumes of ISC transhipment activity by ports for hubs outside
the ISC region, 2010-2044
Projected transhipment traffic of ISC feeder volumes by port via
Vizhinjam to 2044 Base case
Vizhinjam to 2044 High case
Vizhinjam to 2044 Low case
Projected Vizhinjam container traffic 2014- 2044
Vizhinjam container traffic 2014- 2044 by Equipment size Base Case
Vizhinjam container traffic 2014- 2044 by Equipment size High Case
Vizhinjam container traffic 2014- 2044 by Equipment size Low Case
Summary of current vessel sizes calling at ISC ports
Potential future vessel sizes calling at Vizhinjam port
Potential future vessel sizes calling at Vizhinjam port Base case scenario
Import of coal: All India
Coal handled at Indian ports in the hinterland
List of cement plants in the primary and secondary hinterland
Distance matrix of key cement plants
Cement production and consumption of Kerala
Logistics cost estimation for competitive port
Coal traffic forecast for Vizhinjam Port
Steel scrap consumers in the hinterland
Steel scrap handled at Indian ports in the hinterland
Indian fertiliser industry at a glance -Nutrient wise
Fertiliser consumption forecast for India
Fertilizer consumption in Vizhinjams hinterland - 2008-09
Fertiliser industry in Vizhinjams hinterland
Fertiliser imports in Vizhinjams hinterland
Road distances from competing ports in the hinterland (Km)
Fertiliser imports forecasts for Vizhinjam
Performance of Indian Chemicals and Petrochemicals Industry
State wise share of Chemicals Industry (2006-07)
State wise share of Petrochemical Industry (2006-07)
Chemical traffic at competing ports*
Competing ports chemical traffic as compared to Indias traffic
Comparison of infrastructure details at competing ports
Road distance matrix
Comparison of road transportation costs
Forecast chemical and petrochemical traffic for Vizhinjam Port
Growth of Indian petroleum industry at a glance
Trends in petro products traffic at competing ports*
Trends in LPG traffic at competing ports
List of existing product pipelines in Southern India
List of proposed product/gas pipelines in Southern India
183
184
185
186
187
189-191
192-194
197
198
199
200-201
203
204
205
208
208
210
213
214
215
216
216
218
219-220
222-223
223
225
226
227
228
230
230
231
235
235
235
238
238
239
240
241
242-243
244
245
246
248
248
Contents
Table 13.15 Comparison of transportation costs at supply points from normal sources
vis--vis Vizhinjam Port
251
Table 13.16 Total petro products sales across India
254
Table 13.17 Total petro products sales across Kerala
255
Table 13.18 Petro products traffic forecast for Vizhinjam Port
255-256
Table 14.1 Historical analysis of Edible Oil and DOC trade
258
Table 14.2 Per capita edible oil consumption
258
Table 14.3 Edible Oil Imports at various Ports
259
Table 14.4 DOC exports from various Ports
259
Table 14.5 Road distances from competing ports in the hinterland (Km)
261
Table 14.6 Edible oil import traffic forecast for Vizhinjam Port
262
Table 15.1 Production, trade and consumption of all timber by India
266
Table 15.2 Timber traffic at ports in the hinterland
268
Table 15.3 Timber traffic forecast for Vizhinjam
269
Table 16.1 Import of Cashews: India
272
Table 16.2 Export of cashew kernels from Kerala and India
272
Table 16.3 Cashew area, production, and yield
273
Table 16.4 Cashew processing units in India - 2005-06
273
Table 16.5 Keralas share in cashew import
274
Table 16.6 Distance matrix for Cashew processing units
274
Table 16.7 Inland Logistics cost of raw cashew import
275
Table 16.8 Inland Logistics cost of raw cashew import
275
Table 16.9 Raw cashew import forecast
277
Table 17.1 Existing coastal/rail/road movement in the region
280
Table 17.2 Movement of cement into Kerala
282
Table 17.3 Movement of rice into Kerala
282
Table 17.4 Total movement of wheat into Kerala
282
Table 17.5 Coastal traffic forecast: Vizhinjam port
284
Table 18.1 District wise break-up of tourists in Kerala in 2008
286
Table 18.2 Cruise vessels traffic forecast
290
Table 19.1 Ship repair infrastructure, revenue and direct expenses
297
Table 20.1 Port configuration and estimated cost of berths and cargo handling equipments
310
Table 20.2 Summary of revised cost estimates by L& T Ramboll
312
Table 20.3 Comparison of port ownership models
313
Table 21.1 Port dues at Vizhinjams competing ports
322
Table 21.2 Berth hire charges at Vizhinjams competing ports
322
Table 21.3 Pilotage & Towage fee at Vizhinjams competing ports
323
Table 21.4 Total Port disbursement fee at Vizhinjams competing ports
323
Table 21.5 Comparative container handling charges
325
Table 21.6 Royalty terms for major container terminals
327
Table 21.7 Free periods and storage rates for export teu at selected ports
328
Table 21.8 Cost analysis for export shipment from India to US East Coast
329
Table 21.9 Tariff forecast for vessel related charges
333
Table 21.10 Tariff forecast from container handling charges
334
Table 21.11 Revenue forecast for Vizhinjam
335
Table 21.12 Light dues Indian ports
336
Table 21.13 Port dues at competing ports of Vizhinjam
337
Table 21.14 Berth hire charges at competing ports of Vizhinjam
337
Table 21.15 Pilotage & Towage fee at competing ports of Vizhinjam
337
Table 21.16 Total Port disbursement fee at competing ports of Vizhinjam
338
Table 21.17 Total cargo handling charges for various commodities
340-341
Table 21.18 Vessel related tariff forecast: Vizhinjam Port
342
Table 21.19
Table 21.20
Table 21.21
Table 21.22
Table 21.23
Table 21.24
Contents
Cargo related tariff forecast: Vizhinjam Port

Revenue from Cargo related charges : Bulk handling at Vizhinjam Port
Revenue from Vessel related charges : Bulk handling at Vizhinjam Port
Sources of Revenue from bulk handling and cruise vessels at Vizhinjam Port
Total revenue from all sources (Container + other operations)
Traffic & Revenue Forecast from CFS operations at Vizhinjam
Base Case Scenario
343
344
345
346
347
350-351
Figures
Figure 2.1
Figure 2.2
Figure 3.1
Figure 3.2
Figure 3.3
Figure 3.4
Figure 3.5
Figure 3.6
Figure 4.1
Figure 4.2
Figure 5.1
Figure 6.1
Figure 7.1
Figure 7.2
Figure 10.1
Figure 12.1
Figure 12.2
Figure 13.1
Figure 13.2
Figure 13.3
Figure 14.1
Figure 15.1
Figure 16.1
Figure 17.1
Figure 17.2
Figure 17.3
Figure 18.1
Figure 18.2
Figure 20.1
Figure 20.2
Figure 20.3
Figure 20.4
Figure 20.5
Figure 20.6
Figure 20.7
Economic profile of Kerala

Industry attractiveness matrix for Kerala state
Indias historical container traffic growth rate (FY 99 FY 09)
Region-wise share of container traffic
Key growth factors
Trade lane wise port throughput share in India loaded boxes (2008)
Market share of major shipping lines in India- 2008
Market share of the major shipping lines on Southern coast of India
Coffee producing States/Districts and current share of ports
CFS clusters in Chennai region
Existing and proposed container handling ports in India
Gateway and hub container ports serving the ISC region
General cargo growth in India (FY2000-09)
Indian GDP and General cargo traffic: Estimating the trend line
Cement plants in primary and secondary hinterland
Vizhinjams hinterland for fertilizer consumption
Proposed Gas connectivity to fertilizer Industry in the hinterland
Primary and secondary hinterland mapping
Product pipelines in Southern India
Major economic supply zones for Vizhinjam Port
Change in Edible oil traffic after ban in Kerala
Share of timber traffic by ports in the hinterland
Hinterland of Vizhinjam port for Raw Cashew
Development of traffic : Coastal vs Exim
Indian coastal shipping Constraints & Impediments
Coastal Shipping potential
Break-up of foreign tourist arrival in 2008
Potential cruise routes
Existing Fishing Harbour at Vizhinjam
Proposed Vizhinjam port location
Hinterland of Vizhinjam
Porters Frame Work
Key Landlord functions
Port related activities beyond landlord function
Exports from functioning SEZs
15
26
30
31
33
40
42
45
50
60
73
113
136
141
214
228
229
236
249
250
260
267
275
279
279
281
287
289
300
300
302
303
313
314
316
Abbreviation
Abbreviation
AMR
South American
ANZ
Australia & New Zealand
AP
Andhra Pradesh
APMT
A P Moller Terminals
BOOT
Build Own Operate Transfer
BOT
Build Operate Transfer
CAGR
Compounded Annual Growth Rate
CBM
Cubic Meter
CEC
Central East Coast
CFR
Cost and Freight
CFS
Container Freight Station
CHA
Customs Handling Agent
CMA
Cement Manufacturers Association
CONCOR
Container Corporation of India
CSH
Common Secondary Hinterland
CWC
Central Warehousing Corporation
DFC
Dedicated Freight Corridor
DGCIS
Directorate General of Commercial Intelligence and Services
DMIC
Delhi Mumbai Industrial Corridor
DOC
De-oiled Cake
DPW
Dubai Ports World
DWT
Dead Weight Tonnage
EAF
Eastern Africa
EIA
Environment Impact Assessment
EUR
Europe
FC
Financial Closure
FCL
Full Container Load
FDI
Foreign Direct Investment
FEA
Far East Asia
FFE
Forty Foot Equivalent Unit
FOB
Free on Board
FY
Financial Year
GDP
Gross Domestic Product
GM
Greater Mumbai
GOI
Government of India
GoK
Government of Kerala
GPL
Gangavaram Port Ltd.
GRT
Gross Registered Tonnage
GSDP
Gross Domestic Product
GTIL
Gateway Terminals India Limited
GW
Giga Watt
HDS
Haldia Dock System
ICD
Inland Container Depot
IGF
Intra Gulf
INR
Indian Rupee
INSA
Indian National Ship owners Association
IPA
Indian Ports Association
ISC
Indian Subcontinent
JNPCT
Jawaharlal Nehru Port Container Terminal
Abbreviation
Contd
JNPT/JNP
Jawaharlal Nehru Port Trust
JV
Joint Venture
KDS
Kolkata Dock System
KINFRA
Kerala Industrial Infrastructure Development Corporation
Km
Kilo Metre
KPCL
Krishnapatnam Port Corporation Limited
KSCDC
Kerala State Cashew Development Corporation
LCL
Less than Container Load
LEC
Lower East Coast
LNG
Liquefied Natural Gas
LoA
Letter of Assurance
LOA
Length Overall
LWC
Lower West Coast
MbPT
Mumbai Port Trust
MCA
Model Concession Agreement
MICT
Mundra International Container Terminal
MMB
Maharashtra Maritime Board
Mn
Million
MPTA
Mumbai Port Trust Act
Mt
Million Tonne
MTPA
Million tonnes per annum
MW
Mega Watt
N&NW
North & North West
NAM
North America
NH
National Highway
NHAI
National Highway Authority of India
NMPT
New Mangalore Port Trust
NSDP
Net State Domestic Product
NSICT
Nhava Sheva International Container Terminal
POL
Petroleum & Other Lubricants
PPP
Public Private Partnership
PSA
Port of Singapore
RFQ
Request for Qualification
SAF
Southern Africa
SAGT
South Asia Gateway Terminal
SEZ
Special Economic Zone
SPV
Special Purpose Vehicle
SSI
Small Scale Industries
TAMP
Tariff Authority for Major Ports
TEU
Twenty Foot Equivalent Unit
THC
Terminal Handling Charges
TNEB
Tamil Nadu Electricity Board
UEC
Upper East Coast
USD
US Dollar
VCT
Vishakha Container Terminal
VLCC
Very Large Crude Carrier
WAF
Western Africa
WPI
Wholesale Price Index
YOY
Year on Year
Executive Summary
1. Executive summary
Introduction
International Finance Corporation (IFC) is advising Government of Kerala (GoK) on

structuring and implementation of a Public Private Partnership (PPP) project for
development of Vizhinjam port. IFC and GoK are interested in the evaluation of the market
potential for cargo handling at the proposed new port and the opportunity for private sector
participation in the project development and implementation.
Objective of the study
GoK is keen to develop Vizhinjam port on the PPP model and its main objectives include:
Development of modern deepwater port facility to improve the states transport

infrastructure.
Facilitating trade and attracting investment in the state.
Promoting private sector participation in port and transport sector.
Approach
The aim of the study is to assist in assessing the market feasibility of the proposed new
port at Vizhinjam and to provide an investment grade market study. To achieve this Drewry
has provided:
Historical traffic analysis to understand the regional trade and commodity profile.
Hinterland analysis to map the key consumption and production centres (Cargo
centres).
Container and bulk traffic forecast for the hinterland for 30 years.
Container transhipment market analysis and traffic forecast.
Analysis to assess the port competitive environment.
Identifying key advantages and disadvantages of Vizhinjam port.
Assessment of share of competing ports and Vizhinjam port in the expected traffic for
different cargoes over the forecast period.
Tariff review and analysis.
Strategy for capturing potential container and bulk traffic over the forecast period.
Executive Summary
Project overview
Phase 1
FY 14-20
Phase 2
FY 21-FY 30
Phase 3
FY 31-FY 44
Gateway Container Traffic (mn Teu)
0.1
0.4
0.8
Transshipment container Traffic (mn Teu)
0.7
1.3
2.1
Bulk Traffic (mn Tons)

Cruise vessels (no.)
0.6
1.3
2.6
30
60
120
Sub Total excluding cruise (million tonnes)*
12.5
25.7
43.5
No. of Container Berths

No. of General Cargo Berths
No. of Cruise Berth
No. of Liquid Berth
2
1
1
-
2
1
3
1
-
Sub Total
Infrastructure
110.3
46.2
178.8
Superstructure
Land Reclamation
14.0
9.6
52.7
43.1
30.3
98.7
Berth and Equipments
169.7
213.6
399.6
Sub Total
337.1
299.7
729.8
PV of estimated investment (@10%)**
337.1
153.8
144.4
Estimated cumulative revenue for each phase

from all sources in base case (USD Million) **
188.3
965.6
3,826.7
PV of estimated revenue (@10%)**
119.0
279.3
358.0
Terminal Year Base Case Traffic
Port Configuration (No. of Berths to be added)
Estimated Investment (Mn USD)**
Note: * 1 Container = 14.5 tonnes (Base Case)

** Provisional Estimate
Source: Drewry Research, IFC, L& T Ramboll Techno-commercial Feasibility Report
Key Findings of the study
Economy
The economy of Kerala registered a steady growth of 8% between 1999-00 and 200708.The secondary sector registered the highest growth rate of 17.9% as compared to
the tertiary sector (9.6%) and primary sector (2.5%) in 2007-08 over preceding
financial year. As a result the share of secondary sector has gone up from 20% in
1999-00 to 28% in 2007-08 at the expense of fall in share of primary sector. However,
service sector has maintained its dominance, accounting for 58% share in NSDP in
2007-08.
Executive Summary
Coir, Cashew nut processing, Seafood, Tourism, IT and ITES are major industries of
Kerala.
Kerala has received around USD 1.4 billion of investment over the last 5 years with
service sector accounting for more than 50% of the total investments made, followed
by manufacturing and construction sector at around 22% and 12% respectively.
Container
Historic container traffic analysis
Container Ports in India can be divided into following 6 clusters
Upper West Coast Ports in Gujarat
Greater Mumbai region- Ports in Mumbai and southern Maharashtra
Lower West Coast Ports in Goa, Karnataka and Kerala
Lower East Coast- Ports in Tamil Nadu, Pondicherry and Krishnapatnam
Central East Coast- Ports in Andhra Pradesh (excluding Krishnapatnam)
Upper East Coast Ports in Orissa and West Bengal
Indian container traffic has grown at an average growth rate of 14% over the past ten
years primarily driven by growth in hinterland traffic. Currently, top 3 container ports
i.e. JNPT, Chennai & Mundra control almost 77% of Indias container traffic.
Vizhinjam port falls in the lower west coast region which has lost market share in the
overall gateway container traffic handled in India because of higher growth and
containerisation in other regions.
Hinterland Analysis
Tamil Nadu, Andhra Pradesh, Karnataka and Kerala are the four major south Indian
states in decreasing order of total container traffic potential which contribute container
traffic to the ports on the lower east coast and the lower west coast of India.
Keralas containerised commodities are primarily coir, rubber, cashews and other
agricultural goods. The primary hinterland of Vizhinjam would be the state of Kerala
whereas secondary and distant hinterland would be the cargo centres which are
contested by existing container handling ports in Southern India. Vizhinjam port has a
distance/cost advantage for cargo centres in Southern Kerala vis--vis Cochin and
Tuticorin ports. These regions would therefore be the core of the gateway target
market.
Vizhinjam port faces stiff competition from existing and upcoming facilities in the
region which share a large common hinterland. The current supply demand scenario
in lower west coast suggests underutilisation of existing capacity. The expected traffic
growth in the region is unlikely to absorb new capacities, thus this problem is likely to
continue over short and medium term.
Executive Summary
Transhipment traffic analysis Indian Subcontinent
The Indian subcontinent (ISC) gateway container volumes have increased from 4.3
Mn Teu in 1997 to 14.7Mn Teus in 2008. The west coast of India contributes the
largest share (50%) of container traffic in the region. Almost 66% of the gateway traffic
is served through feeder services and rest 31.5% is carried on mainline vessels in the
region.
Colombo is the largest transhipment hub for ISC traffic in the region and handles
around 35% of the total ISC transhipment traffic, 4.1% of the transhipment volume is
handled by ports within the ISC while almost 61% of the balance transhipment traffic
of the region is handled by hub ports outside ISC, namely Singapore, Salalah, Jebel
Ali, etc.
The west coast of India and Pakistan combined provides the largest container traffic
market in the region. Lines have increased direct calls to these ports and transhipment
incidence in these regions has steadily decreased over the years. Currently, an
estimated 12-15% of the total traffic of this region is a potential transhipment target
market.
Currently, transhipment traffic volumes from south India and east coast of India are
60% and 70% respectively of the gateway traffic. Similarly, around 95% of
Bangladeshs gateway traffic is transhipped at various hub ports in the region.
Vizhinjam port faces competition for a transhipment market not only from the port of
Colombo but also from major transhipment hubs outside the ISC region. However, the
east coast of India, Bangladesh and south coast of India will be the target market of
transhipment traffic for Vizhinjam.
Gateway container traffic forecast
In the base case scenario, Indias GDP is expected to grow at 6.4% over the forecast
period FY 2010-2044. During this period, Indias containers gateway traffic is forecast
to grow at 7.5. % p.a. from 7.9 Mn Teu in FY 10 to 91 Mn Teu in FY 44. North West
India would continue to dominate the container traffic handling volumes with estimated
60% of the forecast traffic in FY44 handled at Maharashtra and Gujarat ports.
Lower west coast region would have a small share of 12% in the Indian gateway
container traffic primarily due to low container traffic development in the immediate
hinterland of the region.
Vizhinjam is most likely to attract gateway container traffic from its immediate
hinterland which it shares with the Cochin port.
In the three growth scenarios, namely, high, base and low case, the gateway
container traffic in the period 2014-44 at the proposed Vizhinjam port is forecast to
grow from approximately 38,000 Teu to 0.92 Mn Teu, 0.76 Mn Teu and 0.72 Mn Teu
respectively.
Transhipment Traffic forecast
Colombo port is the primary competitor for Vizhinjam port for the transhipment market.
Current market dynamics suggest that it is only the ISC transhipment traffic market
that can be catered to by the port.
Executive Summary
The gateway traffic for ISC region in the base case scenario is estimated to grow from
12 Mn Teus in FY 10 to 120 Mn Teus in FY44. However, the total share of feeder
traffic is estimated to decrease from 30% to 16% during the same period.
The total available feeder market is expected to increase from 7.2 mn Teu in FY10 to
38.7 Mn Teu by FY44. The current share of Colombo in this market is approximately
38%.
Market share in the transhipment market is driven by total network costs. Vizhinjam
will have to offer rates that are lower than those applicable at Colombo in order to
secure share. This will depress profitability and attractiveness to private sector
operators.
The share of hub ports outside ISC in the overall ISC transhipment market is expected
to decline from 60% to 50% by FY 44, while the combined market share of Vizhinjam
and Colombo is likely to increase to around 44% over the same period.
In base case scenario (which assumes that Vizhinjam is price competitive),

Vizhinjams transhipment traffic is expected to reach 2.0 million Teus by FY 44, whilst
in high case this is likely to be around 3.0 million Teus.
Total container traffic in base case scenario for Vizhinjam port is expected to increase
from 0.15 million Teus in FY14 to 2.8 million Teus in FY44. It is estimated the total
number of container vessel calls would increase from 2 calls/week in 2014 to 19 calls
per week in 2044.
Container traffic forecast

3,000
2,500
'000 Teu
2,000
1,500
1,000
500
0
FY14
FY16
FY18
FY20
FY22
FY24
FY26
Gateway
FY28
FY30
FY32
Transhipment
FY34
FY36
FY38
FY40
FY42
FY44
Total
Source: Drewry Research
Dry Bulk Traffic
The potential for coal traffic at Vizhinjam port is very low mainly because of scanty
presence of coal consumers in the hinterland. There is no existing or planned thermal
power plant and integrated steel plant in the hinterland. Cement plants are the largest
coal consumers in the region. However, these are in proximity of two competing ports.
Executive Summary
As a consequence, in base case scenario coal traffic is expected to be stagnant in the

forecast period at around 0.14 million tonnes.
Fertilizer plants in Kerala and Tamil Nadu are operating at around 30% utilisation rate.
This utilisation rate is expected to improve significantly after their connectivity to under
construction gas grid, resulting in reduction in demand for imported fertilisers. Under
the base case scenario, Vizhinjam port is likely to attract 540,000 tonnes of cargo in
the terminal forecast year. A major share of this cargo is likely to be diverted from
Tuticorin port.
Liquid Bulk Traffic
Owing to negligible presence of chemical and petrochemical industries, around

Vizhinjam, limited volume of the traffic is expected to move to Vizhinjam Port. In the
base case scenario, the potential for chemical cargo at Vizhinjam Port in FY 2013-14
is forecast at 6,000 tonnes in 2013-14. This is estimated to rise to 72,000 tonnes in
2043-44.
Currently, petroleum product demand in the primary hinterland is mainly being served
by Kochi, New Mangalore and Tuticorin Ports. It is estimated that with required
infrastructure development, Vizhinjam Port could take around 15.0% of the petroleum
product imports handled by competing ports. Total petroleum product traffic is
expected to rise steadily over the forecast years, reaching slightly above 1.0 million
tonnes FY 44.
Few national and international firms engaged in the storage business of liquid bulk
(petro products and LPG) have shown interest in putting up tanks at Vizhinjam Port. It
has not been taken into account for traffic forecast due to lack of sufficient information.
Potential for Edible oil traffic at Vizhinjam port is very limited, as the key importers are
concentrated in the Ernakulam and Kozhikode district. In the base case scenario,
Vizhinjam port is estimated to attract approximately 25,000 tonnes in the terminal year
of forecast.
General Cargo
There are over 200 saw mills spread across Kerala and parts of Southern Tamil Nadu.
Currently, these saw mills are importing timber at Mangalore, Cochin and Tuticorin
Ports. At the terminal forecast year, hinterland timber traffic is estimated to reach over
1 million tonne. With efficient cargo handling facility and adequate storage space,
Vizhinjam is expected to take around 10% share of the total traffic in the hinterland,
which would roughly give it a volume of 100,000 tonnes.
Kerala accounts for more than over 50% of raw cashew imports in India. Vizhinjam is
quite strategically located close to major cashew processing clusters in Kerala. It has
Kollam to its north at a distance of 80 kms and Nagercoil to its south at a distance of
63 km. Currently, most of the requirements of raw cashew imports in this region are
met through Tuticorin and Cochin port respectively. By virtue of its locational
advantage Vizhinjam port can become a good alternate port for handling break bulk
shipments of raw-cashew from Africa. In a base case scenario, it is estimated that
Vizhinjam port can attract raw cashew traffic of around 133,000 tonnes in 2043-44 in
break-bulk vessels.
Executive Summary
Coastal
As Kerala is not self sufficient in cement, rice, wheat and construction materials like
marbles and tiles, these commodities are transported from northern part of the
country via rail and road. The issues like fragmented market, multiple handling, more
time taken in transit, requirement of door to door services, and lack of return cargo are
some of the factors which may hinder surge in coastal shipping. But with policy
changes coastal shipping is expected to take off from northern ports to southern ports
of Karnataka and Kerala. According to the Drewry estimate, coastal traffic of cement
is expected to grow at a CAGR of 7% from 51.8 thousand tonnes in 2007-08 to 505.5
thousand tonnes in 2043-44.
1,051
Bulk Traffic forecast

1,200
318
600
498
536
674
800
2013-14
Coal
POL
2028-29
6
18
72
64
141
141
141
0
11
27
Edible Oil
Chemical
147
Fertilizer
49
86
133
Timber
200
0
173
400
90
104
'000 Tonnes
1,000
Raw
cashew
Cement
2043-44
Cruise
Considering the past trends and the market potential, Vizhinjam port can expect to
handle around 30-35 cruise vessel calls/ annum in the initial years of operations,
which could eventually increase to around 120-130 calls per annum in the long run.
Further, if Vizhinjam can develop adequate port and supporting infrastructure then it
may be considered by some of the big operators also and that can assist in attracting
some of the larger ships having capacity in the range of 2,000-3,000 passengers.
Cruise tourists have high disposable income and propensity to spend on leisure
activities and shopping. As per industry estimates, average passenger spend per port
is around USD 100-120. This will give general boost to the local economy
Ship repair
The key determinant of shiprepair demand is the shipping that is active within the
vicinity of the proposed yard. Vizhinjam location means that it potentially will benefit
from traffic calling at ports on the lower west coast of India. Additionally, Vizhinjam will
have considerable shipping passing through main East West shipping route.
Executive Summary
Vizhinjam is between two already established repair facilities i.e. Dubai and
Singapore. To compete with established repair facilities Vizhinjam will have to
establish trained and motivated workforce with superior independent inspection
/quality control department.
With increasing global fleet size demand for ship-repairs is expected to grow thus
providing new opportunities for existing and new ship-repair yards. However, the
competition is quite intense. Yard which can offer shorter repair duration at a
competitive price will enjoy a competitive advantage. To effectively compete with the
existing facilities in the region and to provide a good alternate for the vessels in the
target market, Vizhinjam may have to opt for at least 2 graving docks capable of
handling Panamax vessels along with 4 land berths.

Vizhinjam port will face intense competition from the existing ports in the region and will
have to adopt proactive strategies to attract cargo from its immediate and secondary
hinterland. Similarly, for container transshipment traffic, Vizhinjam port will be in direct
competition with Colombo port. .The competitive scenario in which the Vizhinjam port will
operate can be broadly described as follows:
Intense Rivalry among the existing players
Strong threat of a new entrant
Medium threat of substitute
Strong Bargaining power of users
Moderate Bargaining power of service providers

To mitigate market and financial risks Vizhinjam Port should differentiate its services by
developing a modern and efficient Multipurpose Port for handling container and general
cargo traffic along with non-cargo vessels. The port development plan should provide the
flexibility of expansion in the future on the basis of the growth in traffic and demand from
various users. The proposed positioning strategy is aimed at addressing some of the
following key issues:
Alternate gateway port to serve shippers in the hinterland. Multipurpose port provides
the flexibility to handle optimum cargo mix to maximize traffic volumes and revenue.
Impetus for economic development in the Southern Kerala.
Port infrastructure to complement local economic activities and to provide

opportunities for additional direct and indirect employment for the local population.
Limiting the initial capital expenditure on port infrastructure and superstructure thereby
reducing risk.
10
Executive Summary
Core Strategy
Considering both obvious and latent traffic potential, Vizhinjam Ports core strategy could
include the following:
Develop an efficient multi-purpose port to provide container and bulk/general cargo

handling infrastructure.
Tap general cargo and container traffic being generated in the immediate and
secondary hinterland by delivering reliable efficient cargo handling services.
Strategic partnership with key players like shipping lines, terminal operators, service
providers, shippers.
Leveraging proximity to East-West shipping route for attracting transhipment container

traffic at Vizhinjam port subject to profitability.
Establish new cruise terminal to attract potential cruise vessel traffic.
Ownership Model for Vizhinjam
Landlord port model has gained popularity and have proved to be quite successful.
Some of the leading ports like Rotterdam, Antwerp and Singapore have adopted this
structure and have benefited from public-private partnership. This assists in attracting
necessary private investments in port development and also results in higher
efficiency in port operations. Considering this, Vizhinjam port can also adopt a
Landlord model for development of a proposed multi-purpose port. As a Landlord port
Vizhinjam port is expected to perform following functions :
Development and maintenance of marine infrastructure
Marine services
Harbour Master
Berth construction and concession
Some of the potential partners for Vizhinjam port development could include the
following:
Industry Players: terminal operators, shipping lines
Government
Banks and Financial Institutions (including port infrastructure funds)
International Development and multilateral financial institutions
Tariff and Revenue
In India, there are primarily three components of port tariff, namely vessel related
charges (Port Dues, Berth Hire, Pilotage and Towage and Light Dues), cargo related
charges (Wharfage, Stevedoring/cargo handling charges), and miscellaneous charges
(lighthouse charges etc.).
11
Executive Summary
Based on shipping line network cost estimates, Drewry suggests that Vizhinjam offer a
container transhipment tariff at 60% of the current published tariff being levied for
container operations at the Colombo port. As the traffic builds up, Vizhinjam port can
review the tariff and reduce the margin of discount offered vis--vis Colombo port.
Suggested bulk cargo and vessel related charges at Vizhinjam Port are in line with the
prevailing tariff at Tuticorin port.
Annual tariff escalation is based on 60% of estimated WPI. Based on this the total
revenue from all sources is estimated to go up from USD 9.65 million in 2013-14 to
USD 407.59 million in 2043-44. This assumes base case traffic scenario for all the
cargoes and that all the services are provided by one entity.
12
Part I
13
Kerala Economy Overview
2. Kerala economy overview

This section presents the overview of the economy of Kerala including industrial
development, infrastructure, and social development.
Key findings
Kerala has been on a steady growth path registering a CAGR of 8%, consequently
increasing its share in the national economy to over 4.4% in 2007-08 from 4.0 % in
1999-00.
The secondary sector registered the highest growth rate of 17.9% as compared to the
tertiary (9.6%) and primary sector (2.5%) in 2007-08 over preceding financial year.
The contribution of tertiary sector has gone up from 29% in 1960 to over 58% in
2007-08. Therefore, from an economy driven by primary sector in 1960, it has
become a service oriented economy.
Major industries: Coir, Cashew nut processing, Seafood, Tourism, IT and ITES.
Major export commodity: Sea Foods, Coir Products, Coffee, Tea, Cashew Kernels,
and Spices.
Major import commodity: Fertilizers & Raw materials, Iron, Steel & Machinery, Raw
Cashew nut, Food grains, and Newsprint.
14
2.1
Overview
Kerala has been on a steady growth path registering a CAGR of 8%, consequently
increasing its share in the national economy to over 4.4% in 2007-08 from 4.0 % in 199900.
Figure 2.1
Economic profile of Kerala
a. Growth of NSDP at factor cost (INR Million)
1,200,000
12%
1,000,000
10%
0%
2007-08
0
2006-07
2%
2005-06
200,000
2004-05
4%
2003-04
400,000
2002-03
6%
2001-02
600,000
2000-01
8%
1999-00
800,000
b. Structure of the economy
15%
27%
58%
Primary
Secondary
Tertiary
State domestic product (INR Million)

Annual grow th rate (Right axis)
Share in NDP of India (Right axis)
c. Share of various industries
26%
2%
69%
3%
Mining & quarrying
Manufacturing
Construction
Electricity,gas and Water supply
Source: MOSPI
15
2.2

During 2007-08, the contribution from primary, secondary and tertiary sectors to the Gross
State Domestic Product (GSDP) at constant (1999-2000) prices, constituted 15%, 26.8%
and 58.2% respectively. At current prices the primary, secondary and tertiary sectors
contributed 16.8%, 26.4% and 56.8% respectively to the GSDP during the same financial
year. While analysing the sectoral distribution of sate income it is seen that the contribution
from primary sector is decreasing and secondary sector slightly increasing. But tertiary
sector remained almost same level of about 58 percent in the last three years. The details
of sectoral distribution of GSDP with percentage during the last three years are given in
the following Table 2.1.
Table 2.1
INR Million
At Current Prices
Sector
2005-06
2006-07
At Constant Prices
2007-08
2005-06
2006-07
2007-08
GSDP
GSDP
GSDP
GSDP
GSDP
GSDP
Agriculture & Allied

Activities
1,699
13.5
1,956
13.7
2,165
13.3
1,458
14.1
1,498
13.1
1,518
12.0
Forestry & Logging
150
1.2
168
1.2
186
1.1
127
1.2
139
1.2
146
1.2
Fishing
248
2.0
264
1.9
273
1.7
147
1.4
155
1.4
157
1.2
70
0.6
82
0.6
114
0.7
48
0.5
54
0.5
71
0.6
Sub Total: Primary
2,168
17.4
2,471
17.3
2,739
16.8
1,781
17.3
1,846
16.1
1,892
15.0
Manufacturing
1,010
8.1
1,198
8.4
1,372
8.5
806
7.8
914
8.0
1,014
8.0
242
1.9
260
1.8
282
1.7
194
1.9
199
1.7
209
1.6
Construction
1,735
13.9
2,120
14.9
2,628
16.2
1,493
14.5
1,770
15.5
2,162
17.1
Sub Total:
Secondary
2,987
24.0
3,577
25.1
4,283
26.4
2,493
24.2
2,883
25.2
3,385
26.8
Transport, Storage
and Communication
1,269
10.2
1,412
9.9
1,595
9.8
1,237
12.0
1,397
12.2
1,620
12.8
Trade, Hotel &

Restaurant
2,605
20.9
2,935
20.6
3,326
20.5
2,085
20.2
2,298
20.1
2,501
19.8
601
4.8
712
5.0
801
4.9
532
5.2
638
5.6
668
5.3
1,245
10.0
1,413
9.9
1,622
10.0
909
8.8
1,023
8.9
1,159
9.2
Public
Administration
612
4.9
715
5.0
783
4.8
491
4.8
562
4.9
592
4.7
Other Services
952
7.7
1,012
7.1
1,094
6.7
781
7.6
804
7.0
828
6.5
7,284
58.7
8,199
57.6
9,220
56.8
6,035
58.5
6,723
58.7
7,369
58.2
12,439
100.0
14,247
100.0
16,241
100.0
10,308
100.0
11,452
100.0
12,645
100.0
Mining and
Quarrying
Electricity gas &

Water supply
Banking and
insurance
Real estate
ownership,
Business, Legal
Sub Total: Tertiary

Total GSDP
Source: Department of Economics and Statistics
16
In a nutshell, as an economy develops the share of tertiary sector increases with the fall in
the share of primary sector. Kerala has witnessed this pattern of growth. The contribution
of tertiary sector has gone up from 29% in 1960 to over 58% in 2007-08.
The disaggregated analysis of growth at constant prices reflects that the secondary sector
(17.9%) in Kerala grew at the highest rate as compared to the tertiary (9.6%) and primary
sector (2.5%). In terms of current prices as well, secondary sector recorded the highest
rate of growth 19.7 per cent in 2007-08.
Table 2.2
Sector wise annual growth rate
At Current Prices
At Constant Prices (1999-00)
2005-06
2006-07
(P)
2007-08
(Q)
2005-06
2006-07
(P)
2007-08
(Q)
12.5
15.2
10.7
3.5
2.7
1.4
Forestry & Logging
12.5
12.1
10.5
1.6
9.7
4.7
Fishing
36.8
6.5
3.2
-4.3
5.5
1.0
Mining & Quarrying
50.7
16.6
39.8
46.0
12.4
31.5
Primary Sector
15.8
14.0
10.8
3.5
3.7
2.5
Manufacturing
10.6
18.6
14.6
6.9
13.5
10.9
Electricity, Gas & water supply
11.3
7.4
8.4
7.7
2.7
5.0
Agriculture & Allied Activities
Construction
22.7
22.2
24.0
22.4
18.5
22.0
Secondary Sector
17.4
19.8
19.7
15.8
15.7
17.4
Transport, Storage and
7.5
11.3
13.0
9.7
13.0
16.0
16.2
12.7
13.3
12.0
10.2
8.8
Communication
Trade, Hotels & Restaurant
Banking, Insurance and Real Estate
-0.4
18.4
12.5
5.9
19.9
4.7
Real estate ownership, Business,
16.5
13.5
14.8
11.1
12.6
13.3
3.5
16.8
9.6
1.1
14.3
5.5
Other services
3.3
6.3
8.1
1.2
3.0
3.0
Tertiary sector
10.2
12.6
12.5
8.4
11.4
9.6
GSDP
12.8
14.5
14.0
9.2
11.1
10.4
Legal
Public administration and other
services
Source: Department of Economics and Statistics
2.3
Key industries
The small scale industries in Kerala contribute around 40% to industrial production and
35% to exports. Around 0.2 million working small scale industries (SSI) were registered in
Kerala as of March 2008. The number of large and medium undertakings as of March
2009 was 730, with around 80% in the private sector. Keralas traditional industries include
handloom, cashew, coir and handicrafts.
17
Table 2.3
Key industrial clusters in Kerala
District
Industries
Kannur
Handlooms, Power, Bedi
Allepey
Coir products
Idukki
Agriculture and Forest Based
Thiruvananthapuram
Handlooms
Thrissur
Power Looms, Handlooms, textile, Timber, tile
Palakkad
Power Looms, sericulture
Kollam
Cashew Processing units, Minerals and Mining
Kozhikode
Rubber
Wayanad
Minerals and Mining
Kottayam
Rubber, food products, engineering
Ernakulam
Information Technology
Coir Industry
Coir industry is a traditional, labour intensive, export oriented and agro-based cottage
industry. Coir fibre is extracted from the outer cover of the coconut - coconut husk. Kerala
is the largest producer of white fibre and other States like Tamil Nadu, Karnataka and
Andhra Pradesh are producing brown fibre. Coir Industry is one of the major traditional
industries in Kerala, giving employment to 0.383 million workers and 76% of them are
women. Coconut is a major cash crop in Kerala and it has a great influence on the
economy. 30% of land is under coconut cultivation.
The exporters of Coir products can be categorized into two categories - manufacturer
exporters and merchant exporters. The merchant exporters are exporting coir products
sourced from other units. The Coir industry depends heavily on the export market. USA is
the biggest importer of Coir Products from India, followed by UK, Germany, Netherlands,
Spain, Italy, Canada, France, Australia and Belgium. The export market of Coir and Coir
Products from India during 2007-08 was 187,566.74 tonnes valued at INR 5,928.8 million
as against 168,754.75 tonnes valued at INR 6,051.65 million in 2006-07.
Cashew Industry
The total export of cashew kernels from India during 2007-08 was 11,4340 MT, valued at
INR 2289 million in comparison with the export of 118,540 MT cashew kernels valued at
INR 24550 million during 2006-07. Details of export of cashew kernels from Kerala and
India from 2000-01 to 2007-08 are given in Table 2.6 and 2.7. The Kerala State Cashew
Development Corporation (KSCDC) and Cashew Workers Apex Cooperative Society
(CAPEX) are the two State agencies engaged in the cashew processing sector in Kerala.
KSCDC owns 30 cashew factories spread out in the districts of Thiruvananthapuram,
Kollam, Alappuzha, Thrissur and Kannur. In KSCDC there are about 15,000 workers and
majority of them are women. KSCDC exports cashew kernels and cashew shell liquid.
Raw nuts are mainly imported to supplement the local availability (See Table 2.8). CAPEX
is the apex society of cashew workers primary societies with headquarters at Kollam. The
Society owns 10 factories. There are about 4,000 workers and 225 staff under this apex
society. CAPEX incurred a loss of INR 41.78 million in 2007-08 while it was INR 61.56
million in 2006-07.
18
Tourism industry
Tourism industry plays a very vital role in Keralas economy and contributes almost 8% to
the state GDP. In 2008, the foreign exchange earnings from tourism grew by 16.1% to
USD 750 million.
Kerala, promoted as Gods Own Country is blessed by nature with diverse geographical
features like beaches, hill stations, backwaters, national parks & wild life sanctuaries. Its
unique culture and traditions, coupled with its varied demography has made Kerala one of
the most popular tourist destinations in the world.
In addition to traditional sectors, Kerala has also emerged as centre for IT industry. The
state has Technopark at Tiruvananthapuram and Infopark at Kochi. A cyber park at
Kozhikode is under construction. In addition to this the state has private IT parks also like
smart City Kochi, L&T Park and Muthoot Park.
Kerala Industrial Infrastructure Development Corporation (KINFRA)
KINFRA, the premier Industrial Infrastructure development agency of the State has been
following a conscious effort towards developing industrial infrastructure in the State,
specifically
aimed
at
economic
development
by
setting
up
industrial
parks/Townships/Zones etc which provide all facilities required for entrepreneur for starting
industries in the thrust sectors identified in the Industrial Policy.
New Projects of KINFRA
Electronics Park in 450 acres of land in Mangaswaram, Kasargode district
Industrial Park in 100 acres of land in Ottappalam, Palakkad District
Expansion of Textile Centre at Nadukani, Kannur,
Food Processing Park in 50 acres of land at Konni in Pathanamthitta District
Footwear Industrial Park in 50 acres of land at Kozhikode.
Kinfra has Industrial Park in various parts of Kerala with 313 operating units and an
investment of Rs.668 crores and provided employment to 19304 persons during the period
under review.
2.4
Infrastructure
Road Network in Kerala
Kerala had a total road length of 173,592 km during 2007-08 where as the total road
length during 2006-07 is 162,149 km showing an increase of 7.06 %. Road density in the
state during 2007-08 was 446 km/100sq.km and is much more than the road density over
the previous year (417km/100sq.km).
Railways in Kerala
There are 2000 Railway stations in Kerala. This extensive network connects places both
within and outside the state of Kerala. Local train services and long distance express trains
ply all over the state making it a convenient and quick method of transport. Long distance
trains connect the state to major Indian cities like Kolkata, Coimbatore, Chennai,
Hyderabad, Mumbai, and New- Delhi. They also connect Jammu and Kashmir and the
North-East.
19
The entire length of the rail route is around 1,148 km and covers 13 Railway routes within
its fold. The Railways in Kerala connect it to other states, the Kollam-Madurai and the
Shornur-Erode Railway lines are important rail routes. The Railway divisions at
Thiruvananthapuram, Palakkad and Madurai, jointly carryout transport operations in
Kerala.
Kerala Port Sector
Along its coastline of 585 km Kerala has one major port at Cochin and 17 non major ports.
The non major ports are under the administration of Government of Kerala. Government of
Kerala intends to provide a boost to coastal shipping with the development of ports, which
will ease the burden on the heavily congested highways in the State apart from savings in
transportation cost. Government, besides acting as a catalyst for establishment of ship
repair and ship building industries, would also encourage other port based industries
contributing to the development of ports. Kerala government is in the process of
modernizing ports at Azhikkal, Beypore and Alappuzha.
2.5
Export and Import

Kerala exports cashew, coir and coir products, tea, marine products and spice oils, pepper
and oleoresins. With the surge in growth of IT and ITES firms, software export has also
gaining momentum in recent years.
Kerala has a share of over 60% in cashew exports from India (Table 2.6 and 2.7). Its share
has been declining mainly on account of fall in domestic production of raw cashew. As a
consequence its reliance on imported raw cashew from African countries has increased. It
is evident from the Table 2.8. The import of raw cashew has increased at a CAGR of 8% in
the last five years. In 2007-08 total import of raw cashew was over 372,497 tonnes.
As pointed our in the previous section Cochin is the major gateway for international trade
from Kerala. Table 2.4 and 2.5 presents commodity-wise traffic handled at Cochin port.
Table 2.4
Commodity-wise Export through Kochi Port 2002- 03 to 2008-09
Tonnes
Sl.
No.
Commodity
2002-03
3
2003-04
4
2004-05
5
2005-06
6
2006-07
7
2007-08
8
2008-09
9
5 yr
CAGR
6-yr
CAGR
10
11
Tea
104
87
87
32
89
71
69
-7%
-7%
Cashew Kernels
85
89
92
81
68
77
57
-2%
-6%
Sea Foods
84
102
104
100
109
109
90
5%
1%
Coir Products
99
114
88
73
108
124
79
5%
-4%
Spices
46
25
25
65
37
49
33
1%
-6%
Coffee
115
119
115
69
92
94
64
-4%
-9%
Miscellaneous
1,592
2,020
2,643
2,499
2,971
-72%
-66%
Total
2,125
2,556
3,153
2,920
3,474
3,490
2,710
10%
4%
Source: Annual Administration Report, Cochin Port Trust
20
Table 2.5
Commodity-wise Import through Kochi Port 2002- 03 to 2008-09
Sl.
Commodity
No.
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
5 yr
CAGR
6-yr
CAGR
10
11
1
2
3
4
5
6
Fertilizers & Raw materials

Foodgrains
Iron, Steel & Machinery
Newsprint
Cashewnut
Miscellaneous
631
231
41
260
9,737
504
5
61
67
309
10,075
566
6
76
47
280
9,980
727
2
308
407
316
9,210
640
182
340
123
320
10,206
447
10
291
150
325
11,041
569
192
145
315
11,564
-7%
5%
30%
5%
3%
-2%
-3%
24%
3%
3%
10,899
11,022
10,957
10,969
11,810
12,264
12,784
2%
3%
Total
Source: Annual Administration Report, Cochin Port Trust
Table 2.6
Export of Cashew Kernels: Kerala and India (2003-04 to 2007-08)
(Quantity in MT and Value in Rs. Millions)
Kerala*
2003-04
2004-05
2005-06
2006-07
2007-08
4-year CAGR
India
Share of Kerala
Quantity
Value
Quantity
Value
Quantity
Value
68,119
79,950
74,376
72,860
69,298
0.4%
12,050
17,160
16,230
15,050
13,950
3.7%
100,828
126,667
114,143
118,540
114,340
3.2%
18,040
27,090
25,150
24,550
22,890
6.1%
68%
63%
65%
61%
61%
-2.7%
67%
63%
65%
61%
61%
-2.3%
* Export through Cochin Port.

Source: The Cashew Export Promotion Council of India
Table 2.7
Export of Cashew nut shell Liquid Kerala & India
(2003-04 to 2007-08)
(Quantity in MT and value in Rs. Millions)
Kerala*
2003-04
2004-05
2005-06
2006-07
2007-08
4-year CAGR
India**
Quantity
Value
Quantity
Value
6,784
6,674
5,834
3,736
5,410
-6%
670
660
600
570
740
3%
6,926
7,474
6,405
6,139
7,813
3%
700
790
710
1,030
1,200
14%
* Export through Cochin Port

** Various custom houses
21
Table 2.8
Import of Raw Cashew nuts: Kerala (2002-03 to 2007-08)
(Quantity in MT Value in Rs. Millions)
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
5-year CAGR
Quantity
Value
249,970
294,552
283,149
306,765
322,443
372,497
8%
7,720
9,090
10,550
11,350
9,720
10,710
7%
India accounts for more than two-thirds of the world production of coir and coir products.
Kerala is the home of the Indian coir industry, particularly white fibre, accounting for 61 per
cent of coconut production and over 85 per cent of coir products. Not more than 50 per
cent of the coconut husk is used in the coir industry.
Table 2.9
Export of Coir and Coir Products from India during 2005-06 & 2008-09
2005-06
Items
Curled Coir
Qty
(Tonnes)
2006-07
Value
Qty
(Rs. m) (Tonnes)
2007-08
Value
(Rs. m)
Qty
(Tonnes)
2008-09
Value
(Rs. m)
Qty
(Tonnes)
CAGR
Value
(Rs. m)
Qty
Value
1,804
20.8
1,280
15.2
1,438
22.4
Coir Fibre
1,553
19.6
9,357
107.6
11,102
122.4
19,444
239.1
132%
130%
Coir Rugs &

Carpets
1,243
73.0
488
32.9
178
13.4
64
6.8
-63%
-55%
30%
Coir Pith
53,444
387.3
67,153
538.2
83,613
638.5
96,996
846.2
22%
Coir Rope
163
7.0
154
6.9
372
14.0
370
16.5
32%
33%
Coir ( other
source)
123
7.5
119
6.6
119
5.8
57
1.9
-23%
-37%
Coir Yarn
9,583
301.9
9,691
316.2
8,407
266.7
5,335
192.6
-18%
-14%
Coir Geotextiles
2,512
114.1
3,045
133.5
3,365
144.5
3,252
159.1
9%
12%
Handloom
Mat
42,516
2,669.9
42,986
2,737.1
40,917
2,430.0
35,553
2353.8
-6%
-4%
Powerloom
Mat
1,610
102.7
246
16.9
75
5.3
54
4.0
-68%
-66%
Tufted Mat
19,671
1,160.6
29,017
1,821.3
33,950
1,991.1
33,689
2,259.8
20%
25%
Handloom
Matting
2,916
191.3
3,642
2,35.5
3,014
187.9
2,368
171.7
-7%
-4%
Powerloom
Matting
156
11.9
105
8.5
116
8.8
88
8.5
-18%
-11%
Rubberised
Coir
537
37.7
947
69.8
1,120
85.2
1,223
117.5
32%
46%
136,027
5,084.5
168,755
6,051.7
187,629
5,928.8
199,931
6,399.7
14%
8%
Total
Note: Kerala contributes around 85% of coir products.

Source: Directorate of Coir Development, Tiruvananthapuram.
22
During 2007-08 the export of marine products from Kerala were to the tune of 100,318
tonnes valued INR 14,309.4 million which accounted for a share of 18.52% in quantity and
18.78% in value of marine products export from India. The export details of marine
products from Kerala compared to all India in quantity and value for the last five years are
given in Table 2.10. A decline was observed in quantity and value of marine products
exported from Kerala during 2007-08 compared to previous year. Frozen shrimp was the
main item exported followed by frozen cuttle fish, squid, frozen fish etc.
Table 2.10
Item wise Exports of Marine Products from Kerala during 2005-06
and 2007-08
2005-2006
2006-07
2007-08
CAGR
Qty
US$
(Million)
Qty
(Tons)
US$
(Million)
Qty
(Tons)
US$
(Million)
Frozen Shrimp
30,012
136
29,413
143
26,566
136
-6%
0%
Frozen fish
22,464
25
28,036
34
30,946
49
17%
39%
Frozen Cuttle Fish
193,116
57
21,294
80
20,484
94
-67%
28%
Frozen Squid
16,068
43
16,508
49
11,486
40
-15%
-4%
Dried items
148
116
73
0.8
-30%
-19%
Live Items
235
177
185
-11%
6%
Quantity
Value
Chilled items
1,291
2,112
1,682
14%
26%
Others
7,777
14
10,960
23
8,897
25
7%
32%
271,111
286
108,616
340
100,319
356
-39%
12%
Total
Source: MPEDA
2.6
Socio-economic scenario
The per capita income of Kerala was USD 1,040 in 2007-08, compared to all India average
of USD 850. Distribution of households by socio-economic classification (SEC) shows that
Kerala has a higher percentage of households with education, as compared to the all India
average. The literacy rate in Kerala is the highest among Indian states. About 91% of
population in Kerala is literate, compared to the all India average of around 65%. In terms
of ownership of household goods like four wheelers, consumer goods and other amenities
such as electricity, Kerala is better placed, compared to the all India average. Kerala state
has low death rate and declining birth rate, resulting in slowdown in the population growth
rate.
Table 2.11
Birth & Death Rate and Life Expectancy in Kerala
Birth Rate*
Death Rate*
Infant mortality rate**
Life expectancy at Birth-Male (Yrs.)
Life expectancy at Birth-Female (Yrs.)
Kerala
All-India
14.7
6.8
13
71.3
76.3
23.1
7.4
55
62.3
63.9
Note: *Per thousand persons, ** Per thousand live births

Source: Economic Review of Kerala, 2008
23
2.7
Future development of Keralas economy-Key growth drivers

As per Industrial and commercial policy (2007), the government of Kerala is focussing on
modernizing the traditional industries, providing good infrastructure, optimum use of
natural resources and attracting private capital on mutually beneficial terms. The objective
is to promote Manufacturing, Agro Processing, Health Services and Knowledge based
industries and services.
For promoting industrial development and the overall regional growth the state government
has adopted an integrated approach to develop required infrastructure. The major
proposed plans include:
Mega Industrial Parks: Kerala Industrial Infrastructure Development Corporation

(KINFRA) to develop mega industrial parks in selected thrust sectors i.e. Textile, Food
Processing.
Industrial Townships: Industrial townships would be industrial areas providing required

support and infrastructure.
Special Economic Zone: Product specific SEZs, including service SEZs. The plans are
to set up SEZs at Kozhikode, Kannur, Kasrgod and Malappuram.
Industrial corridors : Following are the proposed industrial corridors in Kerala:
2.8
IT and ITES corridor from Kazhakuttom to Kovalam and From Kazhakuttam to

Kollam along NH Bypass.
Biotechnology and Hitech electronics corridor along seaport-airport at Kochi.
Food Processing and Textile corridor from Kanjikode to Walayar along NH at

Palakkad.
Sector Specific Industrial Parks. KSIDC to facilitate setting up of electronics hub. In

addition to this, industrial park in selected thrust sectors.
Investment Promotion
The Kerala state government wants to encourage investments on mutually beneficial terms
to accelerate the growth of the Keralas economy. The government wants to attract both
domestic and foreign investments. Kerala has received INR 62,470 million (around USD
1.4 billion) of Investment over the last 5 years. However, the amount of FDI inflow in the
state is still very low, accounting for less than 0.3% of total FDI inflow into India in rupee
terms. Service sector has registered a strong inflow of investments in Kerala, accounting
for more than 50% of the total investments made, followed by manufacturing and
construction sector at around 22% and 12% respectively.
24
Table 2.12
Investment completed between March 2004-June 2009
S.No.
State
Investment
Investment Index
Gujarat
124,112
1.00
Maharashtra
105,465
0.85
Andhra Pradesh
99,915
0.81
Tamil Nadu
56,666
0.46
Karnataka
52,250
0.42
Delhi
49,644
0.40
Orissa
49,325
0.40
UP
42,881
0.35
West Bengal
37,452
0.30
10
MP
30,440
0.25
11
Haryana
27,951
0.23
12
Chhattisgarh
27,131
0.22
13
Uttaranchal
25,190
0.20
14
Rajashtan
22,922
0.18
15
Himachal Pradesh
16,102
0.13
16
Jharkhand
15,567
0.13
17
Punjab
14,630
0.12
18
J&K
10,470
0.08
19
Bihar
9,686
0.08
20
Kerala
6,247
0.05
21
Sikkim
2,901
0.02
22
Assam
2,340
0.02
23
Goa
2,046
0.02
24
Puducherry
937
0.01
25
Meghalaya
870
0.01
26
Chandigarh
516
0.00
27
Tripura
258
0.00
28
Manipur
25
0.00
29
Arunachal Pradesh
15
0.00
30
Mizoram
15
0.00
31
Andman & Nicobar
0.00
32
Nagaland
0.00
25
Figure 2.2
Industry attractiveness matrix for Kerala state
High
Coir
Policy Thrust
Tourism
Food Processing
IT &
Electronics
Sericulture
Handloom
Medium
Marine Products
Rubber
Low
Medium
Spices
High
Factor Advantage
Source: IBEF
26
Historic Container Traffic Analysis
3. Historic container traffic analysis

Objective
To assess:
Container traffic growth rates across India
Port wise traffic share & growth
Equipment size wise container traffic in India
Major container trade lanes from India
Key Findings
Container traffic has grown at an average growth rate of 14% over the past ten years.
The top three ports in terms of market share are JNPT, Chennai & Mundra having
market shares of 52%, 15% & 10% respectively, thus controlling over two third of the
total container traffic handled in India. The average share of the container traffic of
Maharashtra & Gujarat ports has risen from 64% in FY99 to 68% in FY09.
Imports have grown at a faster pace when compared to exports volumes in India.
Therefore, the share of imports (loaded) in overall trade has increased from 44% in
FY 2002 to 51% in FY 2009. In terms of number of boxes; Indian ports have
continuously witnessed a higher throughput of teu as compared to FFEs. Port
throughput of overall number of teu (loaded) in both exports and imports has been
approximately twice the number of FFEs handled in India. With the rise of imports in
India in both teu and FFE, the share of empty containers has reduced over past few
years.
Far East Asia, Europe, Middle East & North American trade lanes have 31%, 27%,
17% and 13% market share of the overall container traffic from India. Southern Indian
ports has almost similarly market share of container trade lanes.
Conclusion
Vizhinjam falls in the lower west coast region which has lost market share in the overall
gateway container traffic handled in India. Chennai and Tuticorin are the only ports other
than North Western coast ports which have been able to maintain their market share in
the overall traffic of the country. Import traffic in India is fuelling container traffic growth in
the country and is primarily being received from China and other Far East Asian
countries.
27
India has a mix of older, traditional container handling ports, such as Mumbai on the west
coast, Kolkata on the upper east coast and Chennai in the lower east coast and newer,
better equipped facilities at location like Mumbai (JNPCT, NSICT), Mundra and Pipavav on
the upper west coast. This transition is result of the Indian government initiative to involve
the private sector through BOT schemes and privatisation for infrastructure development.
The most noteworthy example of this initiative has been the development at Jawaharlal
Nehru Port (JNP) of the Nhava Sheva International Container Terminal (NSICT). Now the
government has similar plans for the development of port sector and it will definitely benefit
the container ports of India.
Moreover, many new ports are also now emerging to take advantage of the growth of
containerisation throughout India as it continues to penetrate the general cargo and break
bulk markets. There are an increasingly higher number of ports either currently handling
container traffic or looking to do so in the next few years. Table 3.1 provides geographical
location within India of ports that are currently handling container traffic, together with
proposed new ports that are expected to be developed and will be operational during the
course of the current decade.
Table 3.2 gives an overview about container handling facilities and the various hinterland
served by these ports. The graphic representation is not binding and signifies the gateway
ports utilised for moving major share of container traffic generated from these states.
Table 3.1
Existing & proposed container handling ports in India
Coast / Region
Port
Upper West Coast
Kandla
Coast / Region
Upper East Coast
Port
Kolkata
Mundra
Haldia
Pipavav
Paradip
Dighi*
Kulpi*
Positra*
Dhamra*
Hazira*
Greater Mumbai
Lower West Coast
Mumbai
Central East Coast
Visakhapatnam
JNP
Gangavaram
Rewas*
Machilipatnam*
Dighi*
Kakinada
Mormugao
Lower East Coast
Tuticorin
New Mangalore
Chennai
Cochin
Ennore*
Vizhinjam*
Krishnapatnam
Note: * Proposed
28
Table 3.2
Port clusters in India & hinterland served
Port Clusters
States
Upper West
Coast
Greater
Mumbai
Haryana
Punjab
HP
NCR
Uttar Pradesh
Uttaranchal
J&K
Rajasthan
Madhya Pradesh
Gujarat
Maharashtra
Karnataka
Lower West
Coast
Lower East
Coast
Kerala
West Bengal
9
Orissa
Chhattisgarh
Upper East
Coast
Tamil Nadu
Andhra Pradesh
Central East
Coast
Jharkhand
N E States
Bihar
Nepal
Uttarakhand
Goa
9
9
However, the port clusters could / do attract limited traffic from primary hinterland of other
port clusters. For example, Nhava Sheva port attracts some container traffic from the lower
Andhra Pradesh which falls within the primary hinterland of the Chennai port.
As per table 3.1, Upper West Coast ports which include ports of Pipavav, Kandla and
Mundra share a common hinterland with the Greater Mumbai ports. However, its the
Greater Mumbai ports which control a significant chunk of the volumes generated from this
region. Almost 68% of the total Indian traffic is handled at these two port clusters however
its the Greater Mumbai ports which handle 53% of that traffic. In terms of total traffic
generated by the North Western hinterland of India, almost 79% of that traffic is handled by
29
Greater Mumbai ports, particularly Nhava Sheva port. The major gateway ports are Nhava
Sheva, Mundra, Pipavav, Kandla and Mumbai. Nhava Sheva is the largest container
handling facility in the region followed by Mundra. The high volumes handled by Nhava
Sheva are primarily due to the existing soft infrastructure (CFSs, Warehouses, CHAs,
Shipping Line agencies etc.) and copious amounts of captive cargo.
Southern India shares it container traffic with multiple port clusters. This is primarily due to
the reason that with the exception of Chennai. Central East Coast which includes only the
Visakhapatnam port currently, serves limited volume generated from its primary hinterland
of Orissa, Upper Andhra Pradesh and to some extent from NCR and Chhattisgarh.
3.1
Container Traffic Growth in India

In mature container markets, the container traffic primarily grows because of generic
increase in import and export volumes of containerisable cargo. However, in a developing
country such as India, the growth of container traffic is also dependent on the increasing
level of container penetration (i.e. the share of general cargo that is moving within
containers).
Container traffic in India has achieved a CAGR of around 14.6% over last 10 years, while
annual average growth rate over the last five years hovered around 13.7%. In 2002-03
major ports in India accounted for almost 99% of the container traffic. However, over the
last five years the container traffic at minor ports in India has increased considerably and it
accounted for almost 12.7% of the total container traffic handled in 2008-09. This increase
in minor ports share can primarily be attributed to growth registered by Mundra port.
Figure 3.1
Indias historical container traffic growth rate (FY 99 FY 09)
(000 Teus)
30%
8.0
25.66%
7.0
25%
Container Throughput (Mn)
21.45%
6.0
18.63%
20%
17.31%
5.0
13.39%
4.0
15%
12.71%
16.54%
11.68%
11.66%
10%
3.0
2.0
5%
2.09%
0%
-0.89%
1.0
-5%
0.0
FY99
FY00
FY01
FY02
FY03
FY04 FY05
India Traffic (Teu)
FY06
FY07
FY08
FY09
Grow th (Right axis)
Note: Container traffic includes transhipment traffic

30
Last 8-9 years have witnessed increasing private participation in container terminal
operations with P&O Ports (now DP World) leading the way at NSICT, Mumbai. The
participation of private operators in container trade resulted in greater efficiency and
competition in the sector, thus acting as catalyst in the growth of container volumes at
Indian ports.
3.2
Regional container traffic trend in India

Table 3.3 and 3.4 provide an overview of growth of container trade in India over the course
of past 10 years. This helps to highlight which ports and regions are handling the highest
proportion of container traffic as part of the process of identifying national container port
trends.
Using Indian Ports Association statistics, based on Indian financial year of April to March,
Table 3.3 identifies that since 1998-99 container traffic has risen from around 1.9m teu to
almost 7.5 m teu by 2008-09. Looking at this impressive growth on a year-on-year basis
double-digit figures has been common place over the course of this period, with
particularly high growth enjoyed in 2006-07 (25.6%). However, global economic recession
that set in late 2007 had an adverse impact on global container traffic including India. This
was evident in the fall of container traffic in India by almost 1% in FY 2009. The ongoing
financial year 2010 is worse with country reporting a decreasing in container traffic by
almost 9% from Jan-Sep 2009 over the same period last year.
However, in terms of historical data and current performance amongst its peers, its the
performance of Mundra which is worth mentioning. Mundra has recorded the highest
growth in the past two years of its operation and has in fact exceeded the volumes
handled by the other competing ports which have been in operation for a longer duration of
time.
Figure 3.2
Region-wise share of container traffic
70%
60%
50%
40%
30%
20%
10%
0%
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
Upper West Coast
Greater Mumbai
Low er West Coast
Low er East Coast
Central East Coast
Upper East Coast
FY09
31
Although growth rates of Pipavav in the past two years have been impressive, in absolute
terms, volumes still seem to be marginal, as compared to Mundra, which has handled
more than four times the volumes handled at Pipavav in 2008-09.
The growth in the container traffic has been one of the strongest in upper west coast
region, where the average annual increase was 32.9% between 1998-99 and 2008-09.
Ordinarily this growth would be regarded as good but it is primarily the Mundra port which
has contributed high volume to the cluster.
Share of JNP has risen from 34.67% in FY99 to 52.4% in FY09. The percent share of total
traffic is lower compared to 57.2% registered during FY04; however it continues to
maintain its market share over the past three years. This downward slide in JNPs market
share can largely be attributed to current capacity constraint which JNP is facing, coupled
with shift of cargo to new facilities at Mundra and Pipavav.
Inter port competition on the west coast of India is expected to intensify further, which
could lead to slow but steady decline in JNPs market share over next 10 years. Although
the immediate effect of this situation has been Mumbais (MbPT) share of the Indian box
traffic, falling from 26.4% in FY98 to almost 1.2% in FY08. The share of Mumbai port
declined due to increasing competition from JNPT, lack of capacity and infrastructure at
Mumbai port and the growth of mainline callers generally reducing the requirement for
small feeders with shallow draft.
In the overall terms the total share of the upper west coast and the Greater Mumbai region
has increased from 64.3% in 1998-99 to 68.1% by 2007-08. The share of upper west coast
has increased from mere 3.3% in 1998-99 (only Kandla) to over 14.5% in 2008-09. The
greater Mumbai region during the same period has lost its market with its share in 2008-09
declining to 53.6% after reaching a peak of 63.4% in 2002-03. Among the other four
regions, there are individual ports which are doing well in percentage terms because of
small base traffic but in absolute terms JNP is the clear leader.
Main ports in the other three regions are Cochin in the lower west coast doing 0.26 Mn teu
in 2008-09, registering a CAGR of 7.3% between FY99 and FY09. Tuticorin and Chennai
in the lower east coast have managed an annual average growth of around 16.0% and
15.0% respectively over the same period. At central and upper east coast, Visakhapatnam
and Kolkata ports have registered an impressive growth of 20.2% and 10.4% respectively,
but on a very small base.
3.3
Growth of container volumes key growth factors

Growth in the Indian container industry can largely be attributed to robust economic growth
and increasing penetration of containers into the general cargo market. It is been argued
that new privatised facilities might have improved the growth further. Although this is a
valid argument, but there are a number of factors which works simultaneously for a higher
sum total growth and just better facility would not guarantee higher traffic volume. More
important is perfect mapping of container demand with the supply of better quality and
efficient support infrastructure facilities at the right location. For example, Tuticorin port has
not been able to realise its full potential despite the presence of a global port operator like
PSA due to lack of hinterland infrastructure and weak immediate hinterland. On the other
hand JNP has been able to attract traffic away from the traditional gateway port of Mumbai
(MbPT) by providing and developing better infrastructure and higher efficiency. JNP has
acted as a catalyst in boosting container throughput on the west coast of India and has
maintained a growth rate better than the national average.
32
Figure 3.3
Key growth factors
In the nineties ever since deregulation and liberalization, global trade growth in India has
accelerated. As a result there has been a high rise in the merchandise trade. Based on
the current rate of growth of merchandise and services trade, it is expected that Indias
share in world trade covering merchandise plus services sector may cross 2% in 2009.
players like Wal-Mart, Tesco, Auto-makers, Textile manufactures etc. have outsourced
their manufacturing and sourcing to various countries including India. This has resulted in
increased volumes of containers traffic at Indian ports. Some of the key growth factors for
container trade in India can be summarized as follows:
Growth in trade of Readymade garments, textiles, handicrafts, leather products, auto

components, electrical and electronic goods, engineering goods, processed and
packaged food and agri exports.
Development of infrastructure i.e. new container terminals, Inland Container Depots

(ICDs), rail and road, etc. has resulted in a higher penetration of container in the break
bulk cargo segment thus helping in the growth of container trade.
Increasing investment and growth witnessed in the industrial / manufacturing sector.
Lower tariff barriers and changing trade policies of India
Thailand India Free Trade Agreement.
Comprehensive Economic cooperation Agreement between India and Singapore.
33
Table 3.3
Traffic pattern of Indian container handling ports 1998 - 99 to 2008 - 09
(In teu)
Port
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09 CAGR (10 Yr) CAGR (5 Yr)
Kandla
Mundra
Pipavav
63,436
0
79,089
0
91,534
0
125,363
0
12,000
157,264
0
15,000
170,035
48,000
18,000
180,517
212,000
25,000
148,624
289,117
89,000
177,787
571,356
159,013
165,092
711,552
195,311
138,000
777,109
181,651
8.08%
-4.1%
74.5%
58.8%
Sub-total
63,436
79,089
91,534
137,363
172,264
236,035
417,517
526,741
908,156 1,071,955 1,096,760
32.98%
36.0%
429,448
321,419
254,309
213,109
196,500
218,524
156,122
138,201
117,596
92,000
889,978 1,163,048 1,573,677 1,929,531 2,268,989 2,371,338 2,666,703 3,298,620 4,059,841 3,955,558
-15.73%
19.45%
-14.1%
11.8%
1,178,418 1,319,426 1,484,467 1,827,986 2,142,640 2,465,489 2,589,862 2,822,825 3,436,821 4,177,437 4,047,558
13.13%
10.4%
Upper West Coast
Greater Mumbai
Mumbai
JNP
Sub-total
509,310
669,108
Lower West Coast

New Mangalore
Cochin
Mormugao
0
128,912
4,047
98
130,057
6,635
1,891
143,091
6,220
3,929
151,829
9,151
6,043
165,687
9,129
6,927
169,965
10,365
8,943
185,175
10,180
9,646
203,037
9,241
17,290
226,806
13,242
21,460
253,715
14,027
28,555
260,000
14,000
7.27%
13.21%
32.7%
8.9%
6.2%
Sub-total
132,959
136,790
151,202
164,909
180,859
187,257
204,298
221,924
257,338
289,202
302,555
8.57%
10.1%
Tuticorin
Chennai (Madras)
99,512
282,662
136,612
321,854
156,978
352,178
213,509
344,532
212,925
425,413
253,880
539,528
307,310
616,512
321,060
734,815
377,102
450,398
439,000
885,422 1,128,108 1,143,000
16.00%
14.99%
11.6%
16.2%
Sub-total
382,174
458,466
509,156
558,041
638,338
793,408
923,822 1,055,875 1,262,524 1,578,506 1,582,000
15.26%
14.8%
Lower East Coast
34
Table 3.3 (contd)

Port
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09 CAGR (10 Yr) CAGR (5 Yr)
Visakhapatnam
14,307
20,427
20,232
21,517
21,507
20,441
45,149
46,747
55,769
71,120
90,000
20.19%
34.5%
Sub-total
14,307
20,427
20,232
21,517
21,507
20,441
45,149
46,747
55,769
71,120
90,000
20.19%
34.5%
Paradip
Kolkata
Haldia
0
132,000
28,000
0
147,305
28,325
0
138,123
50,882
451
98,007
93,010
2,440
105,885
117,138
4,500
122,419
136,657
2,281
159,242
128,113
3,417
203,481
110,319
2,476
239,431
109,638
4,188
297,287
128,118
2,000
302,000
127,000
8.63%
16.32%
-15.0%
19.8%
-1.5%
Sub-total
160,000
175,630
189,005
191,468
225,463
263,576
289,636
317,217
351,545
429,593
431,000
10.42%
10.3%
1,931,294 2,189,828 2,445,596 2,901,284 3,381,071 3,966,206 4,470,284 4,991,329 6,272,153 7,617,813 7,549,873
14.61%
13.7%
Central East Coast
Upper East Coast
India container
total
Growth
2.09%
13.39%
11.68%
18.63%
16.54%
17.31%
12.71%
11.66%
25.66%
21.45%
-0.89%
35
Table 3.4
Estimated share of container traffic per port, 1998 - 99 to 2008 - 09
(%age)
Port
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Kandla
3.3%
3.6%
3.7%
4.3%
4.7%
4.3%
4.0%
3.0%
2.8%
2.2%
1.8%
Mundra
0.0%
0.0%
0.0%
0.0%
0.0%
1.2%
4.7%
5.8%
9.1%
9.3%
10.3%
Pipavav
0.0%
0.0%
0.0%
0.4%
0.4%
0.5%
0.6%
1.8%
2.5%
2.6%
2.4%
Sub-total
3.3%
3.6%
3.7%
4.7%
5.1%
6.0%
9.3%
10.6%
14.5%
14.1%
14.5%
Mumbai
26.4%
19.6%
13.1%
8.8%
6.3%
5.0%
4.9%
3.1%
2.2%
1.5%
1.2%
JNP
34.6%
40.6%
47.6%
54.2%
57.1%
57.2%
53.0%
53.4%
52.6%
53.3%
52.4%
Sub-total
61.0%
60.3%
60.7%
63.0%
63.4%
62.2%
57.9%
56.6%
54.8%
54.8%
53.6%
New Mangalore
0.0%
0.0%
0.1%
0.1%
0.2%
0.2%
0.2%
0.2%
0.3%
0.3%
0.4%
Cochin
6.7%
5.9%
5.9%
5.2%
4.9%
4.3%
4.1%
4.1%
3.6%
3.3%
3.4%
Mormugao
0.2%
0.3%
0.3%
0.3%
0.3%
0.3%
0.2%
0.2%
0.2%
0.2%
0.2%
Sub-total
6.9%
6.2%
6.2%
5.7%
5.3%
4.7%
4.6%
4.4%
4.1%
3.8%
4.0%
Upper West Coast
Greater Mumbai
Lower West Coast
Lower East Coast

Tuticorin
5.2%
6.2%
6.4%
7.4%
6.3%
6.4%
6.9%
6.4%
6.0%
5.9%
5.8%
Chennai (Madras)
14.6%
14.7%
14.4%
11.9%
12.6%
13.6%
13.8%
14.7%
14.1%
14.8%
15.1%
Sub-total
19.8%
20.9%
20.8%
19.2%
18.9%
20.0%
20.7%
21.2%
20.1%
20.7%
21.0%
36
Table 3.4 (contd)

Port
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Visakhapatnam
0.7%
0.9%
0.8%
0.7%
0.6%
0.5%
1.0%
0.9%
0.9%
0.9%
1.2%
Sub-total
0.7%
0.9%
0.8%
0.7%
0.6%
0.5%
1.0%
0.9%
0.9%
0.9%
1.2%
Paradip
0.0%
0.0%
0.0%
0.0%
0.1%
0.1%
0.1%
0.1%
0.0%
0.1%
0.0%
Kolkata
6.8%
6.7%
5.6%
3.4%
3.1%
3.1%
3.6%
4.1%
3.8%
3.9%
4.0%
Haldia
1.4%
1.3%
2.1%
3.2%
3.5%
3.4%
2.9%
2.2%
1.7%
1.7%
1.7%
Sub-total
8.3%
8.0%
7.7%
6.6%
6.7%
6.6%
6.5%
6.4%
5.6%
5.6%
5.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Central East Coast
Upper East Coast
India container total

37
3.4
Historic container traffic Equipment size analysis

Table 3.5 shows the equipment size wise traffic break-up for the Indian ports over the past
eight years. The container traffic break-up has been shown in two sizes namely, teu
(Twenty Foot Equivalent Units) and FFE (Forty Foot Equivalent Units). Although there are
container sizes which are larger than an FFE, however due to limited number of those
units in circulation in India they have been reported under FFE units itself.
Table 3.5
Equipment size wise container traffic at Indian major ports
Import
Export
Total EXIM Traffic
teu
Year
Loaded
Empty
Total
Loaded
Empty
Total
Loaded
Empty
Total
FY 2002
492,980
222,599
715,579
680,896
24,406
705,302
1,173,876
247,005
1,420,881
FY 2003
561,172
282,840
844,012
823,461
20,098
843,559
1,384,633
302,938
1,687,571
FY 2004
670,504
276,628
947,132
892,715
30,187
922,902
1,563,219
306,815
1,870,034
FY 2005
773,989
222,909
996,898
914,810
47,304
962,114
1,688,799
270,213
1,959,012
FY 2006
939,810
172,154
1,111,964
993,983
85,895
1,079,878
1,933,793
258,049
2,191,842
FY 2007
1,081,325
275,179
1,356,504
1,220,790
84,972
1,305,762
2,302,115
360,151
2,662,266
FY 2008
1,388,371
277,454
1,665,825
1,440,100
129,391
1,569,491
2,828,471
406,845
3,235,316
FY 2009
1,360,586
274,995
1,635,581
1,377,156
153,745
1,530,901
2,737,742
428,740
3,166,482
15.6%
3.1%
12.5%
10.6%
30.1%
11.7%
12.9%
8.2%
12.1%
FY 2002
248,713
78,746
327,459
280,008
39,047
319,055
528,721
117,793
646,514
FY 2003
263,852
106,894
370,746
341,394
30,839
372,233
605,246
137,733
742,979
FY 2004
330,840
129,213
460,053
415,326
33,012
448,338
746,166
162,225
908,391
FY 2005
413,039
124,022
537,061
461,079
55,736
516,815
874,118
179,758
1,053,876
FY 2006
485,716
131,304
617,020
528,181
65,484
593,665
1,013,897
196,788
1,210,685
FY 2007
562,842
168,471
731,313
624,145
83,630
707,775
1,186,987
252,101
1,439,088
FY 2008
715,244
176,619
891,863
720,441
122,231
842,672
1,435,685
298,850
1,734,535
FY 2009
713,265
164,916
878,181
676,594
155,848
832,442
1,389,859
320,764
1,710,623
16.2%
11.1%
15.1%
13.4%
21.9%
14.7%
14.8%
15.4%
14.9%
FY 2002
990,406
380,091
1,370,497
1,240,912
102,500
1,343,412
2,231,318
482,591
2,713,909
FY 2003
1,088,876
496,628
1,585,504
1,506,249
81,776
1,588,025
2,595,125
578,404
3,173,529
FY 2004
1,332,184
535,054
1,867,238
1,723,367
96,211
1,819,578
3,055,551
631,265
3,686,816
FY 2005
1,600,067
470,953
2,071,020
1,836,968
158,776
1,995,744
3,437,035
629,729
4,066,764
FY 2006
1,911,242
434,762
2,346,004
2,050,345
216,863
2,267,208
3,961,587
651,625
4,613,212
FY 2007
2,207,009
612,121
2,819,130
2,469,080
252,232
2,721,312
4,676,089
864,353
5,540,442
FY 2008
2,818,859
630,692
3,449,551
2,880,982
373,853
3,254,835
5,699,841
1,004,545
6,704,386
FY 2009
2,787,116
604,827
3,391,943
2,730,344
465,441
3,195,785
5,517,460
1,070,268
6,587,728
15.9%
6.9%
13.8%
11.9%
24.1%
13.2%
13.8%
12.1%
13.5%
FFE
CAGR
TOTAL IN teu
CAGR
CAGR
38
Above table shows the container traffic break-up by container size at the Major Ports in
India over the period FY 2002 to FY 2009. It is evident from the table above that imports
have grown at a faster pace when compared to exports. Therefore, the share of imports
(loaded) in overall trade has increased from 44% in FY 2002 to 51% in FY 2009.In terms of
number of boxes; Indian ports have continuously witnessed a higher throughput of teu as
compared to FFEs. The port throughput of overall number of teu (loaded) in both exports
and imports has been approximately twice the number of FFEs handled in India.
With the rise of imports in India in both teu and FFE, the share of empties has changed
drastically over the years. In terms of teu, the overall share of empties imported into India
has reduced from 31% in FY 2002 to 17% in FY 2009. The share has been calculated by
dividing the empties (teu) imported by total imports (teu) in India. Similarly, in terms of FFE
the share has decreased marginally from 24% in FY2002 to 19% in FY2009. On the other
hand, share of export of empties in teu has increased from 3% to 10% while for FFEs it
has increased from 12% to 19% over the same time period.
3.5
Line wise container traffic share in India

For the sake of simplicity and understanding the flow of cargo to various destinations
across globe through India, various shipping routes have been consolidated under the
following trade lanes in alphabetical order:-
AMR
Americas (Central America, East & West Coast of South America)
ANZ
Australia & New Zealand
EAF
East Africa
EUR
Europe ( Mediterranean, Red sea ports and North Europe)
FEA
Far East Asia ( China, South East Asia and Far East countries)
IGF
Intra Gulf ( Middle East and Indian Subcontinent)
NAM
North America ( East & West coast of US and Canada)
SAF
Southern Africa ( South Africa, Indian Ocean Islands and southern African countries)
WAF
West Africa
The top four trades in India, viz. Far East Asia (31%), Europe (27%), Intra Gulf (17%) and
North America (13%) constitute almost 90% of the total container traffic in India. The
continuous growth of volumes on these trades in India have resulted in most of shipping
lines employing direct mother vessels calls to the Indian ports primarily to Nhava Sheva,
Mundra and Chennai. With the exception of Far East trade, head- haul volumes for most of
the shipping lines are exports from India. However, for trades on the FEA route, imports
into India constitute the head haul trade.
Figure 3.4 shows the estimated share of loaded volumes share (export and import) from
India for 2008:
39
Figure 3.4
Trade lane wise port throughput share in India loaded boxes
(2008)
2%
13%
4%
3% 1%
2%
17%
27%
31%
SAF
WAF
AMR
ANZ
EAF
EUR
FEA
IGF
NAM
FEA Far East Asia; EUR Europe, IGF Intra Gulf, NAM North America, SAF- South Africa,
WAF West Africa, EAF East Africa, ANZ Australia & New Zealand, AMR South America
Source: Compiled by Drewry
Table 3.6 below shows the growth of loaded volumes (export & import) in India. The data
excludes restow, empty repositioning and transhipment incidences.
Table 3.6
Trade lane wise growth rate in India
Average Growth Rate
(2005-08 est)
Export Share of
Total Trade Volume
Import Share of
Total Trade Volume
AMR
21%
30%
70%
ANZ
15%
48%
52%
EAF
22%
24%
76%
EUR
13%
43%
57%
FEA
38%
64%
36%
IGF
18%
28%
72%
NAM
7%
43%
57%
SAF
14%
47%
53%
WAF
12%
51%
49%
Total Loaded
20%
47%
53%
Trade Lane
FEA Far East Asia; EUR Europe, IGF Intra Gulf, NAM North America, SAF- South Africa, WAF
West Africa, EAF East Africa, ANZ Australia & New Zealand, AMR South America
40
Table 3.7
Trade lane wise market share in India for loaded containers
Trade Lane
Export
Import
Total
FEA
21%
43%
32%
EUR
28%
25%
27%
IGF
23%
10%
17%
NAM
14%
12%
13%
WAF
3%
4%
4%
AMR
4%
2%
3%
SAF
2%
2%
2%
EAF
2%
1%
2%
ANZ
1%
2%
2%
100%
100%
100%
Grand Total
Far East Trade
This is the largest trade lane in India with 32% of the cargo moving in this corridor. It is
also the fastest growing trade lane with import to export ratio at 0.56, the FEA trade is
highly dominated by container import volumes into India as almost 64% of the volumes on
this lane constitutes import cargo. The trade is also the highest constituent of container
import volumes into India with almost 43% of Indias total container imports falling under its
purview. Imports from Far East Asian countries into India have increased steadily over the
past few years. According to the data received from Ministry of Commerce & Trade, in
dollar terms, the share of imports of Far East Asian countries into Indias total import
basket (minus petro & petro products) has increased from 23.1% to 42.2% in FY 2008.
The average growth rate of value of imports over the past seven years has been 31.8%.
China, South Korea, Malaysia, Singapore, Thailand, Japan and Indonesia are the major
countries involved on this trade lane. Primary export commodities are cotton yarn, textiles,
food products, steel, stones and seafood, whereas major import commodities are
machinery, chemicals, electrical & electronic goods, steel, automobile & auto components,
fabrics, newsprint and paper. . With strong competition amongst shipping lines and high
repositioning costs of containers, this is one of the low yielding trades from India.
Europe Trade
This is the second largest trade lane in India with 27% of the overall containerised cargo
moving in this corridor. 43% of the overall cargo is westbound trade i.e. exports while
import cargo is also significant with approximately 25% of the overall imports into India
falling under its purview. The major export commodities are garments, apparel, steel, food
products and chemicals while major import goods are paper and chemicals. Western
Europe & Scandinavian countries along with Russia are the major countries involved in
this trade lane. The trade lane had been growing at an average growth rate of 16-18%
41
over the past few years however due to current recession in the market it is estimated that
this trade lane is most likely to grow at 6-7% in 2009.
North America Trade
As per industry estimates, this is one of the most profitable trades from India. 43 % of the
total volumes on the NAM trade are head haul (export) with cargo primarily headed for US
East Coast ports. Textile, Apparel and Chemicals are the major commodities exported in
this sector while paper, paper related products, and machinery and chemicals are primary
import commodities.
Intra Gulf
This is the fourth largest constituent of Indian container trade. 28% of the IGF trade
comprises export volumes. The major export commodities are frozen food, processed agri
products, tea & general cargo while major import goods are paper, food products, scrap
and chemicals. The major countries on this trade are UAE, Saudi Arabia, countries in the
Persian Gulf and Sri Lanka in the Indian subcontinent.
In line with its global leadership position, Maersk Line is the largest market share holder in
India too. Its sister company Safmarine holds another 3%, which means that the A.P.
Moller Group together commands a 19% market share. Hence, the group is in a strong
position to change the fortunes of any container terminal in the Indian subcontinent with
considerable volumes under its control.
Figure 3.5
Market share of major shipping lines in India- 2008
16%
34%
10%
8%
2%
3%
3%
7%
3%
MAERSK
MSC
EMIRATES
3%
4%
APL
NYK
SAFMARINE
7%
HL
CSAV-NOR
KLINE
CMA
SCI
OTHERS
As per table 3.8, container volumes on the China-India trade constitute the largest chunk
of cargo on this trade followed by United States. While, Indo-China trade is primarily
imports into India, NAM trade on the other hand is export oriented trade.
42
Table 3.8
India World Base volume estimate for 2008
S. No.
India - World Base Volumes
Per Cent Share
China
13.1%
United States
12.7%
United Arab Emirates
4.8%
Great Britain
4.2%
Germany
4.2%
Korea
3.4%
Belgium
3.0%
Netherlands
2.9%
Sri Lanka
2.9%
10
Italy
2.6%
11
Malaysia
2.6%
12
Singapore
2.5%
13
Thailand
2.5%
14
Saudi Arabia
2.2%
15
Japan
2.1%
16
Spain
1.9%
17
Indonesia
1.8%
18
Others
30.7%
3.6
Major container shipping trade lanes in South Indian Ports

Table 3.9 below shows the portfolio of mainline services catering to Far East, Europe,
Middle East and Africa from the Southern coast of India. The capacity deployed for FarEastern trade is the largest amongst the four trade lanes primarily due to high import
volumes from China which provide critical mass for shipping lines to deploy mainline
services. The Far-East trade alone comprises of 46% of the traffic from Chennai followed
by Vizag wherein the Far-East trade accounts for 45% of total traffic. Overall the FarEastern Trade from South India comprises of 35% of the total traffic from all ports in South
India. The Europe and Gulf trades account for 25% and 16% traffic volume of South India
respectively.
As of January 2010, a total of 41 mainline vessels currently call ports in the Southern coast
of India with a total shipboard capacity of 79,320 teu.
Table 3.9 also provides number of feeder services from ports in southern India. It can be
seen that Chennai has the largest number of feeder services fourteen in all along with a
few break bulk mainline services, which have not been listed here. Further, Tuticorin and
Cochin have eight and six feeder services respectively, a high number of feeder services
are deployed at Tuticorin due to draft restrictions, which prevents large mainline services
to call directly and therefore most cargo is sent to Colombo via feeder vessels.
43
Table 3.9
Portfolio of liner services at large Southern container handling ports (Jan10)
Mainline Services as of Jan 2010
No. of
Vessels
Service Name
Min Size of
Vessel (teu)
Max Size of
Vessel (teu)
Total Capacity
(teu)
Region(s) Covered
Chennai
Austral-India
973
973
1,946
Far East-Ind Sub-Far East
New Nemo
12
2,478
2,826
33,315
Europe-Far East-Ind Sub-Europe
Indfex 2
2,082
2,824
12,269
MSS
1,133
1,560
4,243
RTC
1,054
1,498
3,793
Eur-ME-India
662
2,226
4,618
Europe-MidEast-Ind Sub
ACS
1,740
2,174
8,262
TCX
932
932
932
Total
33
69,378
Cochin
GIA
Total
1,742
2,135
5,619
Far East-Ind Sub-Africa
5,619
New Mangalore
Conti Lines
771
835
2,377
Europe-MidEast-Ind Sub-Africa
Austral-India service
973
973
1,946
Total
4,323
Feeder Services as of Jan 2010

Chennai
12
Cochin
Tuticorin
New Mangalore
Trend of containerised trade along Southern India is similar to the trend pan India i.e. Far
East trade lane has the largest share (35%) among other trade lanes. Table 3.10 shows
the trade lane wise share of containerised cargo movement from five major container
handling facilities located on the Southern coast of India.
44
Table 3.10
Trade lane wise break up of port traffic South India
Trade Lane
Chennai
Cochin
FEA
46%
17%
21%
12%
45%
35%
EUR
23%
24%
29%
32%
25%
25%
IGF
12%
28%
6%
25%
12%
16%
NAM
11%
12%
10%
16%
12%
12%
WAF
2%
11%
30%
6%
2%
4%
AMR
2%
2%
0%
4%
1%
2%
ANZ
2%
2%
1%
2%
0%
2%
SAF
1%
3%
0%
2%
1%
1%
EAF
1%
1%
3%
2%
1%
1%
100%
100%
100%
100%
100%
100%
Grand
Total
Mangalore
Tuticorin
Vizag
South India
Figure 3.6
Market share of the major shipping lines on Southern coast of
India
16%
37%
8%
6%
6%
3%
3%
MAERSK
NYK
5%
3%
APL
HMM
4%
HL
PIL
4%
CMA
SCI
5%
MSC
TAL
EMC
OTHERS
45
Table 3.11
Trade lane wise market share in South India for loaded containers
Trade Lane
Export
Import
FEA
26%
44%
EUR
30%
20%
IGF
20%
13%
NAM
15%
9%
WAF
2%
7%
ANZ
2%
2%
SAF
1%
2%
AMR
3%
2%
EAF
1%
1%
100%
100%
Total
Table 3.11 above shows the share of total export and import per trade lane on the
Southern coast of India. European trade has the largest export market share with almost
30% of total exports from South India followed by the Far Eastern and intra gulf trade. Far
East Asian trade continues to dominate the import volumes from South India with almost
44% of the total imports of this region falling in this trade lane.
46
Hinterland Mapping
4. Hinterland mapping
Objective
To identify:
Primary, secondary & distant hinterland
Container traffic potential for each hinterland
Key Findings
Tamil Nadu, Andhra Pradesh, Karnataka and Kerala are the four major south Indian
states in decreasing order of total container traffic potential which contribute container
traffic to the ports on the lower east coast and the lower west coast of India. Ports on
lower east coast are attracting traffic from Tamil Nadu, Karnataka and Andhra
Pradesh. The Cochin port is attracting container traffic from Kerala and limited
volumes from south Karnataka and Coimbatore in Tamil Nadu.
Keralas containerised commodities are primarily coir, rubber, cashews and other
agricultural goods. It is an import dominated state with a share of almost 55% of
loaded container traffic. Almost 40% of the container traffic is generated from the
southern districts of Trivandrum, Allapuzha, Kollam and Kanyakumari and rest is
situated closer to the Cochin port.
Chennai & proposed Ennore port have the proximity to the biggest and fastest
growing cargo centres in Southern India. Cochin port has both distance and cost
disadvantage to the primary hinterland of Chennai & Tuticorin ports. The average
container traffic growth rate in Kerala is smaller compared to growth rate witnessed in
Karnataka, TN and AP.
Conclusion
The primary hinterland of Vizhinjam would be the state of Kerala whereas secondary and
distant hinterland would be the cargo centres which are contested by existing container
handling ports in Southern India. Vizhinjam port has distance/cost advantage for cargo
centres in Southern Kerala vis--vis Cochin and Tuticorin ports.
47
Hinterland Mapping
Hinterland of the proposed port has been segregated into three categories, viz, primary,
secondary and distant hinterland. This segregation is essentially an identification of the
major markets which could be served by the proposed Vizhinjam port. The primarily
hinterland mainly consists of cargo centres in the state of Kerala and adjoining areas in the
Tamil Nadu. The primarily hinterland of the proposed port of Vizhinjam would overlap with
the existing hinterland of the port of Cochin and Tuticorin.
The secondary hinterland consists of cargo centres in southern Karnataka and Tamil
Nadu. This hinterland is currently being served by the New Mangalore Port and Chennai.
The distant hinterland includes Maharashtra, other parts of Karnataka, Tamil Nadu and
Andhra Pradesh. This is a vast hinterland which is served by multiple ports including JNPT
on the West coast of India.
Existing and proposed ports and key cargo centres
4.1
Karnataka
The economy of Karnataka has grown at a CAGR of 5.5% during 1999-2000 to 2007098whereas the share of Karnataka in Indias NDP has come down close to 5% during the
same period. Non-metallic metal products and basic metal & alloy industries are the prime
movers of Karnatakas economy. Rubber, plastic, and Paper and paper and paper
products are other important growing industries of Karnataka.
48
Hinterland Mapping
Table 4.1
Total Karnataka Loaded container traffic handled (export + Import)
Share of Karnataka
Karnataka Loaded
in Indias Total Container

Year
Traffic
Potential (TEU)
Traffic
(Via ICD)
Export
Import
Total
Export
Import
Total
FY06
3.61%
2.73%
3.19%
76,039
53,595
129,633
FY07
3.61%
2.72%
3.19%
94,690
63,710
158,399
FY08
3.6%
2.8%
3.2%
109,527
82,218
191,745
4.1.1
17%
Traffic
(Direct to
Port)
83%
Key cargo centres
Chikmagalur/Hassan/Mysore
Coffee production of India is concentrated in Southern states of Karnataka, Tamil Nadu

and Kerala. Chikmagalur, Hassan and Mysore districts are major coffee producing region
in India, accounting for more than 70% of Indian coffee production. Accordingly, it also
contributes large volumes for coffee exports, primarily shipped out from Cochin port.
Around 80% of the coffee export from India is destined to Europe including Russia and
other CIS countries.
Historically, Cochin Port has been handling significant volume of coffee exports and
accounted for almost 60% of the total coffee exports from India, whilst Chennai and
Mangalore port handled around 25% and 10% respectively. However, over the last couple
of years, New Mangalore port has been making serious efforts to attract coffee exporters
from Karnataka state by leveraging its proximity advantage. This shift in traffic is a direct
loss for Cochin port. Similarly, Chennai port has also increased its share in coffee exports
and currently handles more than 30% of coffee exports from the southern region.
Table 4.2
State-wise coffee production in 2008-09 (Est.)
State/
District
Total Production
(Tonnes)
Share in National
Production
Karnataka
Chikmagalur
Coorg/Mysore
Hassan
71,750
24%
114,370
39%
28,050
10%
Sub total
214,170
73%
Wyanaad
Travancore
Nelliampathies
47,510
16%
7,815
3%
1,875
1%
Sub total
57,200
20%
Kerala
49
Hinterland Mapping
Table 4.2 (contd)

State/
District
Total Production
(Tonnes)
Share in National
Production
Tamil Nadu
Pulneys
Nilgiris
Shevroys
Coimbatore
Sub total
Others
Total
5,825
2%
5,200
2%
3,100
1%
2,500
1%
16,625
6%
5,005
2%
293,000
100%
Source: Coffee Board
Cochin has a proximity advantage over Chennai for coffee moving in from major coffee
producing regions in Kerala. While main coffee producing regions in Karnataka and Tamil
Nadu are also closer to Cochin or almost equidistant from Chennai and Cochin, therefore
offering no major advantage to Chennai port in terms of inland haulage cost and time.
Some of the major factors, which made Cochin a major coffee export centre, are:
Proximity to major coffee producing regions in South India.
Cochin port provides the facility of self sealing of containers, which results in reduction
in the overall documentation and administration costs.
Limited frequency of container vessels at Mangalore port coupled with inadequate

infrastructure.
Shipping lines calling at Cochin port provide LCL Bill of lading, which is a big help for
small shippers and exporters.
Figure 4.1
Coffee producing States/Districts and current share of ports
New Mangalore- 21%
Chennai-31%
Cochin- 45%
Tuticorin-3%
50
Hinterland Mapping
Around 60% of coffee export is nominated and shippers have to choose the shipping line
nominated by the importer. Coffee is a very sensitive cargo; therefore, all the major coffee
exporters prefer factory stuffing to minimize any kind of damage and pilferage of cargo.
Further, this helps in avoiding the additional costs, which exporters have to incur for
utilizing the services of any ICD/CFS. CFSs in the Chennai region have not been able to
attract coffee exporters, as most of the facilities lack suitable warehousing facility. One of
the major requirements for coffee warehousing is be to have a proper humidity control
mechanism to protect the cargo from any possible damage.
Bangalore
Bangalore is the main cargo aggregation centre in Karnataka. Major commodities handled
in this region are RMGs, Stones, Coffee, Pharmaceuticals, Electronic goods, Auto
components and Machinery. Concor has one of the largest ICD at Whitefield, Bangalore.
CWC started its ICD operations in Bangalore in 2001. However, this facility has not been
able to attract major volumes, as shippers prefer to use Connors ICD, which provides
direct rail link to Chennai and JNP. In FY 2008, these two ICDs together handled around
60,000 teu with Concors facility accounting for almost 95% of the traffic.
Export containers handled at ICD Whitefield primarily includes stones, household items,
gherkins, coffee, and other heavy goods like machinery etc, whilst imports are dominated
by machinery, furniture, electrical and electronics and waste paper. Bangalore region is
generating additional traffic of around 70,000 teu which is directly handled at the port or
various CFSs located in Chennai. Chennai port handles almost 90% of Bangalores traffic
followed by Tuticorin, which handles around 5% and the remaining traffic is shared by JNP
and Cochin port.
Table 4.3
Break-up of traffic handled by ICD Whitefield
Exports
Teu
Imports
Total
Household
24.4%
Machinery/Spares
12.4%
Granite Prods/Blocs
9.1%
Furniture
7.6%
Gherkins
8.8%
Electrical Goods
7.3%
Coffee
6.7%
Household
5.0%
Food Stuffs
6.2%
Chem. Non-hazardous
4.4%
3.9%
Machinery/Spares
6.1%
Paper
Electronic Goods
5.6%
Accessories
3.8%
General Cargo
5.4%
Electronic Goods
3.2%
Electrical Goods
4.9%
Steel Products
3.2%
Pharmaceuticals
2.2%
Batteries
3.0%
Steel /Metal Products
2.2%
General Cargo
2.9%
Garments
2.1%
Personal Effects
2.2%
Accessories
1.5%
Granite
3.0%
Glass Products
1.2%
Metals
2.0%
Automobiles
1.6%
Newsprint
2.0%
Slate/Stone Products
1.2%
Cables
1.9%
Chem. Non-hazardous
0.9%
Glass Products
1.8%
Madeups/Textile
0.8%
Fabrics
1.5%
Medical Equipments
0.4%
Cartons
0.8%
Plastic Products
0.3%
Aluminum Products
0.8%
51
Hinterland Mapping
Mangalore
The Mangalore region generates limited container traffic. In 2007-08, New Mangalore Port
handled around 28,555 teu, most of which were generated by the local industries based in
Mangalore and the adjoining regions. The traffic generated in this region is mainly of
coffee, cashew nut and auto parts. Chikmagalur and Kushal Nagar are coffee generating
areas and Mangalore district produces cashew nut. This increase in traffic during past
couple of years could largely be attributed to the efforts made by the port to lure increasing
number of containers from Kushal Nagar region.
Apart from ports traffic, Mangalore region is also generating additional traffic of around
6,000-8,000 teu per annum, which is handled at JNP and Cochin. The only mode of
transportation for the movement of containers is road from this region. New Mangalore
Port has one CFS, operated by CWC. However, this CFS has not been able to attract any
significant traffic from the hinterland.
Table 4.4
Estimated loaded container traffic flow in Karnataka (FY08)
Sr.
Location
No.
Ratio
Export Import
Total/
(Export to
(Teu)
(Teu)
Annum
Import)
Share of Gateway Ports
Share Direct
by to Port JNPT/
ICDs Share Mumbai
Chennai Mangalore Cochin
1 Bangalore
75,920 56,990
57:43
132,910
46%
54%
80%
20%
0.00%
0.00%
2 Mangalore
14,186 10,649
57:43
24,835
0%
100%
10%
0%
60.00%
30.00%
3 Chikmaglur/Hassan
13,709 10,291
57:43
24,000
0%
100%
0%
80%
20%
0%
4 Others
5,712
4,288
10,000
4.1.2
Table 4.5
Export
Name of the SEZ
Set up by
Location
Adarsh Prime Projects
Notified Operational Special

Economic Zones
Devarabeesanahalli,
Bagmane Construction

Economic Zones
Bangalore North,
IT/ITES
Biocon Limited.

Economic Zones
Anekal Taluk, Bangalore,
IT/ITES
284.48
Cessna Garden
Developers Pvt. Ltd.

Economic Zones
Bangalore, Karnataka
IT/ITES
600
Type
Projection
2008-09
(INR Cr)
IT/ITES
225
Bhoganahalli and
Doddakanahalli,
52
Hinterland Mapping
Table 4.5 contd

Export
Name of the SEZ
Set up by
Location
Divyasree (Shyamaraju)

Economic Zones
Kundalahalli
Krishnarajapuram,Village,
IT/ITES
Global Village SEZ

Economic Zones
Pattengere/Mylasandra Village
IT/ITES

Economic Zones
Bangalore
IT/ITES
317
Infosys Technologies SEZ Notified Operational Special

Mangalore
Economic Zones
Bangalore
IT/ITES
94.32
Manyata Embassy
Business Park

Economic Zones
Bangalore
IT/ITES
268.98
Primal Projects Private

Economic Zones
Bangalore
IT/ITES
UI
Suzlon Infrastrucutre Ltd.

Economic Zones
Hi-tech and
engineering
realted
4738.5
WIPRO Limited

Economic Zones
Doddakannelli Village, Varthur
IT
UI

Economic Zones
Doddakannelli Village, Varthur
IT
UI
(Tanglin Development
Ltd.)
Park Ltd.
WIPRO Limited(SR)
Type
Projection
2008-09
(INR Cr)
245
Hobli,Electronic City,
Bangalore
Hobli,Electronic City,
Bangalore
Note: UI under Implementation

Source: Government of India

Name of the Developer
Type
Date of Notification
HCL Technologies Ltd.
IT/ITES
549(E) dt. 10th April'07
Infosys Technologies Limited
IT/ITES
Bio-technology
dt. 22nd June'07
Food processing and related

activities
IT/ITES
dt.29 August 2007
Karnataka Biotechnology and Information Technology

Services (KBITS)
M/s Karnataka Industrial Area Development Board
Primal Projects Private Limited
53
4.2
Hinterland Mapping
Tamil Nadu
Tamil Nadu has the advantage of being a coastal state. The share of Tamil Nadu in total
export earnings of India is approximately 10%.
Some of the major imported commodities from Tamil Nadu are as follows:
Electrical machinery, equipments and parts thereof sound recorders and reproduces
TV image
Natural or cultured pearl, precious or semi precious stones, metals & precious metals
and articles thereof
Iron and steel
Organic chemicals
Vehicles other than Rly. or tramway, parts & accessories thereof
Plastic and articles thereof
Pulp of wood or other fibrous cellulosic Material, paper and paper board
Articles of iron & steel
Some of the major export items are as follows:
Vehicles other than Railway tramway rolling stock and parts and accessories thereof
Footwear
Cotton
Raw hides, skins and leather
Fish and crustaceans molasses and other aquatic invertebrates
Salt, Sulphur plastering materials lime and cement
Organic chemicals
Tobacco and manufactured tobacco substitutes
Pharmaceutical products
Other made up textiles, articles sets, worn Clothing and worn textile articles
Rubber and articles thereof
Articles of leather, saddler and travel goods, handbags etc.,
54
Hinterland Mapping
It is estimated that Tamil Nadu accounts for 16% of the total number of factories in the
country. It also has a well-developed manufacturing sector with a high value addition in the
factories. Manufactured goods have a dominant market share in total industrial output in
the state.
Table 4.6
Loaded container traffic handled in Tamil Nadu
(export + Import)
Share of Tamil Nadu
Container Traffic in Total
Year
Total Tamil Nadu Loaded

Traffic
Potential (TEU)
Indias Loaded Traffic
(Via ICD)
Export
Import
Total
Export
Import
Total
FY06
11.21%
14.95%
13.02%
235,927
293,363
529,290
FY07
11.17%
15.15%
13.04%
292,604
354,667
647,271
FY08
11.3%
15.3%
13.2%
343,226
455,017
798,244
4%
Traffic
(Direct to
Port)
96%
4.2.1 Key cargo centres
Coimbatore
Coimbatore is the second largest city of Tamil Nadu and one of the fastest growing cities in
India. Coimbatore is one of the highest revenue earning districts in Tamil Nadu. Agriculture
is still the major occupation in the district. Cotton textiles, electric motors, pumps,
automobile spares, iron & steel and castings and tea form major exports from Coimbatore.
Along with the nearby town of Tirupur, Coimbatore has one of the highest concentrations
of textile activity in India. It is also a major centre for manufacturing of motor and pumps
and supplies more than 60% of Indias requirement and has a monopoly in the wet-grinder
segment. In the auto ancillary sector, Maruti Udyog and Tata Motors source up to 30% of
automotive components from Coimbatore. New companies have come up to produce
automobile components for tier-I manufacturers. Larsen and Tubro (L&T) plans to set up
an engineering facility in Coimbatore.
Coimbatore city has two ICDs operated by Concor and CWC along with one private CFS
operated by Chettinad Logistics. These three CFSs together handle around 11,000 export
teu and around 1,500 import teu annually. In addition to the ICDs traffic, Coimbatore
region generates additional traffic of almost 25,000 teus per annum for export, which is
directly handled at gateway ports. Similarly, Coimbatore region is receiving additional
import traffic of around 4,800 teus per annum through various gateway ports. Table 4.7
provides Coimbatores estimated commodity wise break-up of container traffic. Currently,
no ICD, including Concor, is providing rail transportation from Coimbatore. Therefore, the
entire ICD traffic from the region is moving by road. Cochin Port is around 250 Kms from
Coimbatore and is the natural gateway port for the region. Therefore, the entire ICD traffic
from Coimbatore is handled at Cochin port. CONCOR is currently developing rail
connectivity to its facility in Coimbatore servicing Cochin port. The rail service is expected
to be operational by 2010.
55
Hinterland Mapping
Table 4.7
Commodity wise traffic break-up of Coimbatore, 2008
Exports
Teu
Imports
Textile Machinery
6,000
Synthetic Yarns
Castings & Forgings
6,000
Machinery
Pumps/Machinery
3,500
Cotton
1,000
600
Others
500
Yarn
Tea
Teu
1,000
500
3,000
Others
Total
500
19,600
3,000
There is a significant volume of export traffic (around 55%), which is moving from
Coimbatore directly to various gateway ports. Tuticorin port handles around 60% of this
direct export traffic, whilst Chennai and Cochin ports account for 30% and 10%
respectively. Similarly, Chennai port handles around 50% of direct import traffic of
Coimbatore and the remaining is almost equally shared between Tuticorin and Cochin.
Some of the key reasons for this direct movement are:
Proximity to key gateway ports makes direct movement to ports quite economical.
Due to imbalance in EXIM trade, ICDs have to bring in empties from ports, resulting in
additional repositioning costs.
Container handling charges inside the port are lower, compared to ICDs in
Coimbatore.
Quick and efficient processing of custom documents at gateway ports.
Tirupur
Tirupur is part of Coimbatore district and is a major garment export centre of India. It has
two private road linked ICDs managed by Lemuir Group and Indev, along with one small
ICD facility of Concor. The three ICDs together handle around 15,000 teu of garment
exports, whilst imports were limited to less than 1,000 teu per annum. Tirupur is currently
generating around 120,000 teu of garment exports per annum of which 80% is handled at
Tuticorin Port, whilst Chennai accounts for almost 15% of this traffic. The remaining traffic
is shared between, Cochin and JNPT. Entire container movement from/to Tirupur is by
road.
Tirupur has the largest knitwear industry and around 55% of India's total knitwear exports
come from Tirupur. For the past six years, there has been a phenomenal change in
technology and large number of sophisticated computerized machines, full fledged
processing units, individual machines, compacting machines and other machinery required
in knitwear manufacturing have been imported. Also the rich availability of raw materials,
being in close proximity to Coimbatore, which is a major centre of cotton spinning industry
in the country allows Tirupur to access its basic raw materials quickly and as and when
required.
56
Hinterland Mapping
Cochin is the closest of all the ports, still shippers in Tirupur prefer Tuticorin because of the
availability of direct service to hub ports in Europe and USA. Further, it is cheaper and
faster to ship containers through Tuticorin via Colombo, Compared to Cochin and Chennai.
Garment exporters also feel that, Tuticorin is a customer friendly port and is quite flexible
in accommodating last minute containers.
However, with the commencement of scheduled weekly mainline service between Cochin
and the US east coast, Tuticorin will face intense completion from Cochin port. Shippers in
Coimbatore and Tirupur will be inclined to use the new service from Cochin, as it will not
involve any transhipment at Colombo and will also result in reduction of one day in transit
time.
Chennai
Chennai has a diversified economic base. The main industries are automobile, software
services, hardware manufacturing and financial services. Other important industries
include petrochemicals, textiles and apparels.
Some of the major companies per industrial sectors in Chennai are as follows,
S.No.
Industrial Sector
Companies
1.
Electrical &
electronics
Dell, Nokia, Motorola, Cisco, Samsung, Siemens, Flextronics,

Foxconn
2.
Auto & auto

components
Hyundai, Ford, Mitsubishi, BMW,TVS, Wheels India Ltd, Ashok

Leyland, Caterpillar, Royal Enfield, TI Cycles, TAFE, Dunlop, MRF,
Mahindra & Mahindra, Apollo Tyres
3.
Chemicals
Chennai Petro Chemicals Limited (CPCL), Manali Petro

Chemicals Limited, Madras Refineries Limited (MRL),
Petro Araldite, Orchid Pharmaceuticals
Multinational corporations like Dell, Nokia, Motorola, Cisco, Samsung, Siemens,

Flextronics and Foxconn have or are in the process of setting up Electronics / Hardware
manufacturing plants in the Sriperumbudur electronics SEZ. Ericsson and Alcatel have
research and development facilities in the city while Texas Instruments' R&D facility is in
the pipeline.
Some of automotive multinationals that have set up operations in the state are leveraging
their plants as global sourcing hubs. Hyundai Motors has made Chennai a global
production base for the compact car segment. Banking on its successful Indian operations,
Hyundai has invested US$ 220 million approximately, in its Chennai plant in order to
increase its production capacity. Hyundai has a global strategy to gradually shift the export
base from South Korea to India to capitalize on lower shipping costs to Europe and Latin
America and reduce delivery cycle times.
Ford Motor Company has made its plant in the state as a sourcing base for its mid-size
cars. Owing to the cost advantage in India, Ford is also sourcing auto components for its
US, European and Chinese operations from the state.
57
Hinterland Mapping
Other major manufacturing facilities range from small scale manufacturing to large scale
heavy industrial manufacturing, petrochemicals and auto ancillary plants. Chennai is a
textile industry hub with a large number of apparel industries located in the Ambattur-Padi
industrial zone in the northern suburbs of the city. The city also has a large leather apparel
and accessory industry. SEZ's for apparel manufacture and footwear are under
construction in the southern suburbs of the city.
Chennai has approximately 23 CFSs, which handle export and import containers for
Chennai Port. As per the latest estimates (2007-08) these facilities are handling around
700,000 teu per annum. Out of the total traffic handled by various CFSs, around 45%
originates and comes from other cargo centres located in the primary, secondary and
distant hinterland of Chennai port. Therefore, Chennai cargo is around 385,000 Teu while
hinterland outside Chennai contributes close to 275,000. Some of the main cargo centres,
using CFS facilities in Chennai, are Bangalore, Coimbatore, Hyderabad and Tirupur. Table
4.8 lists the key cargo centres and the volume of traffic moved to Chennai.
Table 4.8
Estimated break-up of traffic handled at CFSs in Chennai
(Jan-Jul09)
S.No,
CFS
Export
Import
Total Teus
1.
A.S. Shipping.
16,571
17,748
34,319
2.
All Cargo
6,564
20,634
27,198
3.
Balmer & Lawrie
2,631
14,312
16,943
4.
Binny
6,947
1,704
8,651
5.
Chandra Shipping
1,998
791
2,789
6.
Concor
14,370
9,649
24,019
7.
Continental
385
5,680
6,065
8.
CWC - M
49,928
62
49,990
9.
CWC - R
1,239
1,239
10.
CWC - V
908
5,470
6,378
11.
D.R. Logistics
6,026
1,437
7,463
12.
E.C.C.T.
1,314
16,468
17,782
13.
GDL
7,021
24,898
31,919
14.
German Express.
4,207
11,833
16,040
15.
I.C.B.C
2,964
2,726
5,690
16.
Kailash
10,579
3,907
14,486
17.
Sanco
6,027
21,959
27,986
18.
Satva
929
26,293
27,222
19.
Satva Vichur
586
7,383
7,969
20.
Sical
4,281
32,580
36,861
21.
Sun Global
2,880
1,100
3,980
22.
Triway
1,346
13,459
14,805
23.
Viking
4,523
1,810
6,333
24.
Visrutha
4,115
1,923
6,038
158,339
243,826
402,165
TOTAL
58
Hinterland Mapping
Table 4.9
Share of major export/import commodities handled at Chennai
Exports
Teu
Imports
Teu
Glass
3%
Chemicals
13%
Auto/Machinery Parts
6%
Paper Pulp
4%
Dried Flowers
5%
Scrap Metal
5%
Tyres
3%
Paper
10%
Chemicals
8%
Furniture
10%
Garments
8%
Toys
1%
Granites
10%
Pulses
3%
Agri Products
13%
Pet Scrap
3%
Electrical Goods
3%
Electrical Goods
4%
Mango Pulp
2%
Electronics
8%
38%
Machinery
10%
Yarn/Fibre
1%
Others
others
27%
Note: Based on estimates gained during field survey

Source: Compiled Drewry
With the steady increase in the container throughput, Chennai port is finding it difficult to
accommodate additional containers for custom clearance and documentation within the
port limits. Therefore, now all the factory stuffed export containers moving directly to port
have to go through on wheel inspection at one of the CFSs in Chennai. Exports of
garments, tobacco, marine products, leather products, tyres, etc. form a significant
proportion of Chennais container traffic. These commodities are very sensitive to adverse
climatic conditions and any exposure to dust, heat and other pollution could result in
severe damage to these products. Therefore, exporters prefer factory stuffing, instead of
using any CFS facility, which generally fail to provide dust free and clean environment for
handling of such sensitive and high value goods.
Most of the CFSs in Chennai are located in its northern region in Cluster 1, less than a
sixth are in close proximity to the CCT/Chennai port in Cluster 2. Pedestrians, the public
transport system, commercial vehicles, two-, three- and four-wheelers share the same
access road to the port from these CFSs which is also the only access road for containers
entering the Chennai port. Therefore, there is frequent congestion on the road which
affects the evacuation and arrival of containers at Chennai container terminal.
59
Hinterland Mapping
Figure 4.2
CFS clusters in Chennai region
CLUSTER 1
Ennore
Port
CCTL
CLUSTER 3
CLUSTER 2
CHHENAI CITY MAP

60
Hinterland Mapping
Pondicherry
Over the last couple of decades, Pondicherry has developed its infrastructure and has also
provided incentives, concessions and tax holidays which have served as a basis for
industrial growth in the Union Territory and which can aid growth in the future. Part of the
higher growth rate of industry could be attributed to the liberalization process. Major export
commodities from Pondicherry includes textile and readymade garments, Metal products,
Food products, Paper and Printing products , Auto components and Electronic goods.
Currently, Pondicherry region is generating around 5,000 teu per annum. Pondicherry has
two private ICDs. However these facilities have not been able to attract significant
volumes, as most of the shippers prefer to handle their containers at Chennai port. This
allows shippers to get duty drawbacks and other incentives in much lesser time compared
to containers handled at ICDs. Pondicherry is just 150 km from Chennai Port, which makes
the road transportation quite feasible and economical for importers and exporters. Further,
most of the CHAs, consolidators and other service providers are based in Chennai and
prefer to do all the documentation and inspection at Chennai.
Tuticorin
Tuticorin has eight CFSs in addition to the ports own facility. CFSs operated by Concor,
CWC and private players handle around 40,000 loaded teu per annum, of which almost
50% traffic comes from cargo centres located in the secondary hinterland. Additionally,
Tuticorin region is generating around 96,000 teu per annum, which are handled directly at
Tuticorin Port. Tuticorin has rail links with various cargo centres in the hinterland but more
than 90% of the traffic moves by road. Major commodities imported/exported in Tuticorin
region are Chemicals, Marine products, Wood and wood product, Metal scrap, raw
cashew, Stones, etc.
Over the last two years, Tuticorin port has been able to attract large volume of containers
from Tirupur and other garment and textile export centres in the hinterland by providing
direct services to North America (INDAMEX and IAX). However, owing to draft restrictions
and other operational issues, these stopped calling at Tuticorin and are moving directly to
JNPT. However, garment exporters still preferred Tuticorin as it is cheaper to feed
containers from Tuticorin to Colombo, compared to Chennai and Cochin. Further, Tuticorin
is seen as a customer friendly port showing lot of flexibility in accepting containers, which
are delayed due to various operational reasons.
Karur
Karur is famous for its textile industry and the region generates around 15,000 teu of
traffic, which primarily includes textile and furnishings. Due to its proximity to the Tuticorin
port, almost 80% traffic from the region moves through this port, whilst the remaining traffic
is shared between Chennai and Cochin.
Madurai
Madurai is an important industrial zone in Tamil Nadu and is known for Cotton garments,
Handloom weaving, Spices and Food products etc. It is just 135 Kms. from Tuticorin port.
It had one Concors ICD, which provided rail and road link to Tuticorin and Chennai Port.
61
Hinterland Mapping
However, due to very poor response from the local exporters, Concor has suspended its
EXIM operations for the time being. Proximity of the Tuticorin port and road transport being
cheaper and quicker, shippers prefer to directly handle their cargo at the port. Further,
exporters are able to process their documents within a week and are able to avail various
benefits available under export promotion schemes, whilst it took much longer if the
containers were handled at ICD.
Madurai as a region generates around 15,000 teu per annum, which includes around
6,000 teu of textile and garment exports. Tuticorin port handles around 80% of regions
traffic while Chennai Port, which is around 450 Kms away from Madurai, handles the
remaining traffic.
Salem
Salem is famous for its steel and steel products. It has one private CFS operated by Sanco
Limited, which handles around 1,200 export containers of Salem Steel annually. In
addition to this, Salem region generates around 13,000 additional teu annually. Salem is
almost equidistant from Chennai, Cochin and Tuticorin. However, around 70% of traffic
from Salem moves through Chennai, whilst remaining traffic is shared between Cochin and
Tuticorin.
.
Table 4.10
Estimated loaded container traffic flow in Tamil Nadu (FY08)
Sr.
No.
Location
Chennai
Export
(Teu)

Ratio
Direct
Import
Total/ Share by
(Export to
to Port
(Teu)
Annum
ICDs
Import)
Share Tuticorin Chennai
JNP
Cochin
127,090
272,175
40:60
399,265
0%
100%
100%
Coimbatore
25,063
11,928
68:32
36,991
40%
60%
35%
15%
Tirupur
94,325
44,890
68:32
139,214
10%
90%
80%
15%
Tuticorin
47,659
45,362
51:49
93,021
0%
100%
100%
Karur
9,951
3,552
74:26
13,502
0%
100%
80%
10%
10%
Salem
7,463
7,103
51:49
14,567
10%
90%
10%
70%
20%
Hosur
14,926
14,207
51:49
29,133
15%
85%
Others
16,750
55,800
15%
2%
3%
100%
72,550
62
Hinterland Mapping
4.2.2 Industrial infrastructure

Table 4.11
Export
Projection
2008-09
(INR Cr)
Name of the SEZ
Set up by
Location
Type
Arun Excello Infrstructure

Economic Zones
Vallncheri and
IT/ITES
Cheyyar SEZ

Economic Zones
Cheeyar
Footwear
Coimbatore Hitech Infrastrure

Pvt. Ltd.

Economic Zones
Coimbatore
IT/ITES
UI
DLF Infocity Developers

Economic Zones
Manapakkam &
Mulivakkam
IT/ITES
UI
Electronics Corporation of
Tamil Nadu

Economic Zones
Kancheepuram,
IT/ITES
UI
ETA Technopark Private

Economic Zones
Old
Mahabalipuram
Road, Navallur
Village,
Chengalpet Taluk,
Kancheepuram
District
IT/ITES
UI
ETL Infrastructure Services

Pvt. Ltd.

Economic Zones
Tambaram Taluk,
Kancheepuram
IT/ITES
UI
Flextronics Technologies

Economic Zones
Sriperumbudur,
Kancheepuram,
Electronics Hardware
and related services
Hexaware Technologies

Economic Zones
SIPCOT IT Park,
IT/ITES
State Government/Pvt SEZ/

approved before SEZ Act
2011
Auto
Mahindra City SEZ (IT), T.

Nadu
IT/Hardware and
Bioinformatics
Mahindra City SEZ (Textiles),

2012
105.6
384.85
UI
Old
Mahabalipuram
Road, Siruseri
Mahindra City SEZ (Auto

ancillary ), T. Nadu

2010
UI
Potheri
Chengalpet Taluk,
Kancheepuram
District
63
Hinterland Mapping
Table 4.11 contd

Location
Export
Projection
2008-09
(INR Cr)
Name of the SEZ
Set up by
Type
MEPZ Special Economic

Zone
Central Government:
Nokia SEZ

2013
Sriperumbudur
Apparel and fashion

accessories
Shriram Properties and

Infrastructure Private Limited

Economic Zones
Chennai, Tamil
Nadu
IT/ITES
State Industries Promotion

Corporation of Tamil Nadu

Economic Zones
Oragadam
Electronic Hardware
State Industries Promotion

Corporation of TN

Economic Zones
SIPCOT Industrial
Electronics of Telecom
area
Sriperumbudur,
hardware and support

services including
trading and logistic
activities
Suzlon Infrastrucutre

Economic Zones
Coimbatore
Hi-tech engineering
Tata Consultancy Services

Economic Zones
Siruseri and
Egattur, Chennai
IT/ITES
Multi product
3000
15060.39
UI
1082.08
Note: UI: Under Implementation


Type
Bannari Technoparks Pvt. Ltd.
IT/ITES
634(E) dt. 23rd April'07
Cognizant Technology Solutions India Pvt. Ltd.
IT/ITES
Dt.17th December, 07
DLF Infocity Developers (Chennai) Ltd.
IT/ITES
1978(E) dt. 16th Nov.'06
Electronics Corporation of Tamil Nadu
IT/ITES
IT/ITES
IT/ITES
Dt.12th February, 08
Foxconn India Developer Private Limited
IT and electronics hardware
Dt.5th December 07
Hexaware Technologies Limited
IT/ITES
1388(E) dt. 31st Aug'06
Hacciendaa Infotech and Realtors Private Limited
IT / ITES
New Chennai Township Private Limited
Engineering sector including auto

ancillaries
dt. 28 September, 07
New Chennai Township Private Limtied
Multi Services
Dt.23rd November 07
SNP Infrastructure Pvt. Ltd.
IT/ITES
Dt.12th February, 08
64
Hinterland Mapping
b. List of proposed SEZ contd

Type
Span Venture Pvt. Ltd.
IT/ITES
State Industrial Promotion Corporation of Tamil Nadu
Footwear
State Industries Promotion Corporation of Tamil Nadu
Leather sector
Syntel International Private Limited
IT/ITES
Tata Consultancy Services Limited
IT
1103(E) dt. 17th Jul'06
True Developers Pvt. Ltd.
Electronics Hardware and IT/ITES
Dt.20th November 07
Velankani Technology Parks Pvt. Ltd.
Electronics hardware and software and

ITES
Dt.11th December 07
Zillion Estates Pvt. Ltd.
IT/ITES
709(E) dt. 3rd May'07
dt. 10th July, 07

Dt.7th February, 08
Dt.27th November 07
1291(E) dt. 11th Aug.'06
4.3
Kerala
Kerala has been on a steady growth path registering a CAGR of 8% during 1999-2000 to
2007-08, consequently increasing its share in the national economy to over 4.0% in 200708 from 3.8% in 1999-2000. Like national economy of India, Keralas economy is also
primarily on service sector with secondary sector contributing only 27%. Keralas traditional
industries include handloom, cashew, coir and handicrafts. As of March 2009, there were
730 large and medium industrial undertakings in Kerala, of which 600 units are in the
private sector. The small scale sector contributes 40% to industrial production and 35% to
exports.
Cashew industry is also one of the major industries contributing to container trade in the
state. The Kerala State Cashew Development Corporation KSCDC and Cashew workers'
Apex Cooperative Society (CAPEX) are the two State agencies engaged in the cashew
processing sector in Kerala. KSCDC exports cashew kernels and cashew shell liquid. Raw
nuts are mainly imported to supplement the local availability. KSCDC and CAPEX have
approximately 40 factories across the state with more than 90% them concentrated in
Kollam district. However, it is only a minuscle share of the total cashew processing units
based in the state
Major export commodity: Sea Foods, Coir Products, Coffee, Tea, Cashew Kernels, and
Spices.
Major import commodity: Fertilizers & Raw materials, Iron, Steel & Machinery, Cashew
nut, Food grains, and Newsprint.
65
Hinterland Mapping
Table 4.12
Commodity-wise container traffic through Kochi in
FY 2008 & FY 2009
(Quantity in M.T)
Commodities
2008-09
2007-08
Export
Cashew kernels
56,967
77,458
Coir Products
78,563
124,213
Pepper
27,336
41,415
Sea foods
90,286
108,653
Tea
68564
71742
Turmeric
3,748
5,035
Coffee
63,130
94,386
Chemicals
60,697
48,557
Miscellaneous
650,717
632,291
Total Exports
1,100,008
1,203,750
Y-O-Y Growth
-8.6%
Imports
Machinery
5,495
12,633
314,831
325,014
60,685
114,700
Miscellaneous
1,470,794
977,481
Total Imports
1,851,805
1,429,828
Y-O-Y Growth
29.5%
Cashew nuts
Chemicals
Total Traffic
2,951,813
Y-O-Y Growth
2,633,578
12.1%
Source: Cochin Port Trust
Table 4.13
Import and export of Cashew Cochin Port
INR Cr.
Import of Raw Cashew Nuts
Export of Cashew Kernels
Quantity
Value
Quantity
Value
2001-02
191,579
502
54,717
971
2002-03
249,970
772
66,859
1,217
2003-04
294,552
909
68,119
1,205
2004-05
283,149
1,055
79,950
1,716
2005-06
306,765
1,135
74,376
1,623
2006-07
322,443
972
72,861
1,505
11%
14%
6%
9%
CAGR
Source: Cashew Export Promotion Council, Kochi.
66
Hinterland Mapping
Table 4.14
Loaded container traffic (export + Import) in Kerala
Share of Kerala
Kerala Loaded
in Indias Total Container Traffic

Year
Traffic
Potential (TEU)
(Loaded)
(Via ICD)
Export
Import
Total
Export
Import
Total
FY06
3.79%
2.08%
2.96%
79,692
40,810
120,502
FY07
3.37%
1.88%
2.67%
88,283
44,072
132,355
FY08
3.0%
1.8%
2.4%
89,878
52,743
142,621
0%
Traffic
(Direct to
Port)
100%
4.3.1 Key cargo centre
Wayanad
Wayanad is characterised by the cultivation of perennial plantation crops and spices. The
major plantation crops include coffee, tea, pepper, cardamom and rubber. Coffee based
farming system is a notable feature of Wayanad which is also one of the largest export
commodities from this district. Coffee is grown both as pure crop and as mixed crop along
with pepper. Pepper is grown largely along with coffee in the north eastern parts of the
district, especially in Pulpally and Mullankolly areas. Coffee in Wayanad (66,999 ha.)
shares 33.65% of the total cropped area in the district and 78% of the coffee area in the
state. Other major crops are rubber (63,015 ha.), coconut (59,452 ha.), cardamom (38,348
ha.), tea (31,792 ha.) cassava and ginger.
As per recent estimates, approximately 5% of the total traffic in the state of Kerala is
generated in the Wayanad district.
Kannur
Textiles, rubber and coir are the important traditional industries in the district. The textile
industry is largest amongst all three sectors with an estimated 40% of all SSI units in the
districts active in this sector. The region contributes around 3-5% of the total containerised
trade in the state.
Trichur
Trichur (Thrissur) contributes around 10-15% of the container traffic generated in the state
of Kerala. Thrissur is one of the most important industrial centres of the state of Kerala.
The district is dominated by industries in textile, timber, coir, fishery, agriculture industries,
and tiles sector.
Amongst all these sectors tiles, textile and timber are the most important industries in the
district. Some of the major textile mills in the city include Alagappa Textiles, Kerala
Lakshmi Mills, Cotton Mills, Rajgopal Textiles, Kunnath Textiles, Vanaja Textiles and
Sitaram Spinning & Weaving Mills.
67
Hinterland Mapping
Alappuzha
Alappuzha (Alleppey) is well known as a significant commercial and trading centre of

Kerala. Allapuzha is primarily known for the export of spices, coconut oil, pepper, arecanut,
fibre, coir yarn, sugar and cardamom.
Alappuzha is the major production centre of coir and coir products in the State. There are
about four thousand production units including a few large factories for coir in the district.
There are at present 15 mechanised looms too. There are 41 cooperative societies in the
coir sector. There is a central coir marketing society for the export of the produce of
primary societies. The Hindustan Coir Ltd. is one of the major exporting units from the city.
Quilon/Kollam
Cashew processing and coir production are major industrial vocations in Kollam
(Quilon).Handloom industry, clay and wood based industries also contribute to the
industrial advancement of the region.
Kollam is known as the major cashew processing centre in the state of Kerala with almost
90% of the cashew processing is done in the region. The Kerala State Cashew
Development Corporation (KSCDC) is the largest processor of cashew nut in the world. At
present, it has 34 factories.
Apart from cashew processing, there are 17 large, and one medium scale industries in the
district, of which, two are Central Government undertakings namely, the Indian Rare
Earths, Chavara and Parvathi Mills Ltd., Kollam.
Kerala Ceramics Ltd., Kundara, Travancore Plywood Industries, Punalur, Kerala Electrical
and Allied Engineering Company, Kundara, Kerala Premo Pipe factory Chavara, Kerala
Minerals and Metals Limited, Chavara, United Electrical Industries Kollam and the Kerala
Agro-Fruit Products, Punalur are Kerala Government owned companies. Other major
industries in private/cooperative sector are Aluminium Industries Ltd., Kundara, Thomas
Stephen & Co., Kollam, Floorco Paravur, Cooperative Spinning Mill, Chathannur and
Punalur Paper Mills, Punalur. About 1963 SSI units have been registered in the district.
Trivandrum industrial goods, handloom
Industrial goods and handloom are major commodities in Trivandrum which contribute
containerised trade in Kerala. The industrial scenario in Trivandrum is dominated by oil
mills, cashew factories, cotton textiles, saw mills, printing units, rubber industrial units,
chemical units, match factories and general engineering units. There is an industrial estate
at Pappanamcod and handloom weaving is prevalent at Balaramapuram, Amaravila,
Kulathur and Chirayinkeezhu, which are located in the suburbs of the city.
The major companies in the district are Travancore Titanium Products Ltd (TTP), English
Indian Clays Limited, Kerala Automobiles Ltd and Hindustan Latex Limited.
Kozhikode (Calicut)
Kozhikode district represents one of the industrially advanced areas of the state, with
many small scale industries along with a limited number of large scale companies. Some
of the more important large and medium scale industries are textiles rayons, grade pulp,
68
Hinterland Mapping
soap, cosmetics, oil, wheat flour, steel products, tiles, sea food processing and
pharmaceutical companies. There are approximately 20 large and medium scale industrial
units and 18,000 SSI units in the district.
Another major industry is the tile industry. With major factories mostly concentrated at
Feroke-Cheruvannur area, which is rich in quality clay deposits. The tiles produced in the
region have both domestic as well as export market.
Cochin
Traditionally, Cochin is the major business and trading hub in Kerala handling major
commodities like coconut, tea & coffee, rubber, coir, cashew and spices. Therefore, the
Cochin port handles large volumes of these commodities for both export and import. As
per last estimate, 60% of the FY 2008 cashew volumes were handled at the Cochin port in
India. A large number of cashew processing units are based in Cochin & adjoining regions
(Tiruvananthapuram, Kollam, Alappuzha, Thrissur and Kannur). Therefore, Cochin handles
large volumes of imported raw cashew nuts for processing and re-exports.
Currently, Cochin port is served by one CFSs and one Concors rail terminal. One of the
CFS is located at Rajiv Gandhi Container terminal and is managed by the port, whilst one
is managed by Kerala State Warehousing Corporation and the remaining two facilities are
managed by private CFS operators. In all, these four facilities handle around 30,000
loaded teu per annum. Concors siding provides rail link to various cargo centres located
in the immediate and the secondary hinterland.
Table 4.15
Estimated loaded container traffic flow in Kerala (FY08)
Sr.
No.
Location
Cochin
Export
(Teu)
Import
(Teu)
Ratio
(Import to
Export)
Total/
Annum
14,075
15,247
1.08
29,322
Wayanad
2,053
8,210
4.00
10,263
Kannur
5,747
5,982
1.04
11,729
Trichur
10,116
11,875
1.17
21,992
Allapuzha
3,225
12,902
4.00
16,127
Kollam
12,433
11,025
0.89
23,458
Trivandrum
10,556
7,037
0.67
17,593
Others
9,676
6,451
0.67
16,127
Share
Direct
by
ICDs
to Port
Share
0%
100%

JNPT/
Chennai Mangalore Cochin
Mumbai
0%
0%
0.00%
100.00%
69
Hinterland Mapping
4.3.2 Industrial infrastructure

Table 4.16
List of functional SEZ in Kerala as on August 4, 2009
Export Projection
2008-09 (INR Cr)
Name of the SEZ
Set up by
Location
Type
Cochin Port Trust,

Economic Zones
Puthuvypeen
Port
Based
UI
Cochin Port Trust,

Vallarpadam

Economic Zones
Port
Based
Ui
Cochin Special
Economic Zone
Central Government:
Cochin,
Multi
product
2000
Electronic Technology
Park

Economic Zones
Trivandrum
IT/ITES
79.83
Infopark

Economic Zones
Kochi
IT/ITES
110.4
Note: UI under Implementation

70
Port Infrastructure
5. Port infrastructure
Objective
To identify
Competing port infrastructure for container handling facilities in India
Container handling capacity expansion plans
Key Findings
Currently, ports in Gujarat and Maharashtra have the highest container handling
capacity in India with almost 68% of the total handling capacity in India available at
these ports. As per the recent capacity expansion plans, most of the capacity is being
developed at the lower east coast with share of the region estimated to grow from
16% to 26% over the next decade. With the commissioning of Vizhinjam and
expansion of Cochin port, the estimated share of lower west coast ports is likely to
grow from 6% to 8% during the same period.
Chennai is the top port in south India in terms of various port attractiveness,
parameters discussed in the chapter followed by Cochin & Tuticorin which share
similar measure of port attractiveness.
Conclusion
Vizhinjam faces stiff competition from existing and upcoming facilities in the region which
share a common market. The current supply demand scenario in lower west coast
suggests high underutilisation of existing capacity. Therefore with addition of new
capacities in the region and historic traffic growth rates suggest that this region would
continue to face problems of unutilised capacities in terms of gateway traffic handled by
the ports.
71
Port Infrastructure
Table 5.1 and Figure 5.1 provides geographical location of ports in India that are currently
handling container traffic, together with proposed new container ports that are expected to
be developed and will be operational during the course of the current decade.
Table 5.2 gives an overview about container handling facilities at various ports in India.
Table 5.1
Existing and proposed container ports in India
Coast / Region
Port
Coast / Region
Port
Upper West Coast
Kandla
Upper East Coast
Kolkata
Mundra
Haldia
Pipavav
Paradip
Dighi*
Kulpi*
Positra*
Dhamra*
Hazira*
Greater Mumbai
Lower West Coast
Mumbai
Central East Coast
Visakhapatnam
JNP
Gangavaram
Rewas*
Machilipatnam*
Dighi*
Kakinada
Mormugao
Lower East Coast
Tuticorin
New Mangalore
Chennai
Cochin
Ennore*
Vizhinjam*
Krishnapatnam
Pondicherry
Karaikal
Note: * Proposed
India now has a mix of government and private container ports/terminals, which are
actively involved in container handling. This is result of the Indian government initiative to
involve the private sector through BOT schemes and privatisation for infrastructure
development. The most noteworthy example of this initiative has been the development of
two new terminals at Jawaharlal Nehru Port (JNP). Among the private ports, Mundra has
emerged as a leading container handling facility and has gained significant market share
over the last few years. Now the government has similar plans for the development of port
sector and it will definitely benefit the container ports of India. Moreover, many new ports
are also now emerging to take advantage of the growth of containerisation throughout
India, as it continues to penetrate the general cargo and break bulk markets. There are an
increasingly higher number of ports either currently handling container traffic or looking to
do so in the next few years.
72
Port Infrastructure
Figure 5.1
Existing and proposed container handling ports in India
Kandla
Mundra
Kolkata
Positra
14% (69%)
Haldia
Pipavav
Kulpi
Dhamra
Paradip
Hazira
Upper West Coast

Mumbai
55% (102%)
Rewas
Dighi
6% (78%)
Upper East Coast

JNP
Visakhapatnam
Gangavaram
Kakinada
Greater Mumbai
Machilipatnam
Mormugao
1% (29%)
Central East Coast

Krishnapatnam
Ennore
Chennai
4% (44%)
Puducherry
Mangalore
21% (99%)
Lower West Coast

Vallarpadam
Cochin
Vizhinjam
KarikalLower East Coast

Tuticorin
Market Share (Capacity Utilised)
Proposed
Existing
73
5.1
Port Infrastructure
Competing port facilities
Table 5.2
Overview of ports and facilities handling containers at the end of 2008 - 09
(In 000 teu)
Port
Landlord
Terminal
Operator
Upper West
Kandla*
Mundra
Mundra
Pipavav
Public
Private
Private
Private
ABG/PSA
DPW
MPSEZ
APMT
Greater Mumbai
Mumbai (Bombay)**
JNPT
NSICT
GTI
Public
Public
Public
Public
Govt Of India
Govt Of India
DPW
APMT/Concor
Lower West
Mormugao***
Cochin
New Mangalore***
Public
Public
Public
MPT
DPW
Govt Of India
Lower East
Chennai
Tuticorin
Public
Public
DPW
PSA/SICAL
Central East
Vishakapatnam
Public
DPW/ULAI
Upper East
Kolkata
Haldia
Paradip***
Public
Public
Public
ABG/PSA
Govt Of India
Govt Of India
2008/09+
Throughput
(Teu)
2008/09
Estimated Capacity
(Teu)
Quay
Length
(m)
No. of Quay
Cranes
Yard
Area
(ha)
Water Depth
Range
(m)
138
718
60
182
300
900
500
750
46%
80%
12%
24%
545
632
631
735
2
6
4
6
40
32
24
25
10
15-17.5
15-17.5
12.5
92
1,063
1,427
1,462
500
1,200
1,200
1,400
18%
89%
119%
104%
656
680
600
712
2 & ships gear

8
8
10
4
35
30
52
8.8-9.1
12-13.5
12-13.5
12-13.5
14
260
29
50
500
50
28%
52%
58%
902
414
1,313
1 mobile crane & ships gear

2
3 mobile cranes & ships gear
5
7
10
14-May
10.7
7-10.5
1,143
439
1,200
400
95%
110%
885
370
7
2
18
8
13
11.9
90
200
45%
449
10
10.2
302
127
2
300
300
50
101%
42%
4%
780
218
250
2 mobile cranes & ships gear

Ships gear
Ships gear
34
8.3-12.2
11.5-12.2
* New facility has started operations ** Includes boxes handled at general cargo berths.
Capacity
Utilization
(%)
*** No dedicated container handling facility. Source: Drewry Research
74
5.2
Port Infrastructure
Projected development of container handling capacity at ports in India

In addition to assessing the development of cargo, it is also essential to look at the
container port capacity that will be made available to the shippers in future. This analysis
has to be done on three different levels i.e. at individual port level, at regional level and
within India as a whole.
Table 5.3 provides a breakdown of known or proposed expansion plans within the Indian
container port market and an increase in container capacity by 2020-21. In overall terms,
container handling capacity in India is set to increase from over 9.6m teu per annum in
2008-09 to around 38.1 m teu per annum by 2020-21, reflecting an annual average growth
of almost 11.9% per annum. Of the five individual port regions contributing towards this
increase, upper west coast ports are expected to increase at an annual average rate of
around 11.2% per annum, as the container capacity in the region increases from 2.4m teu
per annum in 2008-09 to 8.8 m teu per annum by 2020-21. The greater Mumbai region
during this period is expected to grow at a rate of around 9.4% as the capacity is expected
to increase from 4.3m teu in 2008-09 to 12.7m teu in 2020-21.
In the region of lower east coast, Chennai and Ennore are the main ports which will boost
the capacity. At present, the envisioned growth in this region is 16.3% up to 2020-21. The
capacity is likely to increase from 1.6m teu in 2008-09 to 9.8m teu by 2020-21.Capacity
growth in the ports located on the central east coast of India between 2007-08 and 202021 could be around 14.7% mainly because of proposed new container terminals at
Gangavaram. The total capacity in the region is expected to increase from 0.25m teu in
2008-09 to 1.3m teu 2020-21.
The upper east coast is expected to witness some new capacity addition with growth rate
of 11.7%. Even this rate will be possible only if the known development plans related to
Dhamra and Kulpi will come into play. The expected time of commissioning of Dhamra is
2013-14 i.e. three year after the completion of their first phase while Kulpi is expected to
be operational by 2016-17. The overall capacity is likely to increase from 0.65m teu in
2008-09 to almost 2.45m teu by 2020-21.
Most of the ports, which currently do not have any immediate expansion plans have
capacity in terms of land and waterfront and these ports can leverage these key
infrastructure for implementing any new container handling capacity over short and
medium term. For example, many proposed Greenfield ports have expressed interest in
container handling capabilities but without any concrete plan in terms of infrastructure, cost
estimates and time scale. Thus these announcements are not under consideration in this
study else it would inflate the total capacity to a large extent.
Table 5.4 provides an indication of the current and future share of the total Indian container
market capacity held by each terminal, port and region. On a regional basis, the share of
upper west coast ports is likely to decrease from almost 25% in 2008-09 to 23% by 202021, at the same time, for ports in Greater Mumbai region share may decline from 44% to
33% in 2008-09 to 2020-21 in Indian containers port market. Combined container handling
capacity of ports located in the upper west coast and Mumbai region will decrease to 56%
by 2020-21, compared to 69% in 2008-09.
The expected capacity expansion in upper west coast and Greater Mumbai region clearly
indicates that these two regions are likely to dominate the Indian trade over long term
period. This dominant share of the upper west coast and the Greater Mumbai region again
75
Port Infrastructure
emphasize the fact that the ports in these locations will continue to target rich hinterland of
north and north western India to feed their growing appetite.
The ports in lower west coast of India currently accounts for almost 6% of Indias container
handling capacity. This regions share will steadily increase to 8% by 2020-21. This growth
can be primarily attributed to capacities at Vallarpadam in Cochin and Vizhinjam. DP World
currently manages the existing terminal at Cochin; however it would transfer its operations
to the new terminal upon its completion. Thus the overall percentage of ports in west coast
of India will be around 64.% by 2020-21, compared to 75% in 2008-09.
In the current scenario, ports in the lower east coast are likely to gain market share. The
share of container port capacity in the region is likely to increase to 26% by 2020-21,
compared to around 16 % in 2008-09. The major growth centres would be Chennai,
Ennore and Krishnapatnam, while Tuticorin and other proposed new facilities are likely to
provide limited additional capacities.
The container handling capacity in central east coast region is likely remain around 3% by
2020-21. Similarly, the upper east coast region is likely to maintain its share, with container
handling capacity decreasing from 7% in FY 2009 to 6% till 2020-21. The new major
container handling facilities expected in the region are proposed container terminal at
Dhamra and two new multipurpose berths at Paradip port.
76
Port Infrastructure
Table 5.3
Development of capacity at Indian container handling ports FY09 to FY21
(000 teu)
Port
Terminal
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
CAGR
300
900
500
300
900
750
300
1,200
750
300
1,200
1,100
300
1,200
1,100
300
1,200
1,100
1,200
300
1,200
1,100
1,200
300
1,200
1,100
2,400
300
1,200
1,100
2,400
300
1,200
1,100
2,400
300
1,200
1,100
2,400
300
1,200
1,100
2,400
300
1,200
1,100
2,400
0.0%
2.4%
6.8%
1,400
1,650
1,950
2,300
2,300
3,500
3,500
4,700
4,700
4,700
4,700
4,700
4,700
10.6%
750
750
750
750
1,100
1,100
500
1,100
500
1,100
750
500
1,100
750
500
1,100
1,200
1,000
1,100
1,200
1,000
1,100
1,200
1,500
1,100
1,200
1,500
3.2%
2,450
2,700
3,000
3,350
3,700
5,400
5,400
7,350
7,350
8,300
8,300
8,800
8,800
11.2%
500
500
500
500
500
500
750
750
750
1,100
1,100
1,100
1,100
500
500
500
1,000
1,000
1,000
1,250
1,250
1,250
1,500
1,500
1,500
1,500
9.6%
1,200
1,200
1,400
1,200
1,200
1,800
1,200
1,200
1,800
1,200
1,200
1,800
1,200
1,200
1,800
600
1,200
1,200
1,800
600
1,200
1,200
1,800
600
1,500
1,200
1,200
1,800
600
2,200
1,200
1,200
1,800
600
2,200
1,200
1,200
1,800
600
3,700
1,200
1,200
1,800
600
3,700
1,200
1,200
1,800
600
4,400
1,200
1,200
1,800
600
4,400
0.0%
0.0%
2.1%
3,800
4,200
4,200
4,200
4,800
4,800
6,300
7,000
7,000
8,500
8,500
9,200
9,200
7.6%
500
750
500
1,000
500
1,500
500
1,500
500
1,500
500
8,750
9,500
11,500
12,000
12,700
12,700
Upper West Coast

Kandla
Mundra
Mundra
Mundra (South Basin)
KPT/ABG-Voltri
MICT
MPSEZ
New Terminal
Mundra total
Pipavav
Hazira*
Positra*
GPPL
Hazira
Positra
Sub-total
Greater Mumbai
Mumbai
Mumbai
Ballard Pier/Indra Docks

Offshore Terminal
Mumbai total
JNP
JNP
JNP
JNP
JNP
JNPCT
NSCIT
APMT/Concor
Proposed 330m-BOT basis
4th Terminal Phase 1&2
JNP total
Rewas*
Dighi *
New Development
New Development
Sub-total
4,300
4,700
4,700
5,200
5,800
5,800
7,550
9.4%
77
Port Infrastructure
Table 5.3 (contd)

Port
Terminal
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
CAGR
50
50
50
50
250
250
250
500
500
500
500
500
500
21.2%
750
750
1,000
1,000
1,000
1,000
1,000
1,500
1,500
1,500
1,500
1,500
500
750
750
1,000
1,000
1,000
1,000
1,000
1,500
1,500
1,500
1,500
1,500
9.6%
50
50
50
50
50
0.0%
Lower West Coast

New Mangalore
NMPT
Cochin
RGT
Cochin
Vallarpadam
Cochin total
Mormugao
MPT
500
Vizhinjam*
Sub-total
600
850
850
1,100
400
400
400
400
1,300
50
50
50
50
50
50
50
50
500
500
1,000
1,000
1,000
1,000
1,000
1,000
1,800
1,800
2,550
3,050
3,050
3,050
3,050
3,050
14.5%
0.0%
Lower East Coast

Tuticorin
Berth 7 (PSA/SICAL)
Tuticorin
Berth 8
Tuticorin total
Chennai (Madras)
CCTL
Chennai (Madras)
2 nd Container Terminal
Chennai (Madras)
Mega terminal
Chennai total
400
400
400
400
400
400
400
400
400
400
400
400
400
400
400
400
600
800
800
800
800
800
800
800
800
5.9%
0.0%
400
400
400
1,200
1,200
1,200
1,200
1,200
1,200
1,200
1,200
1,200
1,200
1,200
1,200
1,200
750
750
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,200
1,200
1,200
2,400
2,400
2,400
1,200
1,950
1,950
400
400
200
2,200
2,200
Ennore
2,200
2,200
2,200
2,200
3,400
4,600
4,600
4,600
2,400
1,500
1,500
1,500
2,400
2,400
2,400
2,400
Puducherry*
Proposed
250
250
500
500
500
500
500
500
Karaikal *
Proposed
250
250
500
500
500
500
500
500
Krishnapatnam
New development
250
250
500
500
1,000
1,000
1,000
1,000
5,250
5,250
6,000
6,900
8,600
9,800
9,800
9,800
Sub-total
1,600
2,350
2,350
2,600
2,800
11.8%
16.3%
78
Port Infrastructure
Table 5.3 (contd)

Port
Terminal
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
CAGR
200
200
300
300
300
300
300
300
500
500
500
500
500
7.9%
200
200
200
500
750
750
750
750
Central East Coast

Vishakapatnam
VCT
Gangavaram *
Proposed
Kakinada
50
50
50
50
50
50
50
50
50
50
50
50
50
0.0%
Sub-total
250
250
350
350
350
550
550
550
1,050
1,300
1,300
1,300
1,300
14.7%
50
50
50
50
50
200
200
400
400
400
400
400
400
18.9%
500
500
500
750
750
750
750
750
Upper East Coast

Paradip
PPT
Dhamra
Proposed
Kolkata
KDS
300
300
500
500
500
500
500
500
500
500
500
500
500
4.3%
Haldia
HDS
300
300
300
300
300
300
300
300
300
300
300
300
300
0.0%
Kulpi *
Proposed
500
500
500
500
500
Sub-total
650
650
850
850
850
1,500
1,500
1,700
2,450
2,450
2,450
2,450
2,450
11.7%
9,850
11,500
12,100
13,450
14,800
20,300
22,050
26,900
30,300
35,200
36,900
38,100
38,100
11.9%
Note: * Doubtful capacities Capacities although announced may not adhere to the scheduled commissioning deadline
79
Port Infrastructure
Table 5.4
Capacity share of Indian container handling ports, FY09 FY21
Port
Terminal
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Upper West Coast

Kandla
KPT/ABG-Voltri
3%
3%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
1%
Mundra
MICT
9%
8%
10%
9%
8%
6%
5%
4%
4%
3%
3%
3%
3%
Mundra
New Terminal
5%
7%
6%
8%
7%
5%
5%
4%
4%
3%
3%
3%
3%
Mundra
(South Basin)
0%
0%
0%
0%
0%
6%
5%
9%
8%
7%
7%
6%
6%
Mundra total
14%
14%
16%
17%
16%
17%
16%
17%
16%
13%
13%
12%
12%
Pipavav
GPPL
8%
7%
6%
6%
7%
5%
5%
4%
4%
3%
3%
3%
3%
Hazira
Shell
0%
0%
0%
0%
0%
2%
2%
3%
2%
3%
3%
3%
3%
Positra
Reliance
0%
0%
0%
0%
0%
0%
0%
2%
2%
3%
3%
4%
4%
25%
23%
25%
25%
25%
27%
24%
27%
24%
24%
22%
23%
23%
Sub-total
Greater Mumbai
Mumbai
Ballard Pier/Indra Docks
5%
4%
4%
4%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Mumbai
Offshore Terminal
0%
0%
0%
0%
3%
2%
3%
3%
2%
3%
3%
3%
3%
5%
4%
4%
7%
7%
5%
6%
5%
4%
4%
4%
4%
4%
Mumbai total
JNP
JNPCT
12%
10%
10%
9%
8%
6%
5%
4%
4%
3%
3%
3%
3%
JNP
NSCIT
12%
10%
10%
9%
8%
6%
5%
4%
4%
3%
3%
3%
3%
JNP
APMT/Concor
14%
16%
15%
13%
12%
9%
8%
7%
6%
5%
5%
5%
5%
JNP
Proposed 330m-BOT basis
0%
0%
0%
0%
4%
3%
3%
2%
2%
2%
2%
2%
2%
JNP
4th Terminal Phase 1&2
0%
0%
0%
0%
0%
0%
7%
8%
7%
11%
10%
12%
12%
39%
37%
35%
31%
32%
24%
29%
26%
23%
24%
23%
24%
24%
JNP total
Rewas
New Development
Dighi
Sub-total
0%
0%
0%
0%
0%
0%
0%
2%
2%
3%
4%
4%
4%
0%
0%
0%
0%
0%
0%
0%
0%
2%
1%
1%
1%
1%
44%
41%
39%
39%
39%
29%
34%
33%
31%
33%
33%
33%
33%
80
Port Infrastructure
Table 5.4 (contd)

Port
Terminal
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
New Mangalore
NMPT
0.5%
0.4%
0.4%
0.4%
1.7%
1.2%
1.1%
1.9%
1.7%
1.4%
1.4%
1.3%
1.3%
Cochin
RGT
5%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Cochin
Vallarpadam
0%
7%
6%
7%
7%
5%
5%
4%
5%
4%
4%
4%
4%
5%
7%
6%
7%
7%
5%
5%
4%
5%
4%
4%
4%
4%
Lower West Coast
Cochin total
Mormugao
0.5%
0.4%
0.4%
0.4%
0.3%
0.2%
0.2%
0.2%
0.2%
0.1%
0.1%
0.1%
0.1%
Vizhinjam
MPT
0%
0%
0%
0%
0%
2%
2%
4%
3%
3%
3%
3%
3%
Sub-total
6%
7%
7%
8%
9%
9%
8%
9%
10%
9%
8%
8%
8%
4%
3%
Lower East Coast

Tuticorin
Berth 7 (PSA/SICAL)
Tuticorin
Berth 8
Tuticorin total
Chennai (Madras)
CCTL
Chennai (Madras)
2 nd Container Terminal
Chennai (Madras)
Mega terminal
Chennai total
Ennore
3%
3%
3%
2%
2%
1%
1%
1%
1%
1%
1%
0%
0%
1%
2%
2%
1%
1%
1%
1%
1%
1%
4%
3%
3%
3%
4%
4%
4%
3%
3%
2%
2%
2%
2%
12%
10%
10%
9%
8%
6%
5%
4%
4%
3%
3%
3%
3%
0%
7%
6%
7%
7%
5%
5%
4%
3%
3%
3%
3%
3%
3%
7%
6%
6%
12%
17%
16%
16%
15%
11%
10%
8%
7%
10%
12%
12%
12%
0%
6%
0%
0%
0%
0%
7%
7%
6%
8%
7%
7%
6%
Puducherry
Proposed
0%
0%
0%
0%
1%
1%
2%
2%
1%
1%
1%
1%
Karaikal
Proposed
0%
0%
0%
0%
1%
1%
2%
2%
1%
1%
1%
1%
Krishnapatnam
New development
0%
0%
0%
0%
0%
1%
1%
2%
2%
3%
3%
3%
3%
16%
20%
19%
19%
19%
26%
24%
22%
23%
24%
27%
26%
26%
Sub-total
81
Port Infrastructure
Table 5.4 (contd)

Port
Terminal
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
1%
Central East Coast

Vishakapatnam
VCT
2%
2%
2%
2%
2%
1%
1%
1%
2%
1%
1%
1%
Gangavaram
Proposed
0%
0%
0%
0%
0%
1%
1%
1%
2%
2%
2%
2%
2%
Kakinada
1%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Sub-total
3%
2%
3%
3%
2%
3%
2%
2%
3%
4%
4%
3%
3%
Upper East Coast

Paradip
PPT
1%
0%
0%
0%
0%
1%
1%
1%
1%
1%
1%
1%
1%
Dhamra
Proposed
0%
0%
0%
0%
0%
2%
2%
2%
2%
2%
2%
2%
2%
Kolkata
KDS
3%
3%
4%
4%
3%
2%
2%
2%
2%
1%
1%
1%
1%
Haldia
HDS
3%
3%
2%
2%
2%
1%
1%
1%
1%
1%
1%
1%
1%
Kulpi
Proposed
0%
0%
0%
0%
0%
0%
0%
0%
2%
1%
1%
1%
1%
7%
6%
7%
6%
6%
7%
7%
6%
8%
7%
7%
6%
6%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Sub-total

82
5.3
Port Infrastructure
Capacity projects at upper West Coast ports
Kandla
Kandla handle various commodities in addition to containers, most notably fertilisers,

granite, crude & POL, general cargo, timber and steel. ABG Heavy Engineering was
awarded the mandate to develop and operate a container terminal at Kandla port. ABG
has tied up with PSA which has 49% stake in the ABG Kandla Container Terminal. The
new container terminal which started operations in 2006-07 is intended to handle 0.5m teu
each at berth number 11 and 12 of Kandla port. The container terminal has witnessed
mixed fortune in terms of container handling during past couple of years with the container
throughput registering an increase of around 19.6% in 2006-07 but a subsequent decrease
of volume in 2007-08 and 2008-09. It was expected that the new container terminal will
result in higher container throughput at Kandla port. However, increasing competition from
Mundra Port and lack of container train services has hampered the expected growth in
container traffic.
Kandla is known to have a number of different strategies in the form of short, medium and
long-term plans. The port has a long term strategy to increase its draft to handle large size
vessels. On the logistics front, Kandla stands to benefit from the Samakhiali-Palanpur
railway line conversion in which the port has invested Rs 540 million ($1.1mn). This new
railway connectivity will improve Kandlas connectivity to large northern India hinterland by
130 km. Kandla also stands to benefit from its primary hinterland which is an upcoming
industrial belt.
Mundra
Mundra port is located on the west coast of the Gulf of Kutch and is a multipurpose facility
handling dry and liquid cargoes, fertilisers, ores and containers. Mundra International
Container Terminal (MICT) owned and operated by DP World became operational during
2003 and has shown a strong growth over this period with traffic in 2006-07 and 2007-08
increasing to 571,336, and 711,552 teu respectively. However, on account of general
slowdown in trade, the container throughput remained almost stagnant, with total traffic
estimated at 718,000 teu in 2008-09. In 2007, Mundra Port commissioned its second
terminal with Mundra Port & SEZ being the terminal operator; however volume at the
terminal hasnt picked up well with the second terminal handling close to 60,000 teu in
2008-09.
With the commissioning of the second terminal the port capacity has been further
increased by half a million teu which could be further augmented to 1.2 million teu Mundra
port has a big advantage of having a draft of 13.5m in channel and 17.5m at berths.
Mundra also has huge land available to develop wide network of CFSs and other support
infrastructure. In addition to this, port has plans to develop a new basin (South Basin) for
additional cargo berths, including containers. The expected container handling capacity of
the new terminal is likely to be in the range of 2.5-3.5 m teu. However, this would be
developed in phases and the phase 1 is expected to be commissioned by 2013-14.
The port has advantage of being closer to various cargo centres in the northern hinterland,
as compared with ports in the Greater Mumbai region. To take advantage of this proximity
and to facilitate the cargo growth, the port has privately developed 57 km rail line linked to
the national grid and is also well connected to the national highway network.
83
Port Infrastructure
The port is also developing an SEZ within its vicinity area which originally was to cover
13,000 hectares. However, with the recent changes in policies, the size of the SEZ will
have to be less than 5,000 hectares. The first phase of SEZ includes development of only
2,500 hectares leaving vast scope for further development.
Pipavav port
Pipavav is located in the Saurashtra region in the state of Gujarat on the northern shore of
the Gulf of Cambay. The current port was incorporated as one of Indias earliest private
ports (in 1992) and this facility is now operated by APMT. The port is safe guarded by
natural break waters and has wave height of up to 0.5m for most of the time. The port has
taken up the initiative to increase its draft from 12.5m currently to 14.5m. The project is
expected to be completed in financial year 2009-10.
Initially, container operations were undertaken using one mobile harbour crane used in
tandem with ships gear (where ever possible). However, the Port of Pipavav has now
provided 735m of quay length for container handling along with six quay cranes for
operations at the container berth. The total container handling capacity of the existing
terminal is estimated at around 0.75mn teu. The port has further ordered for 2 new quay
cranes and 6 RTGs to be commissioned in FY10. The development activities are expected
to raise the container handling capacity to 1.1mn teu in next two three years. The port
further plans to develop additional container handling capacity by developing a berth of
approximately 365m length by 2013. This proposed expansion depends upon approval
from the Gujarat Maritime Board.
To take care of its rail connectivity, the Pipavav port has launched a special purpose
vehicle called Pipavav Rail Corporation Limited (PRCL) with the Ministry of Railways as its
partner. The port has developed three rail sidings inside the port limit in close proximity to
the warehouses and the berth for efficient and speedy handling of cargo.
Hazira port
As per recent developments, Hazira Port Private Limited, which is a subsidiary of AngloDutch Shell and Total of France, is planning to develop a container and general cargo
terminal at Hazira. The company has earmarked an initial investment of about Rs 13-14
billion ($277-298mn) for the project. Hazira is located just 193 km north of Mumbai and is
close to the main Indian trading route i.e. N.H.8 linking JNP/Mumbai with the northern
cargo-generating states. The Hazira port also has the advantage of being located very
close to the main rail corridor running between Delhi and Mumbai and has the potential to
become an appealing port of call for container vessels. While initial carrier inertia could
slow the ports hopes to attract significant container cargo to its new facility; this is likely to
only be a short-term concern. The port is easily accessible already and connectivity to the
hinterland by road and rail can be improved to a large extent with slight up gradation and
some new links.
However, the proposed new terminal has already been delayed by 2-3 years. In a recent
development, The Adani promoted Mundra Port and SEZ Ltd (MPSEZL) has been
awarded the Letter of Intent (LoI) for development of non-LNG port facilities at Hazira.
84
Port Infrastructure
Positra
Positra port was promoted by SKIL Infrastructure with a planned investment of around
1,200 crore. Subsequently, Reliance Ports and Terminals have picked up 90% stake in the
project. As per the initial plans the port will have a draft of 16m and phase 1 development
would include a container terminal of 1.5m teu capacity. In addition to this port is also likely
to have a shipyard and SEZ. The container terminal at Positra is expected to compete for
Northern hinterland traffic with other ports in the region for which the port is planning to
provide adequate rail and road connectivity. However, like many other Greenfield projects,
the commissioning of the proposed new port could get delayed. Considering this, we
estimate that the new port is unlikely to be commissioned before 2015-16.
5.4
Capacity projects at Greater Mumbai ports
Mumbai (Bombay)
The Port of Mumbai (MbPT) has traditionally been the principal gateway for trade moving
to/from India. However, the port currently handles more bulk cargo and the share and
volume of containerised cargo has been constantly decreasing. Water depth is a major
limiting factor at Mumbai, with draft restricted to a maximum of only 9.7m and in many
places this falls to 9.1m. The growth of competing facilities in the region continues to have
a detrimental effect on Mumbai and it is noticeable that the ports container traffic has
fallen from 0.58mn teu in 1996-97 to less than 0.1mn teu in 2008-09. This reflects a trend
that is set to continue over the short and medium term if the port fails to augment its
container handling facilities. Part of the problem is the ports insufficient (and inefficient)
infrastructure, especially compared to other newer and more advanced regional ports.
The port trust has taken initiatives to re-establish itself in the container business. The port
is going ahead with an offshore container terminal project, which initially is expected to
take over the current container traffic of the port. The license agreement, between the
Mumbai Port Trust (MbPT) and Indira Container Terminal Private Limited (ICTPL),
promoted by Gammon India Ltd and Dragadoss SPL, Spain has been signed for the
construction of offshore container terminal (OCT) on build, operate, transfer (BOT) basis.
As part of the agreement, the ports existing container terminal has already been handed
over to ICTPL, Officially, the new terminal is due to start operation in December 2010.
However, as per our estimate, the new offshore terminal is unlikely to be commissioned
before 2011-12, although the port has been aggressively promoting this project.
Rail and road connectivity projects, namely, Vadala-Kurla dedicated rail freight corridor
project and Eastern Express Freeway project, would be part of the container terminal to
facilitate faster and efficient movement of container traffic in and out of port. However, the
port authorities would be required to resettle and rehabilitate about 3,000 slum-dwellers
before the work on the dedicated railway freight corridor starts.
Jawaharlal Nehru Port (JNP)
JNP is one of the relatively new major ports in India on account of having only been
commissioned in 1989. The port is also a good example of public and private partnership
as both the Jawaharlal Nehru Port Trust (JNPT) and Nhava Sheva International Container
Terminal (NSICT) have operating facilities in JNP. APMT is the second private terminal
85
Port Infrastructure
operator at the port which is operating the third container terminal, Gateway Terminal
India Pvt. Ltd (GTI).
Although NSICT has been operating only since 1999, it overtook JNPTs own terminalJNPCT in its second year of operation and reached 1mn teu mark in 2002-03. On the other
hand, GTI which was expected to reach 1.3mn teu by 2011 has already reached its
capacity in 2008-09. Currently all three terminals are handling more than a million teu per
annum.
As a consequence of the opening of NSICT, the share of container traffic at Nhava Sheva
port showed a significant shift of traffic towards NSICT in the initial years. Although both
the operators have identical facilities the productivity offered by NSICT has been an instant
success in luring container traffic away from the state-operated terminal. The third
container terminal at JNPT has been developed and operated under a 30 year BOT
concession agreement by GTI, a consortium of APM Terminals and Concor. The new
terminal has a total berth length of 712m with alongside draft of 13.5m. GTI has eight post
Panamax cranes with total handling capacity of around 1.3mn teu per annum.
Following are the other developmental works at JNPT:
Further extension alongside existing NSICT berth by 330m increasing the capacity by
0.6mn teu.
The port is also planning to develop fourth container terminal in two phases. The
Board of Trustees of the port have approved to develop the fourth terminal on BOT
basis. Draft Request for Qualification is prepared, after approval of the Board the
same has been submitted to the Shipping ministry for approval.
Deepening and widening of main harbour channel and JNP channel. Presently the
port can handle vessels with draft of 12.5m using tidal window, so deepening of
channel is very important as container ship sizes are increasing to achieve economies
of scale and to accommodate increasing volumes.
The port is well connected to N.H.4, N.H.17 and S.H.54. Now the port has formed a
special purpose vehicle with National Highway Authority of India and CIDCO to
strengthen its port network. The main task under this activity is to increase the number
of lanes of state as well as national highways along with providing some new link for
the evacuation of cargo from the port.
Apart from the above the port is also actively strengthening roads which are inside as
well as outside the port. The port is also deploying additional facilities like machineries
and equipments and developing its back up facilities for the terminals it has planned.
The delay in implementation of 330m terminal and dredging is putting immense pressure
on the existing terminals, which are already operating at maximum capacity. Therefore,
JNP needs to expedite the implementation of its new capacity augmentation projects to
maintain its market share over short and medium term.
Rewas Port
The second new development on the west coast of India, the Rewas port project
represents a Build Own Operate and Transfer (BOOT) agreement between privately
owned Rewas Port Ltd and Maharashtra Maritime Board. The port is located 10kms south
86
Port Infrastructure
of JNP. The proposed new port at Rewas has plans to have dedicated, specialised
container terminals. On paper, this project certainly has a lot of positives. In addition to the
size of the facility it has potential to be developed as a deep draft port. The Rewas port is
located near Mumbai region and can drive some benefit from the container traffic being
generated in this immediate hinterland to provide initial momentum to the port. Further,
proposed major SEZs in Mumbai and Navi Mumbai area, could also add to the existing
cargo base in the region.
However, the implementation of the port has been delayed due to various factors. Some of
the issues leading to delays are:
Dispute between Mumbai port and Rewas Port on payment of royalty for the right of
seaway. Part of the approach channel of Rewas port passes through the Mumbai port
territorial water.
Delay in transfer of land notified for the project.
Delay in implementation of SEZ project.
Further, in phase I, Rewas port will have to develop a proper road and rail network to
leverage its proximity to Mumbai and to facilitate efficient flow of traffic between various
cargo centres and the proposed new facility. In addition to this phase 1 development would
involve significant dredging. As per the initial estimate the dredging volume could be
around 120 million cubic meters, which could be Indias largest dredging project. The port
plans to have 14.5m draft in phase 1, which will subsequently be increased to 20m.
Dighi Port
Dighi port is proposed to be developed as a multi purpose port. The plan suggests that
port may develop a container terminal in Phase 2. However, there are no details available
about proposed capacity, infrastructure, likely operators etc. The phase 1 development has
already been delayed by 1-2 years. As per Drewrys assessment, Dighi port is unlikely to
have any significant presence in container trade over next 6-7 years.
5.5
Capacity projects at lower West Coast ports
Mormugao
Mormugao Port is a well-established port; it is primarily an iron ore exporting facility.

Container handling activities at the port represent a very nominal part of its current
operations. There are various initiatives underway at the port, although these are not
necessarily just to improve its container handling capabilities. The major container
handling related initiative at Mormugao port is to construct a cruise vessel cum container
berth at Baina. The berths are proposed to be constructed through private participation.
The request for qualification for BOT operator has been issued.
One area where the port has been active recently is with regard to its rail facilities. It has
been modernised and brought to the same gauge as the National Indian Railway Network.
Although this was primarily to support the movement of the ports dominant cargo i.e. iron
ore, container traffic can very well utilise the same facility.
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Port Infrastructure
Cochin
Cochin Port is located in the state of Kerala, 930 km south of Mumbai. It is a diverse port
handling a mix of containers, general cargo, dry cargo and liquid bulk commodities.
Current container activity is undertaken at the Rajeev Gandhi Terminal, which handled
around 0.25mn teu in 2007-08, compared with a design capacity of around 500,000 teu
per annum.
Cochin port is developing an International Container Transhipment Terminal (ICTT) at
Vallarpadam Island. The planned capacity of the ICTT is 3mn teu and for this Cochin port
has signed an agreement with DP World (DPW) in February 2005.
As per the plans, the Government has handed over the existing Rajiv Gandhi Container
Terminal (RGCT) at the port to DP World for handling container cargo. Once
commissioned, DPW will shift operations from RGCT to ICTT, irrespective of the traffic
volumes. Though DPW container operation will transfer RGCT back to the Port Trust after
it commences operations its ICTT, the Government has undertaken not to set up a
competing facility to provide comfort to the investor. DP World will have complete
monopoly over container cargo handling at the Kochi Port until throughput reaches 2.5mn
teu at ICTT.
New Mangalore
Located in Karnataka state, New Mangalore is 170 nautical miles south of Mormugao port
& 191 nautical miles north of Cochin port. It is a diverse port handling with a range of
different cargoes. Its imports include wooden logs, fertilisers, sugar, liquid ammonia, crude
& petro products, while export traffic comprises of iron ore concentrates, iron ore pellets,
granite and plywood.
The port has 13 berths and not a single one is specially earmarked for container cargo. In
fact, the port discontinued the container service to start again only in 2000 after an
agreement with local shippers that the port will get at least 500 container per month. In
2008-09 the port handled around 29,000 teu, which is a miniscule amount. To further
facilitate container trade, New Mangalore port has invited RFQ for development of
container terminal on BOT basis. Given the current schedule, the new terminal should be
commissioned by 2012-13.
Vizhinjam
Vizhinjam, a natural port, is in Tiruvananthapuram district of Kerala state and is just 10

nautical miles away from the international shipping route. The proposed site at Vizhinjam
for developing a port has a natural draft of more than 20 m. It is expected that the
functioning of Vizhinjam port will boost the trade and commercial activities.
The site offers the following unique advantages:
Proximity to international shipping route and East-West shipping axis.
Availability of 20m contour within a nautical mile off the coast.
Minimal littoral drift along the coast and therefore minimizing the requirement for any
maintenance dredging.
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Port Infrastructure
However, the immediate hinterland of Vizhinjam is very limited and majority of this could
be overlapping with the hinterland of other competing ports in the region. Further, before
development of a port, Government will have to plan and invest significant sum for
providing basic infrastructure in terms of road, rail and other social amenities.
5.6
Capacity projects at lower East Coast ports

The main ports in the lower east coast of India are Chennai, Tuticorin, and Ennore. These
ports are working on various plans to increase container handling capacity by creating new
berths and investment in new handling equipments at existing terminals.
Chennai
Chennai, on the lower east coast of India, is a well-established multipurpose port handling
in excess of 50m tonnes per annum across a variety of liquid/dry bulk and general cargo,
covering everything from newsprint, to forest products to iron/steel.
In terms of container handling activities, the port awarded a terminal operating concession
to DP World in November 2001. Currently, Chennai has berth length of 890m for container
handling along with rail mounted quay crane and 16 rubber tyre gantry cranes. A further
350m of quay is expected with capacity eventually reaching an estimated 1.2-1.3mn teu
per annum. However, this additional quay length is dependent on the shifting of iron ore
cargo from Chennai to Ennore. One of the main concerns of Chennai port has been the
congestion within city limits, which hinders smooth movement of containers to/from the
port. This coupled with incidences of disruption of work because of labour related issues
has resulted in port congestion and severe delays in the past and has also resulted in a
shift of traffic to competing ports.
The Chennai port has awarded its 2nd container terminal to PSA. This terminal is aimed at
providing an alternative handling facility to shippers in the region and to enhance the
service standard. The quay length of the 2nd terminal will be up to 826m consisting of East
Quay and South Quay-III. Around 400m of this quay length can be dredged to a depth of
13.5m, which is expected to handle fourth generation vessels. The estimated capacity of
this terminal is 1mn teu per annum.
Chennai Port Trust has invited requests for qualification from prospective developers for
the mega container terminal that would be set up on BOT basis. The mega terminal will
have two new breakwaters with a total length of around 4 km continuous quay length, 18m
alongside depth, basin area of 300 hectares and back up area of 100 hectares. The
terminal can handle ultra large container ships of over 15,000 teu. The technical feasibility
and financial viability reports for the terminal have been prepared. The capacity of the
terminal is expected to be 4-5 mn teu per annum.
The terminal is expected to begin operations in the 12th Plan period (2012-17). As per
Drewry estimates, the terminal is most likely to begin operations by 2015-16, provided two
land-side infrastructure projects namely, widening of road that connects to the port and
elevated corridor projects are implemented.
Ennore
Ennore port is about 24km north of Chennai Port along the coast line in the State of Tamil
Nadu, India. It is the 12th major port and the first Corporatised Port in India. Ennore Port
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Port Infrastructure
was originally conceived as a satellite port of Chennai, primarily to handle thermal coal to
meet the requirement of Tamil Nadu Electricity Board (TNEB). The scope was expanded
taking into account subsequent developments such as the plan of Government of Tamil
Nadu to set up:
A 1,880 mw LNG power project in association with a Private consortium.
A large Petro Chem Park.
A Naphtha Cracker Plant.
In the long term scenario, the Chennai port primarily wanted to handle containerised cargo
and shift a major portion of its bulk cargo to the Ennore port. This was the rationale behind
planning of berths for coal (for users other than TNEB) Iron ore, LNG, POL, Chemical and
other liquids and Crude to serve various industries that would come up in the proposed
Petro Chem Park. These factors have contributed to the evolution of Ennore Port as a
multi-functional energy port.
However, Ennore Port Limited has plans for the development of a container terminal on
BOT basis for handling around 1.5-2.5m teu. The proposed new facility will have a draft of
15m and could have a quay length of 1,000m and backup area of 50 ha. Ennore port had
floated an RFQ document for development of container terminal at the port and had
received good response with 53 global and domestic companies buying the document. Out
of these 22 companies/consortia presented their documents and the following 6 (Six)
applicants were short listed as per the RFQ provisions for the next stage of bidding:
APM Terminals BV.
Consortium of Group Maritime TCB, S.L, Obrascon Huarte Lain S.A (OHL S.A), GE
Mauritius International Holdings and Eredene Capital PLC,
Consortium of Gammon Infrastructure Projects Limited, Dragadoss Servicios

Portuarios Y Logisticos and Leighton Contractors (India) Private Limited,
Consortium of Nippon Yusen Kabushiki Kaisha, Evergreen Marine Corp (Taiwan) Ltd,
Hyundai Merchant Marine Co. Ltd. and Zim Ports (2006) Ltd.
Consortium of Larsen & Tubro Limited and John Keells Holdings PLC.
Consortium of Sterlite Industries (India) Limited, EUROGATE GmbH & CO KGaA KG

and Mota-Engil, S.G.P.S, S.A.
In a recent development, few consortia which had not been selected for the final RFQ
process had filed a petition in the High Court challenging the final selection process. The
high court has passed on a verdict in the favour of the litigants and has directed Ennore
Port Ltd to reconsider its decision after it admitted petitions by five groups that challenged
their exclusion from the bidding. Due to the ongoing legal tangle the project
implementation is expected to get delayed and is now expected to be commissioned by
2013-14.
Tuticorin
The Port of Tuticorin is located on the lower east coast of India in Tamil Nadu state on the
west side of the Gulf of Mannar and represents good geographical location with minimum
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Port Infrastructure
deviation in relation to the main East-West trading routes. The port has two designated
berths for container operations, Berth 7, in which PSA Corp is a major shareholder and
Berth 8 which remains a port trust facility. There are also general cargo berths with a
limited container handling capacity.
The Container vessels calling at the Tuticorin port are primarily feeder vessels with limited
lines offering direct service. The port has initiated a proposal for deepening of the harbour
basin and channel to handle vessels up to 12.8m draught (i.e. from 10.7m to 12.8m) to
meet out the future Container traffic and to attract more main line vessels. To get a laden
draft of 12.8m, the Harbour Basin has to be dredged to a depth of 14m and the approach
channel has to be dredged to a depth of 14.6m. The port also has to take steps to
strengthen its connectivity by rail and road. Although, Golden Quadrilateral will bring the
road to the ports door step, but from there on the connectivity has to be improved to cater
to the local traffic.
Despite various marketing efforts and the involvement of PSA Corp, container traffic
growth has been slow to materialise. The port is planning to develop berth 8 as 2nd
container handling facility. However, nothing much has happened on the project as the
potential investors would thoroughly like to examine the future growth prospects in view of
the slow traffic build up at the existing terminal. Whilst, Tuticorin is competitive due to its
location (especially in order to appeal to transhipment container operators) as a gateway
facility to rival the likes of Chennai and other ports in South India, it has not yet been overly
successful, a position that seems unlikely to change in the near future.
Puducherry
Pondicherry Port is being developed by the consortium comprising Subhash Projects and
Om Metals. As per the terms, the port developer will share 2.65% of annual operating
gross revenues with the Puducherry government. As per the plan the port will have general
cargo berths, bulk cargo berths, liquid terminal and container berths.
Two berths for the container terminal have been fixed in the DPR for the first phase
development and one additional berth in the fourth phase of port development. The port is
targeting to have 0.5mn teu capacity in phase 1, which could be an increase of around 1m
teu, when the terminal operates at full capacity in Phase 4. The port would target Tamil
Nadu as its hinterland and will largely compete for cargo moving from central and southern
Tamil Nadu. The key cargo centres would include Salem, Coimbatore, Madurai and
Tirupur. This means that Apart from Chennai and Ennore, the new container terminal will
face stiff completion from Cochin and Tuticorin.
Karaikal
Karaikal port, being developed by Marg group, is located 250km south of Chennai port and
360km north of Tuticorin port. The first phase of the port is expected to start operations in
2009, with two common berths to handle coal and general cargo. The two berths will have
a depth of 14m, enabling handling of ships with a cargo carrying capacity of 60,000
tonnes. In the second phase, the plan suggests that depth at the channel and at the berth
will be increased to 16m, allowing ships with a cargo carrying capacity of 100,000 tonnes.
The port plans to have an exclusive berth to handle container cargo in the second phase
of its development, which will primarily target the hinterland currently being served by
Tuticorin, Cochin and Chennai. The new terminal will also compete with proposed
container terminal at Puducherry. However, there are no details available about the
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Port Infrastructure
proposed container handling infrastructure to be developed at Karaikal. As per Drewry

estimate, the new terminal is unlikely to be commissioned before 2013-14
5.7
Capacity projects at central East Coast ports
Visakhapatnam
Located in the northern part of the state of Andhra Pradesh, Visakhapatnam has a very
limited presence in Indian container market. However, the port wants to position itself as a
major container gateway for various cargo centres in the East and North India. A new
container terminal was commissioned in June 2003, known as Visakha Container Terminal
(VCT). This is a joint venture between the DPW and United Liner Agencies of JM Baxi &
Co., which was awarded a 30 year BOT contract to operate this new terminal.
VCT is the deepest operational terminal on the East coast with a permissible draft to
accommodate main line vessels of 14.9m draft. The terminal has a dedicated rail facility to
handle full rake of 45 wagons. The port has road connectivity with NH 5 which allows
attracting cargo from the immediate hinterlands. The rail connectivity is also good and port
has received cargo from its secondary hinterland, Delhi and Raipur. However, the
container traffic has shown a steady increase over the last three years. In 2008-09 VCT
handled 90,000 teu compared to 71,120 teu in 2007-08. This represents a strong Y-o-Y
growth albeit on a very small base. The port has rail link with ICDs at Hyderabad and
Nagpur but so far VCT has not been able to attract significant volumes from these
hinterland and is unable to promote itself as an alternate to JNPT and Chennai. Even,
terminals efforts to divert traffic from northern hinterland have not yielded desired results.
Gangavaram
Gangavaram Port is being developed to cater to the present and future requirements of
industries located in the hinterland and the proposed Special Economic Zone, which shall
be located at a distance of 20kms from the port. Gangavaram Port Limited (GPL), a
special purpose company was promoted by a consortium of D.V.S. Raju and Dubai Ports
for developing and operating Gangavaram Port. Subsequently, Malaysian firm Integrax
Berhad has replaced DPW and has acquired 20% stake in Gangavaram port. The new
port is being developed as all weather, deepwater, multi-purpose world-class port facility.
The Port development master plan has been finalized keeping in view the design vessel
size of 300,000 dwt. The main features of the port are:
Breakwaters providing complete protection to berths from waves and swell to facilitate
all weather port operations.
Navigation channel providing adequate maneuvering area for large vessels.
Dry Bulk and General Cargo berths for handling iron-ore, coal, limestone, alumina,
iron-steel products, food grains, etc. and liquid bulk jetties for handling POL cargo.
Marine Oil Terminal consisting of Single Point Mooring, sub-sea pipeline and Crude
Oil Tank farm.
Provision for developing full-fledged container terminal.
Provision for building dry dock for large vessels.
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Port Infrastructure
Adequate backup area for developing stacking yards, covered storage sheds,
container yard, container freight station etc.
Rail and road access up to the stacking yards, storage sheds and container yard.
The Port initially envisages handling dry bulk and general cargoes. Initially the depth at
iron-ore berth will be limited to 20mt, sufficient to accommodate cape size vessel of
200,000 dwt, but subsequently it will be increased to accommodate vessels of 300,000
dwt.
A four-lane expressway of 3.8 kms is being developed by Government of Andhra Pradesh
to connect port with NH 5 running from Chennai to Kolkata. A Greenfield alignment of
around 10 km connects the new port to the main broad gauge line of
Chennai/Vishakhapatnam/Howrah rail corridor, thus giving access to various cargo centres
in northern and southern India.
Considering the development plans, it is expected that Gangavaram port will not have a
dedicated container terminal in phase 1 but the port can develop a dedicated container
terminal in phase 2.
Kakinada
The port of Kakinada is situated on the east coast of India almost midway between Kolkata
and Chennai close to the entrance of the Kakinada River. The port facilities were privatised
in 1999 under an operate-manage-share-transfer scheme to Cocanada Port Co Pvt Ltd, a
consortium in which Precious Shipping, SSA and Konsortium Logistics Berhad were all
members. However, with SSA pulling out of the deal, citing delays to construction as the
main reason, the consortium was renamed Kakinada Seaports Pvt Ltd.
Although this facility is modern (especially when compared to Kolkata) and can offer better
container handling infrastructure, it has struggled to attract significant volume or shipping
line customers, with shippers and the ocean carriers preferring to utilise the established
gateways of Kolkata/Haldia to the north and Chennai in the south.
Krishnapatnam
Krishnapatnam Port Company has been awarded the 50 year BOOST concession by the
Andhra Pradesh Government to develop the existing minor port into a modern deep draft
multipurpose port. Krishnapatnam port development plan includes:
Approximately 10.8 Kms of quay length.
Deep draft of 14-19 meters.
Hinterland connectivity by rail and road.
Ancillary port services.
Phase 1 development includes development of iron-ore and coal berths with a capacity to
handle vessels of up to 65,000 dwt. The iron ore berths were commissioned in 2008. In the
phase 1, port has developed 23 km rail line to connect Krishnapatnam port to the existing
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Port Infrastructure
Venkatachalam siding on the main north-south rail route. Simultaneously, Krishnapatnam

Port Company is planning to develop a container terminal designed to handle post
Panamax vessels. Port is also implementing a rail project, which includes laying of 114 km
long railway track to connect Obulavaripalli in Cuddapah district to provide direct rail
connectivity for iron ore movement from Bellary district.
Krishnapatnam is well located to attract traffic from Southern and Northern Districts of
Karnataka and Northern districts of Tamil Nadu. It can also become a natural gateway for
key cargo centers like Hyderabad, Guntur and Cuddapah in Andhra Pradesh.
5.8
Capacity projects at upper East Coast ports
Paradip
The port of Paradip serves the eastern and central hinterland and primarily deals in dry
bulk cargo. The port has a draft of 13m and has 14 berths. The port has dedicated coal
and iron ore handling berths and handles limited container volumes on account of lack of
demand coupled with limited container handling facilities. However, now the port has
invited bids for development of multipurpose berths to handle clean cargo including
containers. The new berths are part of development of southern dock complex. This new
facility is likely to provide container handling capacity of around 0.4-0.5mn teu per annum.
The ports hinterland will primarily include Orissa and Chhattisgarh. Currently, new
increased investments in steel, mining and associated sectors in ports hinterland are
expected to boost to container traffic. However, Paradip can face stiff completion from
exiting ports like Visakhapatnam and Haldia/Kolkata and new proposed ports like Dhamra.
Dhamra
Dhamra port is being built under the Build Own Operate Transfer (BOOT) plan by the L&T
and Tata joint venture company and is located between Paradip and Haldia port on the
upper east coast of India. It is expected to have a draught of 18 metres. Phase-I, includes
two fully mechanized berths of 350 meters each for handling imports of coking coal,
steam/thermal coal, limestone and export of iron ore. The estimated capacity of Phase-I is
25 million MT per annum. A railway line connecting the port to the Howrah-Chennai
mainline is also being constructed. Phase-I is expected to be ready for commercial
operation by mid of 2010.
While phase-I is primarily aimed at dry bulk cargo, the second phase is likely to have
dedicated container handling berths with adequate infrastructure. The Plan suggests that
the port will have the facilities for handling clean cargo like steel and containers in the
southern part of the port. The port will serve Orissa, Jharkhand and southern part of West
Bengal. Dhamra port can attract traffic from key cargo centres in east India which currently
have no option but to use inefficient Kolkata and Haldia ports. Dhamras ability to handle
deep draft vessels could result in substantial savings for exporters and importers in the
region.
Kolkata/Haldia
Kolkata port is a riverine port with two docks-Kolkata and Haldia. This is a major
commercial hub of East India and generates significant volume of containers. It is the
natural gateway port for land locked states in east India and neighbouring countries like
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Port Infrastructure
Nepal and Bhutan. It is a preferred port for Nepal cargo, as Concor has a dedicated rail
service between KDS and Nepal.The port has limited competition in the region in terms of
container handling facility which helps it in achieving dominant market share.
Being a riverine port, it has a shallow draft of around 7m limiting the size of vessels which
could be handled thus resulting small parcel sizes and higher shipping freight rates. The
facility requires significant investment in annual maintenance dredging to maintain the
minimum draft, the major reason being heavy silting problem at the port. The ports
container handling facility provides limited mechanisation which leads to lower productivity
and slower turnaround of vessels.
Kulpi
Kulpi, located 78 km south of Kolkata is the new proposed Greenfield container port being
built under the BOOT plan. The new port is projected to handle 1 million tonnes of cargo
per annum. The port is proposed in the Kulpi Economic Zone which is proposed to
combine all weather port facilities, environment-friendly ship breaking yard, and an
industrial park as a single integrated hub.
Dubai-based DP World, worlds fourth largest port operator, took over the greenfield Kulpi
Port project as part of its acquisition of P&O in February 2006. The first phase of
development was proposed to have a 450m quay while the second phase would add
another 450m. DP World's partners in Kulpi Port are Indian firm MKJ Enterprises and the
West Bengal Industrial Development Corporation (WBIDC).
Currently, the development is being held up in the absence of an agreement between the
Bengal government and the Calcutta Port Trust (CPT), the custodian of Bengals two
existing ports. A memorandum of understanding was signed between the CPT and the
state government for Kulpi in 2001. The memorandum has to be converted into a formal
agreement. Also, relocation and rehabilitation of local population affected by the project
had turned into a major political issue which is another major reason for project delay.
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5.9
Port Infrastructure
SWOT analysis of port facilities in Lower West & Lower-East India
Lower West Coast
Strengths
Weaknesses
Plans to develop a new cruise cum container
Limited container volumes and capacity no
berth.
known future expansion plans for this traffic all

boxes are handled at general cargo berths only.
Mormugao
State government providing incentives to
Small immediate hinterland limits growth
various industries, which could boost
prospects for container traffic.
container traffic.
Exim trade is again unbalanced with more of
Competition from Ports in Mumbai.
import than export.
New Mangalore
Land and water front available for
Limited container traffic in the immediate
development of dedicated container terminal.
hinterland.
Good road and rail links and connected to
Competition from new developments at Cochin.
Goa and Mumbai by Konkan Railway. Exim

trade is only 74% balanced indicating more of
export than import.
Major trade and commercial hub of Kerala,
Large common hinterland shared by Chennai
providing significant volumes.
and Tuticorin.
Privatisation of existing container terminal
Inadequate rail connectivity hampering cargo
expected to result in higher growth in
movement from secondary hinterland.
container traffic.
Cochin
Plans to develop deep draft container terminal
Kerala state is not one of the favoured
at Vallarpadam, which will be competing with
destinations for new investments, thus limiting
Colombo for transhipment traffic.
future cargo growth in immediate hinterland.

Frequent strikes and labour unrest results in
delays and congestion.
Natural draft of up to 23 metres and can
The rail and road network has to be developed.
accommodate ships with displacements of up
The port is 8-10 NE km away from N.H.47
to 300,000 tons, with little or no dredging.
connecting Salem to Kanyakumari and the

southern railway BG line (TiruvananthpuramNagercoil).
Vizhinjam
Closer to the main international shipping lanes
Connectivity development may cause some re-
than any other current port in India.
locations issues.
Requires very little maintenance dredging,
Too far from main cargo hinterland of north
due to its sheltered location. No mangrove,
west India, can initially cater to only peninsular
sand dunes and fishing zones within the
Indias cargo.
region.
Greenfield development will be quite expensive,
affecting economic viability of the project.
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Port Infrastructure
Contd
Lower East Coast
Chennai (Madras)
Ennore
Strengths
Weaknesses
Traditional gateway port in the region.
Still need to improve overall productivity.
DPW as terminal operator.
Not very cordial relationship between port labour

and terminal operator.
Large local hinterland, well-served by CFS

facilities. Good road and rail links with
hinterland.
Draft not adequate to handle main line vessels.
Existing industries like Auto, textile, IT &

Electronics in expansion mode thus
promising increasing container volumes.
Congestion in Chennai city resulting in major delays

in evacuation of containers. Chennai has restriction
on Truck movement during day time.
Second container terminal by PSA to

provide additional handling capacity.
Plans to develop a new mega container
terminal.
Delay in implementation of elevated corridor project.
Adequate land and waterfront available for

future expansion.
Will have to compete with Chennai for container

traffic.
Proximity to Chennai provides access to

strong hinterland and other supporting
infrastructure like CFS, CHAs,
warehouses etc.
Rail and road network needs to be augmented for

handling containers.
Away from the city congestion, good

alternate to Chennai port.
Delay in project implementation.
15m draft for handling modern container

vessels.
Tuticorin
Good geographical location, offering

minimum deviation from main East-west
shipping route.
Draft inadequate to handle mainline vessels.
Experience and expertise of PSA Corp.

Sethu Samundram canal expected to
boost coastal traffic.
Weak immediate hinterland, thus largely dependent

on common secondary hinterland.
Expected increase in competition from Cochin.
Puducherry
Planning to develop a second container

terminal to provide additional capacity.
Will have to make huge investments in dredging to

increase the existing draft at the port.
Proposed draft of 14.5 can facilitate

handling of post-panamax container
vessels,, giving completive edge over
Tuticorin.
Small immediate hinterland, generating limited

container traffic.
Proximity to Southern Tamil Nadu

hinterland.
Intense competition from Chennai and proposed

Ennore container terminal.
Away from the city congestion can provide

an alternate to Chennai port.
Large common secondary hinterland shared by

multiple ports.
Lack of supporting infrastructure like CFSs, CHAs,
and logistics players could result in lower market
share.
Needs to develop last mile rail and road connectivity
to effectively evacuate container traffic.
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Port Infrastructure
Contd
Lower East Coast
Strengths
Weaknesses
Proposed draft of 14.5 can facilitate handling
Limited container traffic generated in the
of post-panamax container vessels,, giving
immediate hinterland.
completive edge over Tuticorin.

Proximity to Southern Tamil Nadu hinterland.
Intense competition from Chennai and

proposed Ennore container terminal.
Karaikal
Large common secondary hinterland shared by
multiple ports.
Lack of supporting infrastructure like CFSs,
CHAs, and logistics players could result in lower
market share.
5.10

Ports compete with each other on various parameters in their endeavour to attract greater
volumes. With increasing privatisation and emergence of global terminal operators,
competition is visible both at the global and regional level. In the current trading
environment, most of the worlds leading liner companies are taking steps to improve their
margins, both by raising freight rates and slashing their operating expenses. However,
given the historic nature of the business and the changing supply-demand scenario, costreduction has been the key agenda for most of the companies involved.
Hence, port user charges, especially those relating to the vessel, are important in this
context and a port/terminal with a lower tariff structure is, therefore, in with a good chance
of securing new business.
However, price alone will not force the issue. Any reputed large carrier for instance, will
want to be certain that the infrastructure, cargo-handling equipment and terminal
management methods are all in place not only to ensure a smooth transfer of the business
but consistently reliable and efficient service thereafter. Without this, a carriers operating
expenses would rise and customer service could be destroyed with the result that shippers
switch to using other carriers, thereby threatening cash flow and revenues.
Taking these issues fully into account, a port user would probably apply the following set of
criteria in choosing its port/terminal:
Port infrastructure
Container handling capacity.
Number of quay cranes.
Depth in the channel and alongside berths.
Effective rail and road infrastructure for efficient evacuation of containers.
Adequate storage area and CFS facilities.
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Port Infrastructure
Port efficiency
Pre berthing delays.
Average turnaround time of the ships.
Relationship of port operator with users
Influence of port operators on the shipping lines and their ability to attract cargo.
Stake of shipping lines/logistics companies in port operating company.
Relationship with logistics companies and freight forwarders.
Deviation from main trade routes
Deviation from the international trade routes.
Impact of deviation on the total shipping costs.
Tariff levels
Traffic levels at competing ports.
Flexibility to change vessel and cargo related charges.
Volume discounts and other incentives.
Hinterland connectivity cost
Proximity to cargo centres.
Cost in terms of money and time to transport cargo/containers between various cargo
centres in the hinterland and gateway ports.
Frequency of rail service and availability of trailers for road movement.
Level of rail and road congestion.
5.10.1 Rail and road connectivity analysis

The competitive positioning of a port is greatly dependent upon good rail and road
connectivity from the port to cargo centres at key hinterland locations. A good level of
hinterland connectivity helps to reduce the inland transportation cost and transit time,
which thereby results in an overall reduction of logistics costs, making the ports position
more favourable. Ports in the Southern India share a limited common hinterland among
themselves. Hence, in what is going to be a competitive environment, the port(s) that
integrate a greater rail and road network would leverage their competitive positioning to
achieve an accelerated growth of container traffic.
99
Port Infrastructure
The section focuses on the current road and rail connectivity of existing ports in Southern
India and ongoing/proposed projects to improve both rail and road connectivity to these
ports. The rail and road connectivity projects are being undertaken under the port
connectivity programmes. The tables below provide overview of current status of port
connectivity projects in India and new projects being undertaken/proposed to improve
connectivity to these ports.
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Port Infrastructure
5.10.2 Existing Connectivity at Indian ports

Port
Road
Rail
Chennai
a. Chennai is connected to NH-5, NH-4 and NH-45.
Port is linked to Southern Railway network via Chennai Beach

Railway which connects ChPT Station to Southern parts of Tamil
Nadu and via Royapuram which connects Southern Railway Trunk
line to Kolkata, New Delhi, Bangalore, Coimbatore etc.
Ennore
a. Ennore port is connected to three national highways NH-4, 5 & 45 which
a. Ennore Port is connected by rail via two stations within Chennai
connect it to rest of India.
namely, Attipattu and Attipattu Pudunagar.
b. Ennore is currently connected to these national highways through Port

Access Road; the NCTPS approach road, TPP road, the Inner Ring Road and
the Chennai bypass.
Tuticorin
a. 2-lane NH-45 B Tuticorin to Ettaiapuram- Aruppukottai-Madurai
Port is connected by broad gauge (BG) rail link with major cities
b. 2-lane NH-7 Tirunelvei to Madurai-Erode, Salem and Bangalore
like Tirunelveli in the west, Nagercoil and Trivandrum in the south
c. 2-lane NH7A, Tuticorin to Tirunelveli.
and Madurai, Trichi, Chennai and Bangalore in the north. Port is

also linked to ICDs at Madurai, Tirupur, Karur, Salem, Coimbatore,
Chennai and Bangalore.
Cochin
New Mangalore Port
The present road connectivity of the Port is through two bridges one each
Port is served by a single line 8 km long section of broad gauge,
on Mattanchery channel and Ernakulum Channel linking the Port to mainland.
which branches off at Ernakulum from the main line from Shornur-
There is also a link road between the Wellingdon Island and NH-47 bypass.
Trivandrum.
The present road connectivity of the Port is through NH-48 (Bangalore-
New Mangalore Port Trust (NMPT) is served by a Broad Guage
Mangalore),
line which is connected with Southern part of the country through
Mangalore).
NH-17
(Cochin-Goa-Mangalore)
and
NH-13
(Sholapur-
Mangalore, Kerala State and Chennai. The Konkan Railway linking

Mangalore with Mumbai is in operation and it is connected to
northern part of the country.
101
Port Infrastructure
5.10.3 Future connectivity projects at Indian ports

Port
Road
Chennai
a. Expansion of Chennai-Ennore port connecting road
Rail
b. Chennai Port-Maduravoyal elevated corridor which is supposed to provide

direct connectivity for container trailers from outside the city to the Chennai
port without entering the city roads. This would be a dedicated elevated
expressway from southern gate of the port to Maduravoyal leading to the
National Highway 4.
Ennore
a. TPP road and the NCTPS road are being widened and strengthened as a a. Ennore port is developing the rail connectivity in phases. In
four lane road
Phase-I, connectivity is to be provided for the coal and iron ore
b. a separate road link of 21Km length is being developed which would be the stack yards and Phase-II, connectivity to the container terminal
access to the road from its northern side. The road is called Northern port b. Ennore Port has planned to spend around Rs 2.2 Billion, as
access road which would connect NH5 and would be a four lane road.
its share in cost, towards developing a new 88-km broad gauge

railway line between Atthipattu in Thiruvallur district of Tamil
Nadu to Puthur in Chittor district of Andhra Pradesh.
Tuticorin
a.NH-7A (Tuticorin - Tirunelveli section)

b. 4-laning of NH 45B
Cochin
New Mangalore Port
a. NHAI is implementing a project for four laning of 10.40 km stretch of NH-47 Rail connectivity between Idappalli and ICTT, Vallarpadam
from km 348/382 to km 358/750
linking of track between Idappalli and Vallapadam (excluding
b. 4-Lane NH connectivity to Vallarapadam.
Idappalli yard and including yard arrangements at Vallapadam).
NH-17 (Suratkal-Nantur Section), NH-48 (Padil Bantwal Section)

km 348/382 - km 358 750 Including 5 Major Bridges
102
Port Infrastructure
Table 5.5
Road distance between cargo centers and ports
(Km)
Road Distance (Kms)
City
State
Chennai
/Ennore
Tuticorin
Cochin
Distance Adv/Disadv Road Distance (Kms)
Vizhinjam
Mangalore
Chennai
/Ennore
Tuticorin
Cochin
Vizhinjam
Mangalore
Wayanaad
Kerala
616
557
271
478
271
(138)
(79)
207
207
Kannur
Kerala
642
720
299
506
299
(136)
(214)
207
207
Trichur
Kerala
632
477
86
289
86
(343)
(188)
203
203
Alleppey
Kerala
726
285
51
162
51
(564)
(123)
111
111
Kollam
Kerala
738
201
135
80
135
(658)
(121)
(55)
(55)
Trivandrum
Kerala
798
209
204
14
204
(784)
(195)
(190)
(190)
Kottayam
Kerala
666
252
62
185
62
(481)
(67)
123
123
Pallakad
Kerala
569
386
141
349
141
(220)
(37)
208
208
Calicut
Kerala
684
545
206
411
206
(273)
(134)
205
205
Mangalore
Karnataka
678
764
447
660
(18)
(104)
213
660
Bangalore
Karnataka
331
581
533
733
347
402
152
200
386
Cochin
Kerala
684
304
215
447
(469)
(89)
215
(232)
Pondicherry
UT
165
459
591
663
643
498
204
72
20
Chennai
Tamil N
579
684
783
678
783
204
99
105
Coimbatore
Tamil N
491
352
193
414
449
(77)
62
221
(35)
Tuticorin
Tamil N
579
304
194
764
(385)
194
(110)
(570)
Karur
Tamil N
400
270
290
433
520
33
163
143
(87)
Madurai
Tamil N
444
135
270
295
629
(149)
160
25
(334)
Salem
Tamil N
326
378
358
526
500
200
148
168
26
Note: Figures in red show disadvantage for Vizhinjam port

103
Port Infrastructure
Table 5.6
Road haulage cost advantage/disadvantage for Vizhinjam port
(Rs.)
Road Distance (Kms)
City
State
Chennai
/Ennore
Tuticorin
Distance Adv/Disadv Road Distance (Kms)
Cochin
Vizhinjam
Mangalore
Chennai
/Ennore
Tuticorin
Cochin
Vizhinjam
Mangalore
4,830
2,765
(7,245)
(7,245)
Wayanaad
Kerala
21,560
19,495
9,485
16,730
9,485
Kannur
Kerala
22,470
25,200
10,465
17,710
10,465
4,760
7,490
(7,245)
(7,245)
Trichur
Kerala
22,120
16,695
3,010
10,115
3,010
12,005
6,580
(7,105)
(7,105)
Alleppey
Kerala
25,410
9,975
1,785
5,670
1,785
19,740
4,305
(3,885)
(3,885)
Kollam
Kerala
25,830
7,035
4,725
2,800
4,725
23,030
4,235
1,925
1,925
Trivandrum
Kerala
27,930
7,315
7,140
490
7,140
27,440
6,825
6,650
6,650
Kottayam
Kerala
23,310
8,820
2,170
6,475
2,170
16,835
2,345
(4,305)
(4,305)
Pallakad
Kerala
19,915
13,510
4,935
12,215
4,935
7,700
1,295
(7,280)
(7,280)
Calicut
Kerala
23,940
19,075
7,210
14,385
7,210
9,555
4,690
(7,175)
(7,175)
Mangalore
Karnataka
23,730
26,740
15,645
23,100
630
3,640
(7,455)
(23,100)
Bangalore
Karnataka
11,585
20,335
18,655
25,655
12,145
(14,070)
(5,320)
(7,000)
(13,510)
Cochin
Kerala
23,940
10,640
7,525
15,645
16,415
3,115
(7,525)
8,120
Pondicherry
UT
5,775
16,065
20,685
23,205
22,505
(17,430)
(7,140)
(2,520)
(700)
Chennai
Tamil N
20,265
23,940
27,405
23,730
(27,405)
(7,140)
(3,465)
(3,675)
Coimbatore
Tamil N
17,185
12,320
6,755
14,490
15,715
2,695
(2,170)
(7,735)
1,225
Tuticorin
Tamil N
20,265
10,640
6,790
26,740
13,475
(6,790)
3,850
19,950
Karur
Tamil N
14,000
9,450
10,150
15,155
18,200
(1,155)
(5,705)
(5,005)
3,045
Madurai
Tamil N
15,540
4,725
9,450
10,325
22,015
5,215
(5,600)
(875)
11,690
Salem
Tamil N
11,410
13,230
12,530
18,410
17,500
(7,000)
(5,180)
(5,880)
(910)
104
Port Infrastructure
5.10.4 Port efficiency

The performance of a port is a definitive indicator of the container business handling
capacity at the facility and is one of the major factors of port attractiveness for liner
companies. Table 5.7 provides an overview of the operating performance of some of the
competing ports in the South Indian region for year 2008-09. Chennai, Tuticorin, Cochin
and New Mangalore ports are currently operational on the southern coast of India.
It can be seen that vessel turn-around time is high at Chennai and New Mangalore ports
as compared to Tuticorin and Cochin. Chennai is the poorest performer in terms of both
vessel turn around and average pre berthing time in the region. This is in spite of the fact
that it the largest port in the region and caters to the biggest and fastest growing hinterland
in South India. The port also has a high berth occupancy rate however its the Tuticorin
port which seems to be most congested with almost 110% of berth occupancy rate.
Table 5.7
Port performance indicators for competing facilities in South
Indian region
Ports
Average Pre-berthing time (hrs.)
Chennai
Tuticorin
Cochin
Mangalore
21.20
11.04
13.07
4.80
Vessel turn around (days)
2.50
1.23
1.19
1.90
Capacity utilisation (%)
95%
110%
52%
58%
26
27
26
n.a
Crane productivity (moves/hrs)

CY productivity (teu / hectare pa)
63,500
54,875
37,143
2,900
Average parcel size (tonnes)
25,315
12,795
9,281
4,975
1,875
948
687
369
Average parcel size (teu *)

*Note:
1)
Crane productivity data based on market survey
3)
Chennai data contains only the DPW container terminal
Source: Indian Ports Association / Complied by Drewry
5.10.5 Competitive benchmarking of Vizhinjams competing Ports

Vizhinjam port is primarily competing with Chennai, Tuticorin, Cochin and for its
containerised cargo; however the port is also competing with international ports like
Colombo, Dubai and Singapore for international transhipment traffic. Vizhinjam would
primarily erode market share of Cochin port due to the availability of similar hinterland and
positioning itself as an ideal gateway port compared to Cochin for the southern Kerala
cargo which contributes around 40% of the Kerala traffic. Table 5.8 provides a comparative
analysis of Vizhinjam based on seven parameters of port & terminal performance
measure. The comparison is qualitative and is primarily based on interview from various
stakeholders in the container business. The ports have been rated from 1 to 5 on the basis
of various parameters with 1 as a poor rating increasing to 5 as an excellent rating. Each
parameter has been assigned a weightage which represents the importance of that factor
in terms of port attractiveness for shipping lines and shippers.
The various aspects of container handling infrastructure which have been considered as
follows:-
105
Port Infrastructure
Container Handling Infrastructure

Available quay length, yard area and number quay cranes available with the terminal.
Rail/Road Connectivity
It takes into consideration the dedicated rail sidings available for container transportation
to/from the terminal and the frequency of rail services to various hinterlands. Road
connectivity factor shows the strength of the port in terms of dedicated road with
commensurate length and width for container evacuation.
Draft
The all time available draft at the seaport.
Mainline Vessel Services
The number and frequency of mainline vessel calls at the terminal.
Turnaround time for vessels
Turnaround time is the average time taken for a vessel to complete its operation at the port
and move forward to next destination on its voyage.
Location
Proximity of the port to its hinterland
Parcel Size
The total numbers of containers that a vessel loads and unloads during a port call.
Table 5.8
Vizhinjams ports competitive analysis
Weightage
Factors
Chennai Cochin Tuticorin
15%
Container Handling
20%
Rail/Road Connectivity
12%
Draft
12%
Mainline Services
2.0
15%
Turnaround time for
3.0
3.0
Mangalore
Colombo
Dubai
Singapore
2.0
2.0
2.0
3.0
2.0
3.0
2.0
2.0
1.0
1.0
4.0
4.0
Infrastructure
vessels
20%
Location
4.0
2.0
3.0
6%
Average Parcel Size
3.0
3.0
3.0
100%
Average Score
2.9
2.4
2.4
1.5
4.2
4.8
Note: 1 = Poor, 3 = Average, 5 = Excellent

106
Port Infrastructure
5.10.6 Relationship of port operators with shipping lines and logistic

companies
The ownership pattern of a port can play a key role in attracting shipping lines to a new
port. Major shipping lines like Maersk, MSC and APL control a significant market share
and a decision by them to shift from one port to another could result in a major change in
market shares of competing ports in the region. Major shipping lines are also looking for
strategic partnership with ports to have better control over port operations and to provide
more reliable and cost effective service. This trend is clearly evident in international and
Indian scenario:
Shifting of Maersk from Dubai to APMTs container terminal at Salalah.
Shifting of Maersk from Singapore to Tanjung Pelepas in Malaysia.
A P Moller Maersk group starting its own container terminal at Nhava Sheva.
In the Indian scenario, APMT, owns and operates the port of Pipavav as well as JNPs
third container terminal GTI along with Concor. GTI enjoys an advantage over competing
facilities due to its relationship with Maersk, the largest shipping line in the world and for
Indian container traffic. GTI benefits from the inland infrastructure that its strategic partner
Concor owns. Additionally, it directly benefits from Maersks high market share in India.
However, such a relationship sometimes acts as a barrier for attracting other major
shipping lines at APMTs facility, as most shipping lines consider APMT and Maersk as
one entity and fear that APMT may be biased towards Maersk. Even in non APMT
terminals Maersk has a tendency to negotiate with terminal operators for berthing priority
over all other lines, guaranteed access to a minimum number of cranes and automatic
adjustment of handling rates to the lowest negotiated by any other shipping line.
In such a scenario, port operators like DP World, PSA and others could leverage their
independent status to attract all shipping lines, as they provide the required confidence
regarding equal consideration of trade interest to each of the users.
On the North Western coast of India APMT owns/operates two container terminals and is
predominantly supported by Maersk Line in terms of its container throughput. The port of
Pipavav till mid 2008 was only supported by Maersk Line volumes and was not able to
attract other shipping lines. Kandla port also enjoys good support from Maersk Line which
is the largest operator at that port. The shipping line is understood to enjoy favourable tariff
at the Kandla port. Mundra on the other hand, has been predominantly supported by MSC
which has been the largest contributor of container volumes at the port. As per unofficial
reports, MSC is expected to shift its calls from the MICT terminal at Mundra to the Adani
terminal which is the second container terminal at the port on account of favourable tariff
terms offered by the port operator.
107
Transhipment Traffic Analysis Indian Subcontinent
6. Transhipment traffic analysis

Indian Subcontinent
Objective
To identify
Mainline & feeder volumes generated by ports in the ISC
Total available transhipment market of the ISC
Share of ISC ports in the transhipment traffic
Share of hubs outside the ISC in handling regions transhipment traffic
Hub port economics
Key Findings
The ISC gateway container volumes have increased from 4.3 Mn Teu in 1997 to
14.7Mn Teus in 2008. The west coast of India contributes the largest share (50%) of
container traffic in the region. Almost 2.5% of the total gateway traffic is regional ISC
traffic, 66% of the gateway traffic is served through feeder services and rest 31.5% is
carried on mainline vessels in the region. Colombo is the largest transhipment hub for
ISC traffic in the region and handles around 35% of the total ISC transhipment traffic,
4.1% of the transhipment volume is handled by ports within the ISC while almost 61%
of the rest transhipment traffic of the region is handled by hub ports outside ISC,
namely Singapore, Salalah, Jebel Ali, etc.
Although, the West coast of India and Pakistan combined provide the largest
container traffic market in the region, the share of feeder services in these regions
has steadily decreased over the years. Currently, an estimated 12-15% of the total
traffic of this region is a potential transhipment target market. On the other hand, the
share of container traffic from Bangladesh has a potential transhipment market as
high as 95%, 70% in the case of east coast of India and 60% for the south coast of
India.
Conclusion
Vizhinjam port faces competition for a transhipment market not only from the port of
Colombo but also from major transhipment hubs outside the ISC region. However, the
east coast of India, Bangladesh and south coast of India may be a target market of
transhipment traffic for Vizhinjam.
108
Transhipment takes various forms. The traditional and most easily identifiable occur where
export cargo is taken by feeder vessel or cargo ferry from one country to another, usually
in the same continent, for onward shipment on another vessel to a third port usually in
another continent. Import cargo follows the reverse process. This type of transhipment can
be controlled by either the shipping line or by the shipper.
Line transhipment arises from co-ordinated schedules of mainline and feeder vessels
controlled by the line. Shipper transhipment is more opportunistic, exploiting the services
of different lines or modes to reduce transit times or costs. A different form of
transhipment, relay - is wholly controlled by the individual shipping line, consortia or
alliance concerned. This involves cargo carried on one main line vessel relayed to another
main line vessel at a hub port. An example would be cargo from East Africa to North
America, being carried on a mainline vessel on the trade leg from East Africa to Europe,
and then transhipped to another mainline vessel on the trans-Atlantic trade leg. Coordination of sailing schedules and concentration of calls at one port are needed to make
this operation efficient and attractive to shippers. While all transhipment is more sensitive
to port costs and efficiency of handling than direct cargo, relay traffic is particularly
sensitive, as the range of ports which can act as a hub can extend over a wide area.
Transhipment is referred to as Hub-Spoke Network in shipping parlance. As the name
suggests, a marine hub-and-spoke network consists of a central hub port, and a series of
spokes serving regional feeder ports. Accordingly, commodities are transported via
hubs, to feeder ports, and onwards to their final destinations, or vice versa.
Hub
Without a hub, or series of hubs, there is no hub-and-spoke network. A hub port is one
where commodities, arriving on large vessels (typically 4000+teu (Twenty-food Equivalent
Unit) container vessels), are transhipped for onward shipping via smaller vessels to
various destination ports. Sometimes, also, cargo is transhipped or relayed to other
mainline services using similar-sized vessels, at a hub. International examples of hub ports
include Colombo, Singapore, Algeciras, and Freeport where in each case, there is
significant such transhipment activity.
Hub vs. Gateway Ports
A distinction should be made between hub and gateway ports. A hub often has a relatively
small local cargo base, is located close to main shipping routes and features feeder
service(s) to other ports. Gateway ports, on the other hand, tend to have a local or captive
market and also focus on intermodal connections and gate activity. A port can be both a
hub and gateway port, though in these cases, gateway activities are generally considered
of most importance to ports given the higher volume of gateway vs. hub traffic handled.
Nevertheless, the point remains that gateway and hub ports are not mutually exclusive.
Feedering
Feedering involves the movement of commodities (typically containers) from a hub port to
a regional feeder port via marine transport, or vice versa.
There are two types of feeder service:
Common user services are provided by independent, third-party carriers that serve a
number of clients. Some also carry regional cargo as well, usually starting by making
use of empty containers being repositioned. Some regional carriers also carry feeder
cargo.
109
Dedicated feeder services are operated by the mainline carriers themselves (e.g.
Maersk, Orient Overseas Container Line (OOCL), Mediterranean Shipping Company
(MSC), and CMA/CGM). These types of service can serve as an alternative to a direct
call by a large vessel or result from volumes on a common user service growing to the
point of justifying a dedicated feeder service.
There can also be joint services between common user and dedicated feeder operators.
One benefit of both types of feeder service is that they create access to new markets not
necessarily serviced by direct calls.
The sizes of feeder ships vary, but they typically carry less than 1,500 teu. Average sizes
can range from 510 teu in the Middle East to 920 teu in the Indian sub-Continent.
Dedicated feeders range from 980 teu in the Middle East to 1,470 teu in Africa. In North
Europe, the average is 620 teu for common carriers and 1,060 teu for dedicated vessels.
Typical speeds for a feeder-type vessel are 15.5 knots. It is important to note that the time
savings with faster vessels often does not justify the additional fuel costs resulting from
faster speeds.
Most feeder operators charter rather than own vessels. This allows for maximum flexibility
and effective capacity utilization since vessels can easily be downsized or upsized
according to market conditions. Where cabotage is not an issue, this is easily done
because vessels are traded on an open market and are readily available.
Pure Transhipment Hubs
Pure hubs are ports with a transhipment incidence of over 80 percent. In the
Mediterranean, pure transhipment hubs are with little or no gateway business. The best
example may be the Medcenter Container Terminal in Gioia Tauro, located on the tip of
mainland Italy. It has a transhipment incidence of over 95 percent.
As with gateways, hubs can only develop where shipping lines call. Without the critical
mass of volume resulting from shipping line calls, there is no opportunity to develop a hub.
As such, potential hubs must first be assessed from the perspective of shipping lines.
Secondly, a good hub candidate must also be well placed to lend itself to feeder services
(without spokes, a hub is irrelevant). Accordingly, a good hub port candidate must provide
a combination of the following attributes (in no particular order):
Location on main east-west or north-south shipping routes
Minimal deviation from main shipping routes
Distance savers compared with direct services
A location within easy access of feeder ports
Situated on the coast with easy approach from open sea and deep fairways
Ample berthing facilities capable of handling post-Panamax vessels
High productivity and low handling costs
Ability to serve large number of markets
24/7 operations
Absence of cabotage restrictions, which could otherwise limit viability of feeder

services
110
Driven by the business interests of shipping lines, hubs are more likely to develop and
succeed where the above conditions are in place. Attempts to develop hubs where these
conditions are absent (in whole or in part) are likely to prove problematic and
unsustainable.
The success of a hub is inextricably linked with the success of feeder services emanating
from the same hub. The success of a hub is contingent on a critical mass of feeder cargo
that can be cost-effectively transhipped at hub ports and transported via feeders to other
regional markets not served directly by major shipping lines. Without critical mass, there is
no hub, without a hub; there is no hub-and-spoke network. Critical mass for hub-and-spoke
transport, in turn, is driven by shipping lines.
In the above section, some of the factors attracting shipping lines to hub ports have been
discussed. One of the important factors is proximity of the hub to major shipping lanes,
requiring little deviation, thereby leading to time savings and lower costs for shipping lines.
Equally important is the commercial viability of feeder services linking the hub to other
regional markets. Key enabling conditions for commercial viability are a critical mass of
feeder traffic from/to a hub with consistency and reliability of volumes, the competitive
advantage of the sea route relative to alternative rail and road routes, and flexibility to
right-size ships to respond to the market.
6.1
Historic development of Indian subcontinent container traffic

Figure 6.1 provides a map of the significant ports both within the ISC region and those
located outside the region, but involved in serving it. The two main types of port are:
Transhipment hubs (which serve the ISC region).
Gateway ports (which handle import-export traffic). These can be further sub-divided
into direct call ports and feeder (spoke) ports.
For completeness, Figure 6.1 also shows new and proposed hubs as well as gateway
ports in the region.
Table 6.1 shows the development of container port volumes in the ISC region over the last
11 years. Total volumes in the region have grown by 11.3% per annum on average,
reaching almost 11.7 million teu in 2008, up from 4.4 million teu in 1997. Within this figure,
Pakistan, India and Bangladesh have outperformed the regions average growth rate,
whilst Sri Lanka has lagged some way behind, growing at only 7.4% p.a. CAGR. There are
several reasons for this:
(a)
The Sri Lankan economy has not grown as fast as other economies in the region, so
import-export (local) traffic through Colombo has not grown as fast as in other ISC
countries.
(b)
Anecdotal evidence suggests that there has been a tendency for Sri Lankan export
cargo to increase in value more so than in volume.
(c)
Transhipment traffic at Colombo did not grow in the period 1997-2002, largely due to
capacity constraints and service level issues, as well as competition from other hub
ports and from direct calls ports within the ISC region such as Karachi and JNPT. It
111
should be noted though that the capacity and service level issues at Colombo have
changed significantly in the last few years, and that growth has now returned to
Colombo transhipment volumes.
Table 6.2 breaks down the figures into individual port volumes. The fastest growing ports
in the region have been Port Qasim in Pakistan and JNPT in India. JNPT in particular has
rapidly emerged to become the largest container port in the region, accounting for 28% of
the ISC regions throughput in 2008.
112
Figure 6.1
Gateway and hub container ports serving the ISC region
Pakistan
Fujairah
Khor Fakkan
Gwadar
Dubai
Karachi
Port Qasim
U.A.E.
Haldia
Kolkata
Kulpi
India
Kandla
Bangladesh
{{
Hazira
Dhamra
Mundra
Oman
Yemen
Gopalpur
Paradip
Visakhapatnam
JNPT
Mumbai
Chittagong
Pipavav
Dighi
Rewas
Sohar
{
Gangavaram
Kakinada
Salalah
Krishnapatnam
Mormugao
Aden
Ennore
New Mangalore
Cochin
Colachel
Vizhinjam
Chennai
{
{ Sri Lanka
Colombo
Tuticorin
Transhipment hub
{ Gateway port
New or potential port
Malaysia
Port Klang
Singapore
Tanjung Pelepas
Singapore
Source: Drewry
113
Table 6.1
Development of ISC container port volumes by country, 1997-2008 (teu)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
CAGR
608,065
666,568
696,649
774,943
850,000
942,892
1,071,169
1,342,535
1,568,613
1,760,430
1,908,000
1,987,000
11.4%
India
1,769,746
1,919,847
2,278,466
2,517,341
2,809,600
3,364,607
3,642,955
4,353,046
4,959,504
5,728,888
7,306,707
7,978,555
14.7%
Sri Lanka
1,687,184
1,714,077
1,704,387
1,732,855
1,726,616
1,764,717
1,959,354
2,220,573
2,455,329
3,079,132
3,381,693
3,687,338
7.4%
300,476
345,327
392,137
456,007
486,289
526,353
624,087
684,000
783,353
882,411
958,020
1,069,999
12.2%
4,365,471
4,645,819
5,071,639
5,481,146
5,872,505
6,598,569
7,297,565
8,600,154
9,766,799
11,450,861
13,554,420
14,722,892
11.7%
Pakistan
Bangladesh
Total
Note: Includes some estimates

Source: Drewry
114
Table 6.2
Development of ISC container port volumes by port, 1997-2008 (teu)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
CAGR
1997-2008
Pakistan
Karachi
555,347
505,413
527,473
615,024
650,000
715,892
738,610
848,000
1,024,482
1,126,930
1,250,000
1,300,000
8.0%
52,718
161,155
169,176
159,919
200,000
227,000
332,559
494,535
544,131
633,500
658,000
687,000
26.3%
601,289
509,310
507,269
427,591
254,309
213,142
230,193
217,455
218,724
156,122
138,201
111,176
-14.2%
95,937
118,055
160,242
183,517
186,820
214,655
259,076
288,000
313,000
336,000
387,539
453,000
15.2%
100,000
128,912
130,057
133,178
151,800
163,242
165,687
185,000
193,000
217,000
245,000
270,000
9.4%
New Mangalore
3,929
6,043
6,526
6,927
9,000
16,000
19,000
27,500
n/a
Pipavav
1,000
15,089
17,891
19,322
66,962
84,353
120,000
192,017
194,937
n/a
3,096,000
3,888,706
4,184,770
21.2%
Port Qasim
India
Mumbai
Kolkata/Haldia
Cochin
JNPT
504,149
669,108
889,978
1,124,723
1,462,061
1,946,000
2,001,023
2,300,000
2,580,000
Kakinada
35,000
40,000
45,000
50,000
50,000
Kandla
75,000
65,000
75,000
75,000
117,250
140,000
166,750
170,035
181,000
164,000
172,000
155,000
6.8%
Chennai
15.1%
n/a
256,485
274,950
321,960
352,307
344,532
424,665
493,000
600,000
735,000
765,000
1,060,239
1,201,247
Mundra
20,000
177,896
289,117
450,000
680,221
840,658
n/a
Paradip
1,771
3,000
3,150
5,000
2,000
n/a
Tuticorin
88,769
99,512
128,533
149,793
202,293
213,509
253,880
300,000
307,310
Visakhapatnam
13,117
15,000
20,427
20,232
21,517
25,460
27,497
39,000
46,000
353,616
1,687,184
1,714,077
1,704,387
1,732,855
1,726,616
1,764,717
1,959,354
2,220,573
2,455,329
300,476
345,327
392,137
456,007
486,289
526,353
624,087
684,000
4,365,471
4,645,819
5,071,639
5,481,146
5,872,505
6,598,569
7,297,565
8,600,154
450,398
456,217
3,079,132
3,381,693
3,687,338
7.4%
783,353
882,411
958,020
1,069,999
12.2%
9,766,799
11,450,861
13,554,420
14,722,892
11.7%
16.0%
Sri Lanka
Colombo
Bangladesh
Chittagong
Total

Source: Drewry
115
6.2
Gateway volumes
The throughput figures in the preceding tables include transhipment activity, primarily at
Colombo, but also at JNPT, where some limited transhipment also takes place. Table 6.3
shows the development of volumes in the region excluding transhipment volumes, i.e. the
figures show the net gateway (import-export) traffic volumes.
As can be seen, average growth in import-export traffic in the region has been 12.9% p.a.
in the last 11years. The west coast of India has shown the strongest growth, nearing 15%
p.a., whilst Sri Lanka has seen a more modest 6.7% p.a. growth rate.
Total gateway traffic reached 11.6 million teu in 2008, up from 3.1 million teu in 1997.
Excluding Sri Lankan local traffic, which is captive to Colombo, the total market potential
for Colombo to compete is currently around 8.1 million teu. A significant proportion of this
volume though is shipped direct to and from ports such as JNPT, and therefore not
available for Colombo to tranship.
Table 6.4 shows the development of market share for each of the main sub-regions of the
ISC (excluding Sri Lanka). The aim of this table is to show the relative importance of the
sub-regions which make up Sri Lankas target transhipment markets. On this basis, the
west coast of India now accounts for almost half of the regions gateway traffic, with the
south and east coasts accounting for another 22%. It is significant to note that the south
and east coasts of India, along with Bangladesh represent the main target markets for
Colombo. Collectively these regions accounted for almost one third of the ISC gateway
traffic in 2008, equivalent to 3.7 million teu.
For Colombo, a critical factor is the proportion of ISC gateway traffic which is shipped on
direct services vs. the proportion which is fed and transhipped. Table 6.5 summarises the
estimated split by these categories, for each main ISC sub-region. Besides deep sea
traffic (which in this analysis is defined as any cargo originating in or destined for any
country outside of the ISC region), there is also an element of intra-ISC traffic, i.e. trade
between ISC countries. This would for example include goods manufactured in Sri Lanka
and exported to Bangladesh. Additionally these volumes are estimated to account for a
very small proportion of total activity, no more than 2.5% of port volumes in each region.
For deep sea traffic, ports in Pakistan and the west coast of India have a high proportion of
traffic moving via direct call services. On the west coast of India, analysis of direct services
calling at JNPT, Mundra and Pipavav suggest that in total, 85% of volume now moves on
direct services. This is a considerable difference from 10 years ago. For Pakistan the
position is similar, although not quite as pronounced. These changes have meant that
volumes carried on direct services have grown at a much faster rate than those on feeder
services.
Elsewhere in India, the situation is somewhat different. On the south and east coasts, the
smaller volumes involved, and the less developed nature of the ports mean that feedering
remains the dominant means of serving these areas. Nevertheless, both have seen an
increasing proportion of direct services, with changes of this nature particularly evident at
Tuticorin and Chennai.
Bangladesh meanwhile has seen little change over the last 11 years, with virtually all cargo
being fed, largely due to inadequate port facilities and shallow water.
Sri Lanka of course sees all of its local cargo moving on deep sea direct services.
116
Table 6.3
Development of net ISC gateway (import-export) volumes, 1997-2008
(teu)
1997
Pakistan
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
CAGR
605,337
663,664
693,479
771,517
846,330
938,768
1,066,608
1,336,085
1,558,846
1,746,117
1,891,057
1,968,596
11.3%
1,127,295
1,173,604
1,380,079
1,512,416
1,682,876
2,133,433
2,234,825
2,774,948
3,176,657
3,772,845
4,746,609
5,270,156
15.1%
South coast India
186,041
225,520
255,420
279,545
350,423
372,627
415,006
478,550
490,543
556,302
678,455
707,813
12.9%
East coast India
397,811
445,101
544,459
602,630
599,199
660,656
775,012
922,321
1,087,233
1,141,836
1,504,221
1,719,893
14.2%
Bangladesh
300,476
345,327
392,137
456,007
486,289
526,353
624,087
684,000
783,353
882,411
958,020
1,069,999
12.2%
Sri Lanka
453,852
522,793
511,618
552,075
531,559
545,653
589,533
689,435
739,574
751,308
845,423
921,835
6.7%
3,070,811
3,376,010
3,777,193
4,174,191
4,496,675
5,177,490
5,705,071
6,885,339
7,836,207
8,850,820
10,623,786
11,658,293
12.9%
West coast India
Total

Source: Drewry
Table 6.4
Share of net ISC gateway (import-export) volumes (exc. Sri Lanka), 1997-2008
(teu)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Pakistan
23.1%
23.3%
21.2%
21.3%
21.3%
20.3%
20.9%
21.6%
22.0%
21.6%
19.3%
18.3%
West coast India
43.1%
41.1%
42.3%
41.8%
42.4%
46.1%
43.7%
44.8%
44.8%
46.6%
48.5%
49.1%
South coast India
7.1%
7.9%
7.8%
7.7%
8.8%
8.0%
8.1%
7.7%
6.9%
6.9%
6.9%
6.6%
East coast India
15.2%
15.6%
16.7%
16.6%
15.1%
14.3%
15.2%
14.9%
15.3%
14.1%
15.4%
16.0%
Bangladesh
11.5%
12.1%
12.0%
12.6%
12.3%
11.4%
12.2%
11.0%
11.0%
10.9%
9.8%
10.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

Source: Drewry
117
Table 6.5
Estimated direct call v. feeder split of ISC gateway volumes
1997
2008
CAGR
Pakistan
Deep sea via direct calls %
25.0%
80.0%
Deep sea via feeder calls %
72.5%
17.5%
ISC intra-regional traffic %
2.5%
2.5%
100.0%
100.0%
Deep sea via direct calls (teu)
151,334
1,574,877
23.7%
Deep sea via feeder calls (teu)

ISC intra-regional traffic (teu)
438,869
15,133
344,504
49,215
-2.2%
11.3%
West coast India

30.0%
85.0%
67.5%
12.5%
2.5%
2.5%
100.0%
338,188
100.0%
4,479,633
760,924
658,769
-1.3%
28,182
131,754
15.1%
26.5%
South coast India

16.0%
38.0%

81.5%
2.5%
59.5%
2.5%
100.0%
100.0%
29,766
268,969
151,623
421,149
9.7%
4,651
17,695
12.9%
22.2%
East coast India

16.0%
27.0%
81.5%
70.5%
2.5%
2.5%
100.0%
100.0%
63,650
464,371
19.8%

324,216
9,945
1,212,525
42,997
12.7%
14.2%
Bangladesh
5.0%
5.0%
92.5%
92.5%
2.5%
2.5%
100.0%
15,024
100.0%
53,500
12.2%
277,940
989,749
12.2%
7,512
26,750
12.2%
97.5%
97.5%
2.5%
100.0%
2.5%
100.0%
442,506
898,789
6.7%
11,346
23,046
6.7%
1,040,469
7,740,139
20.0%

1,953,572
76,770
3,626,697
291,457
5.8%
12.9%
Sri Lanka
ISC total
118
Overall this means that of the 11.6 million teu of gateway port traffic in the ISC region in
2008, estimated 7.7 million teu is shipped on direct services and 0.3 million teu is intra-ISC
traffic, leaving almost 3 million teu which is fed to and from hub ports. This translates into
almost 6 million teu of hub port transhipment activity.
6.3
Transhipment volumes
Hub port transhipment activity within the ISC region is dominated by Colombo, as Table
6.6 shows. JNPT has a modest amount of transhipment, but is hampered by factors such
as lack of available capacity, high port costs and Indian cabotage laws. Besides these two
ports, collectively the remaining ports in the region see a nominal amount of transhipment
activity. Overall transhipment volumes at ports within the ISC on an average have grown
by almost 8% p.a. since 1997.
Colombo is not the only hub port serving the ISC region. Competition is faced from a range
of ports from Aden in the west to Singapore in the east. Table 6.7 shows the breakdown of
estimated ISC-related transhipment traffic, which in 2008 equated to just less than 7.2
million teu of hub port activity. Of this figure, Colombo accounted for traffic of 2.7 million
teu, having a market share of 38% of the total transhipment traffic. Other hubs within the
ISC region (mainly JNPT) handled 0.24 million teu of transhipment. The majority of activity,
representing 4.2 million teu in 2008, was spread amongst hub ports outside the ISC
region.
Table 6.8 provides a matrix of the estimated 2008 transhipment volumes at each hub
serving the ISC, broken down into three ISC sub-regions. Colombo, due to its location
within the ISC region, is able to compete for most, if not all ISC feeder traffic. However, the
split of the ports transhipment volume across each region is not even, due to a large
extent because the Pakistan and west coast India trades are largely served by direct calls.
As a result, the east coast India and Bangladesh are much more significant to Colombo,
accounting for an estimated two thirds of total transhipment in 2008. In fact, Colombos
share of the Bangladeshi feeder market is quite small, with most feeder services linking
Chittagong with the South East Asian hubs. As a result, the east coast of India is of critical
importance to Colombo. Due to its proximity, Colombo also plays a key role in
transhipment to/from the south Indian ports of Tuticorin, and to a lesser extent Cochin.
For hubs outside of the ISC region, the general rule is that those located in the Middle East
are best placed to compete for Pakistan and west coast India transhipment, whilst those
located in South East Asia are best placed to compete for east coast India and
Bangladesh transhipment.
Colombos main competitors for Pakistan/west coast India transhipment volumes are
Dubai, Salalah and Khor Fakkan, in addition to JNPT. For east coast India and
Bangladesh transhipment volumes, the most significant competing hubs for Colombo to
contend with are Singapore, Port Klang and Tanjung Pelepas. The main competitors for
south coast India transhipment volumes are Dubai and Singapore.
119
Table 6.6
Development of transhipment volumes at ports within the ISC region, 1997-2008 (teu)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
1,233,332
1,191,284
1,192,769
1,180,780
1,195,057
1,219,064
1,369,821
1,531,138
1,715,755
2,327,824
2,536,270
2,765,504
7.6%
JNPT
50,415
66,911
88,998
112,472
166,092
185,519
204,429
157,877
175,770
214,963
326,593
225,481
14.6%
Other ports
10,914
11,615
12,679
13,703
14,681
16,496
18,244
25,800
39,067
57,254
67,772
73,614
18.9%
1,294,660
1,269,809
1,294,446
1,306,955
1,375,830
1,421,079
1,592,494
1,714,815
1,930,592
2,600,041
2,930,634
3,064,599
8.1%
73.1%
69.5%
70.0%
68.1%
69.2%
69.1%
69.9%
69.0%
69.9%
75.6%
75.0%
75.0%
2007
2008
Colombo
Total
Colombo transshipment
incidence
2007
2008
CAGR

Source: Drewry
Table 6.7
Development of total ISC-related transhipment volumes at hub ports, 1997-2008 (teu)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Total ISC feeder volumes at hubs 3,907,144 4,076,997 4,440,985 4,687,138 4,830,892 5,222,660 5,484,423 6,091,480 6,450,459 6,652,772 7,270,162 7,253,393
CAGR
5.8%
Of which:
Colombo
1,233,332 1,191,284 1,192,769 1,180,780 1,195,057 1,219,064 1,369,821 1,531,138 1,715,755 2,327,824 2,536,270 2,765,504
Other ISC "hubs"

Hubs outside ISC
61,329
78,525
101,677
126,175
180,773
202,015
222,673
183,677
214,837
272,217
394,365
7.6%
299,096
15.5%
2,612,484 2,807,188 3,146,539 3,380,182 3,455,062 3,801,581 3,891,929 4,376,665 4,519,867 4,052,731 4,339,527 4,188,794
4.4%
Market shares
Colombo
31.6%
29.2%
26.9%
25.2%
24.7%
23.3%
25.0%
25.1%
26.6%
35.0%
34.9%
38.1%
35.0%
Other ISC "hubs"
1.6%
1.9%
2.3%
2.7%
3.7%
3.9%
4.1%
3.0%
3.3%
4.1%
5.4%
4.1%
4.1%
Hubs outside ISC
66.9%
68.9%
70.9%
72.1%
71.5%
72.8%
71.0%
71.8%
70.1%
60.9%
59.7%
57.7%
60.9%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0% 100.0%
120
Table 6.8
Matrix of hub port estimated transhipment volume by ISC feeder region, 2008
Aden
Salalah
Khor
Fakkan
21
408
209
1,066
269
564
75
38
198
21
South coast India **
34
752
29
East coast India and Bangladesh
10
22
24
1,449
553
270
1,239
21
419
209
1,123
299
2,766
628
314
1,466
21
100.0%
97.5%
100.0%
100.0%
95.0%
90.0%
20.4%
12.0%
12.0%
13.5%
0.0%
0.0%
0.0%
0.0%
3.0%
2.0%
27.2%
0.0%
2.0%
2.0%
0.0%
2.5%
0.0%
0.0%
2.0%
8.0%
52.4%
88.0%
86.0%
84.5%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.00%
100.0%
100.0%
100.0%
14.3%
7.3%
0.3%
37.3%
9.4%
19.7%
2.6%
1.3%
6.9%
(000 teu)
Pakistan and west coast India
TOTAL
Fujairah
Dubai
JNPT *
Colombo
Tanjung
Pelepas
Port
Klang
Singapore
TOTAL
Estimated split for each hub

Market shares by region

0.7%
0.0%
0.0%
0.0%
0.0%
4.1%
0.7%
90.9%
0.0%
0.8%
3.5%
100.0%
0.0%
0.3%
0.0%
0.0%
0.6%
0.7%
40.6%
15.5%
7.6%
34.7%
100.0%
100.0%
Plus transhipment volumes at other Indian ports
** Cochin and Tuticorin

Source: Drewry
121
6.4
Regional capacities and facilities in the region

Tables 6.9 - 6.11 give detailed information about facilities and capacities available at the
ports currently competing with Colombo. Clearly, the largest port in terms of throughput,
Singapore also gives largest facilities in the region, with longest quay length of 13,800
meters and deepest draft of 16.7 meters (in fact at Jurong container terminal rather than
PSA). Singapore also has 180 gantry cranes installed, at all its terminals collectively, which
is the highest number among the competing ports.
Port Kelang stands second both in terms of quay length (5,313 meters) and capacity (9m
teu) and is currently running at 88.6 percent of utilisation. In terms of the utilisation level
among the transhipment hubs, Khor Fakkan seems to be quite tight, running at 100
percent of capacity in 2008, with container throughput of 2.1m teu.
Among the gateway ports (other than Indian), Karachi is running at over 82 percent
utilisation.
122
Table 6.9
Comparison of key factors of regional hub ports competing with Vizhinjam, 2008
Port
Terminal
Landlord
Terminal
Operator
Operator
Aden (ACT)
Aden Container Terminal
Public
Private
DPW (under
2008
2008 Estimated
Throughput
Capacity
('000 teu)
('000 teu)
Utilisation
(%)
Quay
Length
(m)
No. of
Cranes
Yard
Area
(ha)
Water
Depth
(m)
425
600
70.9
700
35
16
67
150
44.7
375
7.5
11
492
750
65.6
1,075
42.5
negotiation)
Ma'alla Terminal (berths 1-2)
Public
Private
DPW
Aden total
Colombo
South Asia Gateway Terminal
Public
Public
SAGT
1,726
1,800
95.9
940
10
12
12-15
Jaya Container Terminal
Public
Private
SLPADPW
1,880
2,100
89.5
1,646
14
45.5
12-15
United Container Terminal
Public
Public
SLPA
81
400
20.3
590
1.5
9-11
3,687
4,300
85.7
3,176
28
59
11,827
13,750
86.0
5,626
72
190
12.8-17
Colombo total
Dubai
Jebel Ali and Port Rashid
Public
Private
DPW
Khor Fakkan
Khor Fakkan Container Terminal Public
Private
Gulftainer Company
2,102
2,100
100.1
1,060
16
30
15
Salalah
Salalah Port Container Terminal Private
Private
APMT
3,068
4,000
76.7
1,236
20
54
18
Port Kelang
Kelang Multi Terminal (Westport Public
Private
HPH
4,631
5,000
92.6
2,600
36
65
16
Private
Northport Malaysia
3,343
4,000
83.6
2,713
27
92
18
7,974
9,000
88.6
5,313
63
157
Terminal B07-B10)
Northport (prev. Kelang
Container Terminal)
Port Kelang total
Public
Bhd.
123
Table 6.9 (contd)
Port
Singapore
Terminal
Landlord
Terminal
Operator
Operator
2008
2008 Estimated
Throughput
Capacity
('000 teu)
('000 teu)
Utilisation
(%)
Quay
Length
(m)
No. of
Cranes
Yard
Area
(ha)
Water
Depth
(m)
Jurong Port
Private
Private
Jurong Port Pte Ltd
973
1,600
60.8
1,300
18
Brani
Private
Private
PSA
6,060
6,250
97.0
2,630
31
79
15
Keppel
Private
Private
PSA
6,070
8,400
72.3
3,220
36
96
14.6
11,255
12,750
88.3
4,330
67
164
16
5,560
6,000
92.7
2,320
28
84
14.8
29,918
35,000
85.5
13,800
180
430
5,466
8,000
68.3
3,600
40
110
16
36
585
6.2
1,055
24
10.5-12.5
Pasir Panjang
Private
Private
PSA/COSCO/MSC
Tanjong Pagar
Private
Private
PSA
Singapore total
Tanjung Pelepas PTP
Private
Private
APMT
Fujairah
Public
Private
DPW
Fujairah Container Terminal
16.7
124
Table 6.10
Comparison of key factors of gateway ports competing with Vizhinjam, 2008
Port
Terminal
Landlord
Terminal
Operator
Karachi
Karachi International Container

Terminal (KICT, West Wharf)
Pakistan International Container
Terminal (East Wharf / Berths 6-9)
Public
Private
Public
Private
General Cargo Terminal
Public
2008
2008 Estimated
Utilisation
Throughput
Capacity
(%)
('000 teu)
('000 teu)
Operator
Hutchison Port
Holdings
Pakistan International
Container Company
Karachi total
Port Qasim
Qasim International Container

Terminal (QICT)
Public
Private
DPW
Quay
Length
(m)
No. of
Cranes
Yard
Area
(ha)
Water
Depth
(m)
658
800
82.2
973
21
12
392
450
87.1
600
22
13.5
250
300
83.3
1,300
1,550
83.9
1,573
12
43
687
800
85.9
600
24
11
Yard
Area
(ha)
Water
Depth
(m)
Note: Other key gateway port in the region is JNPT which has been covered in detail in the previous sections
Table 6.11
Comparison of key factors of spoke/feeder ports competing with Vizhinjam, 2008
Port
Terminal
Landlord
Terminal
Operator
2006
2006 Estimated
Quay
Utilisation
Operator Throughput
Capacity
Length
(%)
('000 teu)
('000 teu)
(m)
Chittagong
Chittagong Container Terminal/General Cargo

Berth
Public
Public
Public
1,070
1,100
97.3
900
No. of
Cranes
4
20
9.1
Note: Other key spoke/feeder ports include Cochin, Kandla, Kolkata, Mundra, Pipavav, Tuticorin, Chennai and Chittagong which have been covered in detail in previous sections Source:
Drewry Research
125
6.5
Ship size limitations at competing ports

Shipping lines today are vying to deploy large vessels on main trade routes to achieve
more economies of scale, which makes draft availability and other support infrastructure
present at the port an important criterion for selecting it as a hub port, or a direct call port.
Table 6.12 gives an idea about estimated ship size limitation, in terms of teu, at each of the
competing ports covered in this study.
The basic parameters used to assess the maximum sized ship which can be
accommodated in each port are water depth alongside the berth and crane outreach. In
some ports, there is sufficient water depth for a certain size of ship, but the cranes are not
big enough, and vice versa, so the lowest common denominator applies. In reality, a
number of other factors are at work to determine what sized ship can be accommodated
including:
Whether the ship is on its maximum draft when calling
How many cranes of a certain size a terminal has
The depth of the channel
The size of the turning basin
The length of the berth length
The height of the cranes
Table 6.12
Container ship size limitation at competing ports
Maximum
Water Depth
Alongside
(M)
Port
Maximum
Vessel Size
(Teu)
Aden
8,500
16
18
Sufficient water depth to handle largest

vessels afloat, but not cranes
Chennai
5,000
13.4
20
Large cranes but limited by draft
Chittagong
2,000
9.1
13
Panamax cranes but ship size limited by draft
Cochin
4,500
12.5
13
Near Panamax draft
Colombo
10,000
15
19
Confirmed by port
Dubai
11,000
15
22
Large cranes, but draft means very largest

ships could not call fully loaded
Fujairah
9,500
15
18
JNPT
6,500
13.5
20
Confirmed by port. Large cranes but limited

by draft
Kandla
1,500
10.7
n/a
No gantries
Karachi
5,000
13.5
20
Only one crane of 20 rows outreach
Maximum
Crane Outreach
(Rows)
Notes
126
Table 6.12 (contd

Maximum
Port
Vessel Size
(Teu)
Maximum
Water Depth
Alongside
(M)
Maximum
Crane Outreach
(Rows)
Notes
Khor Fakkan
9,500
15
20
Kolkata
2,500
12
13
Confirmed by port
Mundra
8,000
17.5
20
Maximum ship size as per ports website.

Draft and crane size suggests vessels larger
than 8,000 teu might be feasible
Pipavav
Port Klang
6,000
12.5
18
Confirmed by port
10,000
16
22
Draft and cranes are sufficient for largest

ships afloat but port states that 120,000 dwt
is the maximum ship size which can be
accommodated
Port Qasim
5,000
11
18
Note: Fully loaded Panamax could not access

due to draft limitations
Salalah
13,500
16
22
Based on estimated true size of Emma

Maersk class vessels
Singapore
13,500
16.7
22
Ditto
Tanjung Pelepas
13,500
16
22
Ditto
5,000
10.7
13
Note: Fully loaded Panamax could not access

due to draft limitations
Tuticorin
Clearly, Salalah, Singapore and Tanjung Pelepas offer the most capable facilities for large
size container ships, with Colombo currently in the second tier bracket, along with Dubai
and Port Klang.
6.6
Comparison of transhipment tariffs

Table 6.13 provides a comparison of indicative transhipment tariffs at the various hub ports
in the region, plus an indication of what some of the gateway ports charge. These tariffs
are based on anecdotal evidence obtained from shipping lines and are believed to be
representative of actual prices being paid by medium sized carriers. Every effort has been
made to try and ensure that the comparison is like for like, i.e. tariffs covering both moves
of a cycle, clarification of whether the tariff is per box or per 20ft/40ft, how empties are
charged, whether ancillary services such as lashing/unlashing are included etc. However,
it must be kept in mind that an element of uncertainty must always exist when access to
actual contracts is not available.
As can be seen, Colombo is very competitive in price terms, broadly on a par with Middle
East and Malaysian hubs. Singapore has an average rate of US$100-110 per box per
cycle. At least one of these contracts not only combines the 20'/40' rate into a single rate
per box, but also includes items such as berthing/unberthing, free ratios, shut-outs,
127
dangerous goods surcharge etc. These items probably equate to at least an extra 5%
discount. It should also be noted that the above mentioned rates are separate from the JV
deals which PSA has done. The MSC deal, which has a JV of 28 years with PSA, is
understood to have very a competitive structure and rates
Gateway ports which carry out transshipment as an add-on to their main business
generally charge higher prices than dedicated hubs. However, the exception is JNPT
which has the lowest transshipment tariffs in the region. Its actual transshipment activity is
limited though, due to lack of capacity, its location and Indian cabotage laws.
Table .6.13
Comparison of typical selected container transhipment tariffs,
mid sized operator
Port
US$ Per 20'
US$ Per 40'
100
140
Colombo
60-70
100-110
Dubai
70-80
100-110
100-150
125-175
Khor Fakkan
80
115
Mundra
70
140
Nhava Sheva (JNP)
55-75
80-150
Port Kelang
65-75
100-115
80
115
Singapore (PSA)
100-115
100-115
Tanjung Pelepas
65-75
100-115
Tuticorin
15-20
30-40
Aden
Karachi
Salalah
Notes
Includes lashing/unlashing
Prices shown are for full boxes. Empties approx 30% less
Includes lashing/unlashing
Note: Typical contract price per cycle ($).

6.7
Comparative hub port economics

Singapore and Dubai in particular command substantial shares of ISC transhipment traffic
even though theoretically this traffic could equally be routed via Colombo. However, there
are strong reasons why this is not the case. In simple terms, location is a key determinant
of the competitiveness of the regions transhipment ports. The extent of the deviation from
the East-West shipping route for the mainline vessel, plus the distance from each hub port
to the various spoke ports will play a large role. However, a number of other factors will
also come into consideration for any particular shipping line weighing up hub port
alternatives including:
The nature of the mainline service (i.e. way port service passing through the region or
an end-to-end service starting and finishing in the region).
Implications on the size and number of ships required to be employed throughout a

carriers global network.
Implications on overall cargo transit times.
128
Container transhipment charges at hub port.
Hub port costs (e.g. port dues, tugs, pilotage etc.).
Feeder costs, range of outports served and frequency.
Port productivity, reliability and vessel waiting times.
The size of the market share of the carrier weighing up the hub port option.
Specific political and commercial reasons (e.g. NOL/APLs Singaporean ownership

previously meant that the PSA run Aden facility would have been seen as a
preference port of call).
The origin/destination distribution of cargo amongst the various parts of the region.
The volume of cargo for each particular part of the region.
A combination of the use of varying hubs on different strings may well be the most cost
effective hub and spoke option, although this may not allow the full network advantages to
be realised (i.e. reducing the number of mainline ships and/or upgrading mainline vessel
size).
Feeder costs are an area that is one of the most important factors in the equation when
determining the relative attractiveness of various hub ports. However, whilst feeder rates
should be primarily a function of distance, several other factors will have a bearing. For
example the extent of competition between rival feeder operators on any particular route
will affect prices, as will the volume of cargo moving on that route (more cargo in theory
allowing larger and hence cheaper feeder vessels to be deployed). Singapore in particular
benefits in this respect due to its sheer scale of operations, handling four times more
transhipment volumes than its next largest rivals.
Tables 6.14 and 6.15 show the distances between Colombo, Vizhinjam, Singapore, Dubai
and selected spoke ports. As can be seen, relative to Dubai, Colombo/Vizhinjam is only in
a superior location for the likes of Mumbai. Ports further west are closer to Dubai. This,
amongst other things, is one reason why the west coast of India is not a stronghold for
Colombo/Vizhinjam .On the east coast, Colombo/Vizhinjam score better, being closer to
the main spoke ports in all cases. However, the difference varies, with the advantage over
Singapore most pronounced for Chennai. For Kolkata and Chittagong, the difference in
distance only accounts for an extra days sailing or so at most. This negative factor for
Singapore can be offset by factors such as frequency of service, connectivity at Singapore
and feeder freight rates.
Table 6.14
Colombo/Vizhinjam v, Singapore: Selected spoke port distances
(Nautical miles)
Chittagong
Kolkata
Chennai
1494
1287
1462
+207
+32
1636
1228
1404
+408
+232
1586
590
765
+996
+821
Singapore
Colombo
Vizhinjam
Colombo advantage
Vizhinjam advantage
Source: Drewry Shipping Consultants Ltd
129
Table 6.15
Colombo/Vizhinjam v, Dubai: Selected spoke port distances
(nautical miles)
Karachi
Kandla
Mumbai
Dubai
Colombo
Vizhinjam
Colombo advantage
709
1334
1143
912
1244
1052
1121
881
689
-625
-332
+240
Vizhinjam advantage
-434
-140
+432
Source: Drewry Shipping Consultants Ltd
Table 6.15 provides an indication of Colombo/Vizhinjams competitive position relative to

Singapore, Dubai and Salalah on the basis of the theoretical cost of serving a number of
regional spoke ports. The analysis has been developed by estimating feeder costs (based
on distance, fuel costs and vessel operating costs), mainline vessel costs (based on
deviation distance to each hub, and port access costs) and transhipment costs (for a full
cycle).
It must be noted that this is a theoretical exercise, as feeder costs in particular are not only
driven by the calculated operating cost, but also by factors such as the extent of
competition between feeder operators, port delays at hub and spoke ports served, and the
size of vessels deployed (which are a function not only of the size of the feeder flow on a
particular route but also the extent to which there is consolidation of feeder operators on
each route). Nevertheless, the analysis still gives a good indication of where the relative
strengths and weaknesses of each hub port lie.
When compared with Singapore, the estimated total cost of transhipment and feeding
favours Colombo/Vizhinjam in all cases. However, for west coast ISC ports the comparison
is largely academic, as Singapore is at too much of a disadvantage in distance terms.
When looking at east coast ISC ports, especially Chittagong and Kolkata, Colombos
advantage is minimal. This is especially the case given the much greater connectivity at
Singapore, and the greater competition between feeder operators. For this reason,
Singapore is able to successfully compete with Colombo for these feeder markets.
The table below provides an estimate of network cost for a shipping line to transport cargo
through a hub and spoke network. Various scenarios have been drawn to calculate costs
incurred by a shipping line to transport a given parcel size of containers from lower east
and west coast of India & Colombo. In all these scenarios, the average port dues and
container handling charges at the Vizhinjam port has been assumed to be equal to the fee
charged by Colombo. For gateway traffic, Vizhinjam is competing with Southern coast
Indian coasts. Therefore, Vizhinjam is assumed to have matched THC charged by the
Cochin port which is USD60/Teu. As per our primary survey, Colombo offers a minimum of
20% discount on its card rate to most of the large shipping lines.
Scenario 1
This is the current scenario wherein Chennai, Tuticorin and Cochin are feeder ports in the
overall network with Colombo as the hub port. In this case, a large mother vessel calls
Colombo port with a gateway traffic of 2000 Teu in addition to feeder traffic from Chennai
(2000 Teu), Cochin(1200 Teu) and Tuticorin (1600 Teu). Hence, by calling at the port of
130
Colombo the overall parcel size handled by a mainline vessel is 6800 Teu. Here the overall
network cost per Teu incurred to shipping lines is approximately USD 156.6.
Scenario 2
This is a hypothetical situation wherein the same network is replicated at Vizhinjam. The
port costs for Vizhinjam have been estimated to be equal to Colombos tariff rate, which is
almost one third of the port tariff charged by India ports. The container handling charges
for Vizhinjam is equal to Cochins tariff as Colombos container handling charges are
higher.
In this case, Vizhinjam would not be able to attract gateway container traffic from Colombo
as it is served by large mainline vessels and the cost of transhipment from Colombo to
Vizhinjam would be very high. Therefore, the total parcel size is reduced by 2000 Teu to
4800 Teu in the case. Here the overall cost per Teu for a shipping line is USD 160 which is
only USD 3 higher than scenario 1. So even though, Vizhinjam matches Colombo costs
but still looses on Colombo volumes and is costlier by USD 3/Teu.
Scenario 3
This is a hypothetical situation wherein Vizhinjam is the hub port while Tuticorin & Cochins
cargo is transported on a truck to the port.
Scenario 4
The network in scenario 1 is replicated with Cochin as the hub port
Scenario 5
Cochin is a hub port however Chennai & Tuticorin cargo is transported via land to the port
of Cochin
Scenario 6
The network cost of transhipment of ISC cargo through Salalah
Scenario 7
The network cost of transhipment of ISC cargo through Singapore
In all the scenarios, it is evident that in order to have a parcel size of 6800 Teus and serve
markets of Colombo, Chennai, Tuticorin and Colombo, a hub-spoke network through
Colombo is the cheapest option for a shipping line.
Our analysis suggests that only if Vizhinjam port provides discounts as high as 40-50% of
the tariff charged by Colombo port, then the overall network cost for scenario 2 would be
cheaper by 15% as compared to overall network cost in scenario 1.
131
Table 6.16
Shipping network cost analysis
VIA COLOMBO
Domestic Cargo
Feeder cost
Mainline vessel cost
Transshipment cost
Total cost (per Teu)
Parcel Size
Total Cost
MAA
103
3.35
74.00
180.18
2000
360,366
TUT
44.0
3.35
74.00
121.33
1600
194,135
COK
95
3.35
74.00
172.81
1200
207,378
CMB
148
3.35
0.00
151.35
2000
302,706
156.56
6800
1,064,584
VIA VIZHINJAM
Domestic Cargo
Feeder cost
Transshipment cost
Parcel Size
Total Cost
MAA
111.2
5.2
74.0
190.46
2000
380,915
TUT
42.2
5.2
74.0
121.44
1600
194,306
COK
82.5
5.2
74.0
161.79
1200
194,144
CMB
164.3
5.2
74.0
243.57
160.28
4800
769,365
Note: No hinterland traffic for Vizhinjam

VIA VIZHINJAM (road transfer of Cochin & Tuticorin cargo)
Inland Haulage
MAA
THC(VZM)
Feeder cost
Transshipment cost
Parcel Size
Total Cost
111.2123
5.2
74.0
190.46
2000
380,915
TUT
93
61
5.2
160.11
1600
256,173
COK
110
61
5.2
176.12
1200
211,350
CMB
164.3
5.2
74.0
243.57
176.76
4800
848,438

Inland haulage is incremental cost of trucking to VZM
132
Table 6.16 (contd)

VIA Cochin
Domestic Cargo Feeder cost
Transshipment cost
Parcel Size
Total Cost
127.3
14.4
75.7
217.47
2000
434,943
TUT
71.3
14.4
75.7
161.46
1600
258,342
COK
61
14.4
75.82
1200
90,979
CMB
186.4
14.4
75.7
276.60
163.39
4800
784,263
MAA
VIA Cochin (road transfer of Chennai & Tuticorin cargo)

Inland Haulage
THC(COK)
Feeder cost
Transshipment cost
MAA
447
61
14.4
Total cost (per Teu) Parcel Size Total Cost

522.54
2000
1,045,073
TUT
174
61
14.4
250.15
1600
400,233
COK
61
14.4
75.82
1200
90,979
CMB
186.4
14.4
75.7
276.60
320.06
4800
1,536,285

Inland haulage is incremental cost of trucking from Coimbatore to VZM wrt to TUT & COK
VIA SALALAH
Domestic Cargo Feeder cost
Transshipment cost
Parcel Size
Total Cost
MAA
162.0
14.66
61.50
238.12
2000
476,230
TUT
82.1
14.66
61.50
158.26
1600
253,210
COK
170.3
14.66
61.50
246.42
1200
295,710
CMB
344.2
14.66
61.50
420.31
2000
840,618
SLL( other Transshipment)
14.66
61.50
76.16
4000
304,629
128
14.66
142.66
1600
228,252
193.44
12400
2,398,649
SLL(Hinterland)
133
Table 6.16 (contd)

VIA SINGAPORE
Domestic Cargo
Feeder cost
Transshipment cost
Parcel Size
Total Cost
MAA
164.3
16.16
115.0
295.42
2000
590,837
TUT
68.5
16.2
115.0
199.62
1600
319,393
COK
143.7
16.2
115.0
274.85
1200
329,819
CMB
243.6
16.2
115.0
374.75
2000
749,501
SIN( other Transshipment)

SIN(Hinterland)
16.2
115.0
131.16
4000
524,652
115
16.2
131.16
1600
209,861
219.68
12400
2,724,063
Note: CMB- Colombo, SIN-Singapore, SLL-Salalah, COK-Cochin, MAA- Chennai, TUT- Tuticorin, VZM-Vizhinjam
All costs in USD & volume in Teu
134
Gateway Container Traffic Forecast - India
7. Gateway container traffic forecast India

Objective
To identify
Methodology for forecast and main assumptions
Gateway traffic forecast - India
Gateway traffic forecast Regional port clusters
Gateway traffic forecast - Vizhinjam
Key Findings
In the base case scenario, Indias GDP is expected to grow at 6.4% over the forecast
period FY 2010-2044. During this period, Indias containers gateway traffic is forecast
to grow at 7.5. % p.a. from 7.9 Mn Teu in FY 10 to 91 Mn Teu in FY 44. North West
India would continue to dominate the container traffic handling volumes with
estimated 60% of the forecast traffic in FY44 handled at Maharashtra and Gujarat
ports. The central & upper east coast would have a market share of 8%, a slight
increase from 7.1% share in FY09. The share of Lower west & lower east coast ports
in India is likely to increase from 25% in FY09 to approximately 32% in FY 44.
Tamil Nadu would be the largest contributor of container traffic, followed by Andhra
Pradesh, Karnataka and Kerala respectively in descending order. Therefore, the
lower east coast traffic would have a dominant share in the region with approximately
88% of the container traffic handled by ports it that cluster. While, Lower west coast
region would have a small share of 12% in the overall traffic primarily due to low
container traffic development in the immediate hinterland of the region.
Vizhinjam is most likely to attract container traffic from its immediate hinterland which
it shares with the Cochin port. During the forecast period, with increasing in mainline
calls due to increasing transhipment traffic, it is estimated that the port would gain
market share in secondary hinterland currently served by Tuticorin and Chennai.
Conclusion
In the three growth scenarios, namely, high, base and low case, the container traffic at the
proposed Vizhinjam port is forecast to grow from approximately 25,000 Teu in FY 2014 to
0.73 Mn Teu, 0.62 Mn Teu and 0.57 Mn Teu in FY 2044 respectively.
135
7.1
Development of Indian container port market

The Indian general cargo markets i.e. break bulk cargo and containerised cargo has
witnessed some spectacular growth in recent years. The compounded annual growth rate
over the period of last nine years i.e. from 1999-00 is 12.5%. Important to note here, is that
the break-bulk cargo during the said period has increased at 6.3% whereas the rate of
increase of the containerised cargo is 15.9%. The unprecedented growth in containerised
cargo has really made possible the overall growth rate of 12.5% per annum.
As per the India Ports Association (IPA) data and Drewry estimates, in FY2009, general
cargo constituted of 105.9m tonnes of containerised cargo and 34.1m tonnes break-bulk
cargo. The penetration level has been continuously increasing over the years and now
stands at 75.7%, while the average weight of container is still quite high, compared to the
global average of 9.0 tonnes/teu and stands close to 14.5 tonnes/teu.
Figure 7.1
General cargo growth in India (FY2000-09)
120.0
75.7% 80%
74.1%
104.4
105.9
59%
61%
59%
69.1%
68%
67%
64%
100.0
60%
83.2
57%
70%
50%
67.0
57.7
60.0
40%
50.0
41.6
40.0
27.6
21.1
31.9
21.7
37.2
36.4
28.3
28.2
28.7
32.0
36.6
Growth Rate
Million Tone
80.0
30%
34.1
20%
23.4
20.0
10%
0.0
0%
FY 00
FY 01
FY 02
FY 03
Breakbulk
FY 04
FY 05
Containerised *
FY 06
FY 07
FY 08
FY 09
Penetration (%)
Source: IPA, Drewry
The major reason of high average weight per teu for containers in India is the profile of the
commodities handled in containers in India. Some of the major heavy commodities moving
in containers in India are machinery, spares, steel & metal products, grains, stones, sugar,
paper & paper products, etc. The high average weight of these commodities and their
share in the overall commodity profile of goods carried in containers in India have resulted
in high average weight per Teu.
Table 7.1 shows the historical data of container traffic generated in India. The definition of
general cargo encompasses data reported by the IPA under containerised tonnage and
break bulk tonnage. Therefore, the sum of total tonnage handled at all ports in India for
both container traffic and break bulk traffic provides the final figure for general cargo
tonnage handled in India.
Break bulk tonnage encompasses commodities which have potential to be containerised in
future. The current penetration level as per IPA statistics has reached 75.7% growing
steadily from 57% in fiscal year 2000. The penetration level is calculated by dividing the
total containerised tonnage by the total general cargo tonnage handled in India.
136
Thus, penetration level has been calculated on the break bulk commodities excluding dry
and liquid bulk tonnage handled in India. Drewry is of the opinion that commodities
handled in dry and liquid bulk do not provide scope for future containerisation, therefore
they are excluded while calculating the penetration levels in the country. For example,
certain commodities like maize, flat rolled steel coils, scrap; granite, etc have traditionally
been transported as break bulk cargo. However, in recent years, owing to changing
shipping business dynamics, like multiple consignees with requirement of small volumes
and increasing bulk vessel freight rates have resulted in conversion of a certain portion of
these commodities from break bulk to containers. These commodities still continue to
move in large volumes as break bulk cargo.
Drewry assumes that the current container penetration levels in India would continue to
grow, encompassing more break bulk commodities in its fold and has potential to reach up
to 80% in the future. This assumption has also been utilised in developing the container
forecast model which has been discussed in greater detail in the later sections.
137
Table 7.1
Development of total Indian general cargo and container market (FY00 09)
(000 tonnes)
FY 00
FY 01
FY 02
FY 03
FY 04
FY 05
FY 06
FY 07
FY 08
FY09
CAGR
'00-'09
All ports
Break-bulk
21,055
21,707
23,405
28,299
28,162
28,698
31,957
37,173
36,575
34,085
5.5%
Containerised *
27,640
31,873
36,380
41,572
49,984
57,722
66,981
83,170
104,377
105,936
16.1%
Total
48,695
53,580
59,785
69,871
78,146
86,420
98,937
120,343
140,952
140,022
12.5%
57%
59%
61%
59%
64%
67%
68%
69.1%
74.1%
75.7%
Penetration (%)
Gateway teu (inc. empties)
2,165,041
2,445,744
2,732,337
3,194,037
3,758,183
4,308,824
4,807,434
6,056,894
7,266,146
7,320,662
14.5%
Gateway teu (loaded)
1,804,370
2,011,430
2,215,627
2,583,987
3,086,167
3,616,992
4,066,500
4,961,929
6,026,522
6,008,762
14.3%
13%
12%
17%
18%
15%
12%
26%
20%
1%
Growth % (gateway teu inc

empties)
Ave. weight/teu
12.8
13.0
13.3
13.0
13.3
13.4
13.9
13.7
14.4
14.5
Ave. weight/ loaded teu
15.3
15.8
16.4
16.1
16.2
16.0
16.5
16.8
17.3
17.6
Transshipment teu
23,162
24,654
168,945
187,034
207,694
161,755
185,179
215,259
351,667
225,826
28.8%
2,188,203
2,470,398
2,901,282
3,381,071
3,965,877
4,470,579
4,992,613
6,272,153
7,617,813
7,546,488
14.7%
Growth %
13%
17%
17%
17%
13%
12%
26%
21%
-1%
Transshipment incidence (%)
1.0%
5.8%
5.5%
5.2%
3.62%
3.71%
3.4%
4.6%
3.0%
Total teu
Note: * Excludes transhipment

Source: Compiled by Drewry, derived from Indian Ports Association data
138
Table 7.2
Development of estimated share of total Indian break-bulk and container traffic per region, FY 2000- 2009
FY09
CAGR
'00-'09
120,343
4,961,929
1,094,965
215,259
120,343
140,952
6,026,522 6,008,762
1,239,624 1,311,900
12.5%
14.3%
15.4%
225,826
28.8%
4,991,329
6,272,153
7,617,813 7,546,488
14.7%
17,685
324,580
93,047
0
20,532
402,328
124,413
0
29,254
684,237
223,919
0
235,891
417,627
526,741
30,129
1,591,996
364,248
186,396
36,013
1,873,393
384,912
207,184
37,614
2,062,651
365,771
161,440
1,827,988
2,142,640
2,465,489
3,206
109,117
42,085
0
2,892
116,265
48,216
428
3,438
132,775
47,994
90
151,202
164,909
180,859
FY 00
FY 01
FY 02
FY 03
FY 04
FY 05
FY 06
FY 07
Total General Cargo tonnage

Gateway teu (empty)
Transshipment teu
48,695
1,804,370
360,671
23,162
53,580
2,011,430
434,314
24,654
59,785
2,215,627
516,710
168,945
69,871
2,583,987
610,050
187,034
78,146
3,086,167
672,016
207,694
86,420
3,616,992
691,832
161,755
98,937
4,066,500
740,934
183,895
Total teu
2,188,203
2,470,398
2,901,282
3,381,071
3,965,877
4,470,579

Gateway teu (empty)
Transshipment teu
7,982
56,976
23,209
0
9,719
66,026
25,508
0
12,166
95,597
41,766
0
14,637
120,063
52,201
0
8,004
168,052
67,839
0
Total teu
80,185
91,534
137,363
172,264

Gateway teu (empty)
Transshipment teu
21,744
1,095,670
200,604
23,152
23,429
1,228,508
256,435
24,376
27,040
1,340,256
319,238
168,494
Total teu
1,319,426
1,509,319
2,795
94,458
39,701
0
134,159
FY 08
Total Indian cargo figures
351,667
Upper west coast port figures

32,261
849,171
222,784
32,125
813,614
282,765
16.7%
34.4%
32.0%
908,156
1,071,955 1,096,379
33.7%
42,965
2,292,900
350,277
179,648
50,761
2,698,143
523,715
214,963
60,701
57,843
3,225,508 3,199,174
625,336
620,059
11.5%
12.6%
13.4%
225,481
28.8%
2,589,862
2,822,825
3,436,821
4,177,437 4,044,715
13.3%
3,469
141,199
45,363
510
3,546
155,890
48,278
315
3,607
170,689
48,272
2,963
23,128
1,046,912
215,612
28,861
31,250
1,321,243 1,324,193
236,263
257,728
15.6%
14.4%
16.7%
187,072
204,483
221,924
1,046,912
Greater Mumbai port figures
326,593
Lower west coast port figures

Gateway teu (empty)
Transshipment teu
Total teu
23,128
28,861
31,250
1,321,243 1,324,193
15.6%
14.4%
139
Table 7.2(contd)
FY09
CAGR
'00-'08
FY 00
FY 01
FY 02
FY 03
FY 04
FY 05
FY 06
FY 07
FY 08
8,505
394,211
64,255
0
10,531
429,368
79,688
0
11,189
476,816
81,220
0
12,949
528,447
109,343
548
14,425
662,821
130,587
0
17,082
782,275
141,547
0
19,382
896,060
159,815
0
23,128
1,046,912
215,612
0
28,861
31,250
15.6%

Gateway teu (empty)
Transshipment teu
1,321,243
236,263
21,000
1,324,193
257,728
0
14.4%
16.7%
-
Total teu
458,466
509,056
558,036
638,338
793,408
923,822
1,055,875
1,262,524
1,578,506
1,581,921
14.8%
1,613
14,057
6,370
0
1,370
13,347
6,885
0
1,383
15,833
5,684
0
2,467
14,113
7,394
0
2,137
13,625
6,816
0
1,650
33,194
11,955
0
1,938
32,150
13,313
1,284
2,460
39,049
16,720
0
2,840
2,942
6.9%

Gateway teu (empty)
Transshipment teu
50,274
20,846
0
65,195
22,929
0
18.6%
15.3%
-
Total teu
20,427
20,232
21,517
21,507
20,441
45,149
46,747
55,769
71,120
88,124
17.6%

Gateway teu (empty)
Transshipment teu
5,542
148,998
26,532
10
4,573
165,064
23,713
278
4,477
170,860
20,586
22
5,366
196,593
28,870
0
6,066
227,077
36,499
0
6,553
258,402
31,234
0
7,934
272,373
44,844
0
9,254
301,256
50,289
0
11,406
367,155
62,438
0
10,814
378,229
53,554
0
7.7%
10.9%
8.1%
-
Total teu
175,540
189,055
191,468
225,463
263,576
289,636
317,217
351,545
429,593
431,783
10.5%
Lower east coast figures

Central east coast figures

Upper east coast figures
Note: Includes some estimated figures and some totals have been rounded to nearest point
140
7.2
Indian container port market forecast 2010 2044
Ports market share & their hinterland
All ports on the Western and Eastern coasts have potential to attract a certain proportion of
overall cargo from their hinterland. However, overall traffic varies for each region and port
due to factors such as the size of hinterland, port connectivity, quality of service available
at the port etc. The sum total of container traffic emanating from these regions should be
equal to the total potential size of the Indian port market. It is, therefore, necessary to first
establish the overall Indian container market potential which subsequently is sub divided in
to potential of each region and their ports.
Historical data & correlation
Using port statistics supplied by the Indian Ports Association (IPA) and Drewry estimates,
Drewrys forecasting methodology highlights the size of the potential market available to
each region. It is done by initially establishing a statistically significant correlation between
the Indian GDP and general cargo tonnage throughput in India. General cargo tonnage
has been used rather than overall port tonnages, in order to exclude dry and liquid bulk
cargoes.
On plotting the data of GDP and general cargo tonnage FY 2005 onwards, it is noted that
there is a strong positive correlation between GDP and general cargo traffic. This
relationship has been used for forecasting future Indian general cargo tonnage, based on
assumptions for future Indian GDP.
Figure 7.2
Indian GDP and General cargo traffic: Estimating the trend line
180,000
FY 2010
General Cargo ('000 Tonnes)
160,000
140,000
120,000
y = 5.55x - 43,129
R2 = 0.9729
100,000
FY 2005
80,000
60,000
40,000
20,000
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
GDP at factor cost at FY 2000 prices (Rs Bn)

141
High, Base & Low case scenarios
Three scenarios viz. high, base and low case, have been drawn from FY 2008 to FY 2044
with respect to various estimated Indias GDP growth rates. The base case scenario is
based on estimated GDP growth rate as per current forecasts by the International
Monetary Fund. On the other hand high and low case scenarios take an optimistic and
pessimistic view on the estimated growth rate, respectively.
India had been witnessing high economic growth rates over the past few years, which
resulted in sustained increase in the overall trade and containerised traffic. However, the
recent economic downturn has resulted in reduced container traffic over the past year. The
trade, however, is expected to recover during financial year 2011.
Thus, India seems to be in a position to witness healthy economic growth rate in the post
economic meltdown scenario. Indias GDP is significantly dependent on the agricultural
sector and could fluctuate from year to year depending on the monsoon apart from global
economic conditions. Therefore, it is difficult to assume a very high GDP growth rate for
India over the extended period.
Drewry has estimated three different economic growth scenarios for India during the
forecast period. In the base case scenario, Indias GDP growth rate is based on IMFs
estimates for countrys economic growth during the same period. The estimates were
published by IMF in April 2010. Future economic growth rates are expected to taper down
from growth levels forecast during the short term (IMF forecasts), thus decreasing
gradually over later years during the forecast period. In the high case, economic growth
rate is estimated to be 30 basis points higher than growth rate in each financial year in the
base case scenario. In the low case, growth rate has been estimated to be 20 basis points
lower than the growth expected in the base case for each financial year.
Therefore, in high case scenario, Indias GDP is expected to grow at a CAGR of around
6.9% over the forecast period FY14 to FY44. The base case scenario envisages relatively
modest growth rate, particularly, in the latter half of the forecast period. The average
annual growth of GDP in base case scenario is estimated to be around 6.6% per annum
over the forecast period. Under low case scenario, the average annual growth rate of
Indian GDP over the forecast period has been estimated at 6.4% to reflect a more
pessimistic scenario of the Indian economy. Some of the key factors, which are expected
to provide boost to the Indian economy are:
Infrastructure investment & development.
Changing trade policy, which are expected to provide greater emphasis on export led
growth.
Increasing role of industrial sector.
Development of SEZs, primarily focussing on port based industry and export market.
Rising consumer spending and the expected growth in the retail sector.
142
Container penetration levels
Drewrys research regarding the subject of container penetration which has involved the
interpretation of Indian Ports Association data concluded that a period of recent growth
had been boosted by rapid containerisation of general cargo which has increased from
60.0% in FY01 to around 75.7% in FY09. The current penetration levels are amongst the
highest across the globe and are expected to stay around 77% over the forecast period in
the base and low case scenarios. However in the high case scenario, it is expected to
increase further up to 78% by the end of the forecast period.
The forecast Indian general cargo tonnage is converted into containerised tonnes using an
assumption on container penetration. The next stage involves converting the tonnage into
Teu units using an assumed average weight per teu. The current average weight per teu is
estimated at 14.5 tonnes, which is equivalent to the average weight of gateway teu
(including empties). Drewry estimates the current average weight per teu to remain stable
at 14.5 tonnes/teu over the forecast period in the base and low case scenario. However, in
the high case scenario, it is estimated that the average weight per teu is likely to reduce to
13.5 tonnes/teu during the forecast period.
Indian container volume forecast
Table 7.3 is the projected Indian container traffic using a high case scenario. Here, the
total hinterland container market (gateway traffic) is projected to achieve a CAGR of
around 8.0% and total container traffic is expected to increase from almost 7.3m teu in FY
2009 to over 109.4 Mn teu by 2043-44. This growth reflects the gradual increase in
container penetration to 78%. Table 7.4 provides the projected Indian container traffic in
the base case GDP growth scenario. It shows, the total hinterland container market will
grow by an average of 7.5% per annum, from 7.3m teu in FY09 through to nearly 91.0m
teu by FY44. This growth reflects the gradual increase in container penetration to 77% and
a steady rise in the transhipment incidence across the region.
Table 7.5 is the projected container traffic for India based on a low case GDP growth
scenario. Here, the total hinterland container port traffic is projected to increase from
almost 7.3m teu in FY09 to nearly 85.0m teu by FY44, which reflects an average annual
growth of 7.2% per annum.
As per Drewry, the most likely scenario to occur is the base case, wherein the Indian
container traffic is estimated to grow at a CAGR of 7.5%.
143
The matrix below would summarise the overall forecast methodology for container
volumes adopted by Drewry:
Step
1
Methodology
Estimate linear equation with GDP at factor cost at constant independent variable and General Cargo
as dependent variable. This is estimated using econometric method of simple linear regression
technique using data from FY05 to FY10.
Estimate three Indian GDP growth rate scenarios till FY44. Based on the economic growth rate
India Container Volume Forecast
estimation, we derive the high, base and low growth scenarios.

3
Forecast general cargo volumes till FY44 based on the estimated linear equation in all the three
scenarios.
Estimate growth in container penetration level over the forecast period (similar penetration level
estimated for all 3 scenarios).
5
6
Derive containerised tonnage based on container penetration level estimated till the forecast period.
Estimate average weight per teu over the forecast period. Equal average weight per teu taken for all
scenarios.
Forecast container tonnage converted into twenty foot equivalent units (teu) volumes based on
average weight per teu to arrive at gateway teu (both loaded & empty containers included).
Transhipment volume share is estimated over the forecast period. The percent share of transhipment
volume is estimated for the overall container volume expected to be handled at the port (hinterland +
transhipment, loaded + empty).
Region-wise Volume Forecast
9
10
Indias container volume is forecast, adding volumes derived through step (7) & step (8).
Derive current market share of overall container volumes handled at various port clusters for gateway
traffic handled in India (step-7) and estimate future market share of the region over the forecast
period. The market share is estimated based on economic development in region, new ports,
expansion of current facilities, rail & road connectivity project, hinterland container volume estimation
and primary & secondary survey results.
11
Gateway container volumes for each region derived for the forecast period based on estimated
market share of the region.
12
Transhipment volume share is estimated over the forecast period. The percent share of transhipment
volume is estimated for the overall container volume expected to be handled at the port (hinterland +
transhipment, loaded + empty).
144
Table 7.3
High case scenario: Indias container traffic forecast
Year
Real GDP
(Constant Prices)
GDP Growth
Indian General cargo

('000 tonnes)
Container Penetration
(%)
Containerised Tonnage
('000 tonnes)
Gateway Teu
(Inc. empties)
Annual Growth
FY09
33,394
6.7%
140,022
75.7%
105,936
7,320,662
0.8%
FY10
35,865
7.4%
150,663
75.7%
113,987
7,920,761
8.2%
FY11
38,985
8.7%
173,436
75.7%
131,217
9,049,425
14.2%
FY12
42,389
8.7%
192,342
75.9%
145,988
10,068,124
11.3%
FY13
45,920
8.3%
211,959
76.0%
161,089
11,264,977
11.9%
FY14
49,771
8.4%
233,354
76.0%
177,349
12,489,354
10.9%
FY15
53,950
8.4%
256,564
76.3%
195,759
13,883,595
11.2%
FY16
58,470
8.4%
281,676
76.3%
214,919
15,351,332
10.6%
FY17
63,323
8.3%
308,635
76.3%
235,488
16,941,599
10.4%
FY18
68,502
8.2%
337,405
76.3%
257,440
18,655,096
10.1%
FY19
74,036
8.1%
368,149
76.5%
281,634
20,557,214
10.2%
FY20
79,944
8.0%
400,965
76.5%
306,738
22,554,263
9.7%
FY21
86,243
7.9%
435,955
78.0%
340,045
25,188,502
11.7%
FY22
92,951
7.8%
473,223
78.0%
369,114
27,341,761
8.5%
FY23
100,089
7.7%
512,873
78.0%
400,041
29,632,689
8.4%
FY24
107,675
7.6%
555,013
78.0%
432,910
32,067,413
8.2%
FY25
115,728
7.5%
599,748
78.0%
467,803
34,652,105
8.1%
FY30
164,595
7.3%
871,208
78.0%
679,542
50,336,444
7.7%
FY35
225,457
6.3%
1,209,302
78.0%
943,256
69,870,806
6.5%
FY40
291,881
5.3%
1,578,292
78.0%
1,231,068
91,190,212
5.5%
FY44
348,728
4.3%
1,894,083
78.0%
1,477,385
109,435,904
4.4%
CAGR
6.9%
7.8%
8.0%
7.7%
145
Table 7.4
Base case scenario: Indias container traffic forecast
Year
Real GDP
(Constant Prices)
GDP Growth

('000 tonnes)
(%)
('000 tonnes)
Gateway Teu
(Inc. empties)
Annual Growth
FY09
33,394
6.7%
140,022
75.7%
105,936
7,320,662
0.8%
FY10
35,865
7.4%
150,663
75.7%
113,987
7,920,761
8.2%
FY11
38,878
8.4%
172,838
75.7%
130,764
9,018,239
13.9%
FY12
42,155
8.4%
191,045
75.9%
145,003
10,000,192
10.9%
FY13
45,540
8.0%
209,851
76.0%
159,487
10,999,088
10.0%
FY14
49,223
8.1%
230,310
76.0%
175,035
12,071,396
9.7%
FY15
53,208
8.1%
252,444
76.3%
192,615
13,283,799
10.0%
FY16
57,507
8.1%
276,324
76.3%
210,835
14,540,349
9.5%
FY17
62,107
8.0%
301,880
76.3%
230,334
15,885,136
9.2%
FY18
67,000
7.9%
329,063
76.3%
251,075
17,315,539
9.0%
FY19
72,212
7.8%
358,016
76.5%
273,882
18,888,441
9.1%
FY20
77,758
7.7%
388,820
76.5%
297,447
20,513,615
8.6%
FY21
83,651
7.6%
421,558
76.9%
324,178
22,357,089
9.0%
FY22
89,907
7.5%
456,312
76.9%
350,904
24,200,246
8.2%
FY23
96,541
7.4%
493,165
77.0%
379,737
26,188,776
8.2%
FY24
103,569
7.3%
532,202
77.0%
409,796
28,261,769
7.9%
FY25
111,004
7.2%
573,505
77.0%
441,599
30,455,103
7.8%
FY30
155,681
7.0%
821,692
77.0%
632,703
43,634,665
7.4%
FY35
210,261
6.0%
1,124,885
77.0%
866,162
59,735,284
6.2%
FY40
268,352
5.0%
1,447,586
77.0%
1,114,641
76,871,813
5.2%
FY44
316,952
4.0%
1,717,565
77.0%
1,322,525
91,208,644
4.1%
CAGR
6.6%
7.5%
7.5%
7.4%
146
Table 7.5
Low case scenario: Indias container traffic forecast
Year
Real GDP
(Constant Prices)
GDP Growth

('000 tonnes)
(%)
('000 tonnes)
Gateway Teu
(Inc. empties)
Annual Growth
FY09
33,394
6.7%
140,022
75.7%
105,936
7,320,662
0.8%
FY10
35,865
7.4%
150,663
75.7%
113,987
7,920,761
8.2%
FY11
38,806
8.2%
172,440
75.7%
130,463
8,997,448
13.6%
FY12
42,000
8.2%
190,181
75.9%
144,348
9,955,009
10.6%
FY13
45,289
7.8%
208,452
76.0%
158,423
10,925,754
9.8%
FY14
48,860
7.9%
228,294
76.0%
173,504
11,965,759
9.5%
FY15
52,718
7.9%
249,723
76.3%
190,539
13,140,594
9.8%
FY16
56,872
7.9%
272,797
76.3%
208,144
14,354,755
9.2%
FY17
61,308
7.8%
297,439
76.3%
226,946
15,651,446
9.0%
FY18
66,015
7.7%
323,591
76.3%
246,900
17,027,595
8.8%
FY19
71,019
7.6%
351,385
76.5%
268,810
18,538,588
8.9%
FY20
76,330
7.5%
380,891
76.5%
291,381
20,095,269
8.4%
FY21
81,963
7.4%
412,179
76.9%
316,966
21,859,709
8.8%
FY22
87,929
7.3%
445,321
76.9%
342,452
23,617,372
8.0%
FY23
94,241
7.2%
480,387
77.0%
369,898
25,510,202
8.0%
FY24
100,912
7.1%
517,447
77.0%
398,434
27,478,200
7.7%
FY25
107,955
7.0%
556,569
77.0%
428,558
29,555,745
7.6%
FY30
149,996
6.8%
790,108
77.0%
608,383
41,957,464
7.2%
FY35
200,681
5.8%
1,071,671
77.0%
825,187
56,909,451
6.0%
FY40
253,696
4.8%
1,366,171
77.0%
1,051,952
72,548,414
5.0%
FY44
297,349
3.8%
1,608,669
77.0%
1,238,675
85,425,872
3.9%
CAGR
6.4%
7.3%
7.2%
7.2%
147
7.3
Share of North West coast regions in Indias forecasted traffic

The Northern and Western states of India are essentially served by the ports located on
the West coast of India. At present major container handling facilities serving this
hinterland are ports in Maharashtra (Mumbai and JNPT) and in Gujarat (Pipavav, Kandla
and Mundra). The Northern and Western States, such as Uttar Pradesh, Rajasthan, Delhi,
Punjab, Haryana, Madhya Pradesh, Gujarat and Maharashtra are highly industrialised and
also have a significant share of Indian agriculture output.
Ports on the upper west coast (Gujarat) and in the Greater Mumbai region share a very
large common secondary Northern hinterland, which accounts for almost 52% of the traffic
handled in these two regions. Therefore, future traffic growth factors and market dynamics
in these two regions are quite similar. The combined hinterland of the ports in these
regions can be termed as North & North West (N&NW) hinterland. During the last decade,
share of N&NW region within Indias total container traffic has hovered around 67%. The
apportionment of future container traffic that could be handled by various gateway ports in
the upper west coast and the Greater Mumbai region from these ports in the coming years
is largely dependent on the following.
Main factors that would assist in the growth of traffic volumes from ports in the
N & NW region
Large Population & industrial base

Northern States, which have the largest share in the hinterland traffic, are likely to
dominate future trade also due to large population and agricultural/industrial base in states
like Punjab, Haryana, Delhi, Uttar Pradesh and Rajasthan.
High share of NW India in major export commodities
Readymade garments, Textile, Handicrafts, Leather products, Auto components, Electrical
and electronic products, Engineering goods, Processed and packaged food and Agri
exports are the major export commodities moving in containers from India and Northern
States have a major share in the production of these commodities. Some of the leading
production centres are Delhi, Karnal, Ludhiana, Kanpur, Agra, Moradabad, Jaipur, Kota,
Pune, Aurangabad, Surat, Vapi and Mumbai.
Proposed SEZ
Proposed development of large SEZs in Haryana, Gujarat and Mumbai region is likely to
provide boost to industrial development in the region and in the immediate hinterland of
ports in Gujarat and Mumbai.
Maharashtra
Maharashtra State is highly industrialised and has a strong agricultural base too.
Therefore, it alone contributes 19.28% share of JNPT and Mumbai container traffic.
Maharashtra is likely to maintain its share in the future N&NW traffic too.
New capacity projects
New additional container handling capacity in the region would result in a higher
penetration of container in the break bulk cargo segment thus helping in the growth of
148
container trade. Further, development of new ports in Gujarat would provide new gateways
for hinterland traffic thus reducing pressure on existing infrastructure at JNP and Mumbai.
New rail-road connectivity projects
The hinterland connectivity of ports in the N&NW region is currently being upgraded. Ports
in this region will be able to provide good connectivity by road/rail and this would assist in
the movement of containers from large secondary hinterland. One of the major projects
which are most likely to increase container handling capacity in the region is the Dedicated
Freight Corridor project. This project is most likely to decrease inland haulage and transit
time for containers originating from the northern hinterland of India.
Delhi Mumbai Industrial Corridor
With a view to optimize on the enhanced connectivity being offered for freight movement,
Government of India has further proposed Delhi Mumbai Industrial Corridor (DMIC) along
the alignment of Western Dedicated Freight Corridor (DFC) between Delhi and Mumbai.
The proposed high-speed connectivity between Delhi and Mumbai offers immense
opportunities for development of an Industrial corridor along the alignment of the
connecting infrastructure. A band of 150 km (the influence region) has been chosen on
both sides of the freight corridor to be developed as the Industrial Corridor. The vision for
DMIC is to create strong economic base in this band with globally competitive environment
and state-of-the-art infrastructure to activate local commerce, enhance foreign investments
and attain sustainable development. In addition to the influence region, DMIC would also
include development of requisite feeder rail/road connectivity to hinterland/markets and
select ports along the western coast.
Impact of Far Eastern trade dominance
Almost 46% of the total far eastern volumes (export & import included) are handled at the
North Western coast of India. The lower east coast ports which constitute Chennai &
Tuticorin handle around 40% of the Far Eastern container trade from India, approximately
8% by upper east coast ports of Kolkata & Haldia and rest by other ports in India. This is
the largest trade in India which is also growing at a considerable pace. Thus, North
Western coast ports which maintain a large market share in these trades might maintain
their overall market share in future too.
Recently, a separate strategy has been proposed to convert the east coast of India as the
proposed hub of Far Eastern trade volumes. The idea is to drop/pick far eastern container
volumes from these hubs which are later shifted to northern hinterland by rail or road. The
shipping lines in such a scenario would save around 1,000 nautical miles in distance
traveled and around 3 days of transit time. However, due to various market dynamics, this
concept has failed to become a realistic scenario.
Some of the major bottlenecks in implementing this idea are as follows:
This is a highly import dominated trade with imports accounting for over 70% of the
container traffic on this trade. Thus the ships which are calling at the eastern coast ports
do not have sufficient return cargo to justify the port call. Currently, vessels serving the Far
East Middle East trade, call South Asian ports in the return leg of their voyage. In such
149
rotations they call Western India coast ports loading containers for Far East destination as
well as other trades which require transshipment from Colombo, Singapore or Tanjung
Pelepas.
Existing and upcoming ports on the east coast of India for proposed inland connectivity to
northern hinterland resulting in higher costs compared to benefits.
The upper east coasts like Visakhapatnam & western coast port like JNPT are equidistant
from northern hinterland. However, unlike the western coast port like JNPT, Mundra or
Pipavav, the central east coast ports do not have a strong hinterland. Thus, these ports
would primarily depend upon far eastern trade import volumes to northern hinterland while
it would not have any export traffic in return. Recently, Boxtrans started train services from
Delhi to Visakhapatnam to cater to the far eastern trade volumes. The company couldnt
sustain the high cost of inland haulage to transfer container between Visakhapatnam and
Delhi. This was primarily due to the reason that there was low potential of export boxes
from Delhi to Vizag and it only carried empties from Delhi to Visakhapatnam port in the
return leg.
Ocean freight rates from West India coasts are equal or cheaper to Far East
destinations/origins.
Threats to the development of traffic at N&NW ports
As discussed earlier port connectivity with the hinterland is a major determinant in the
volumes that are handled by the port. Therefore, if the proposed projects for overcoming
the current logistics bottlenecks are delayed then it could impede the expected growth in
container traffic in the region.
Development of new container handling facilities is expected to result in realignment of

traffic. Currently, there is a small volume of traffic that is generated in Southern and
Central India and is moving to ports on the West coast especially to JNPT. With the
improvement of facilities in the South, this traffic is likely to realign to their respective
nearest gateway ports.
Delay in implementation of new container handling facilities could lead to congestion

and add to the overall shipping and logistics costs.
Drewry is of the view that N&NW hinterland will maintain its dominance in Indian
container traffic. However, considering the changing trade dynamics and
developments in Southern states, the share of N&NW hinterland could decline from
the present levels of around 67.6% to around 60.0% over the forecast period.
As per Drewry, the most likely scenario to occur is the base case, wherein the North
Western India container traffic is estimated to grow at a CAGR of 7.1%. The total
traffic is estimated to grow from 5.0m teu in FY09 to 54.0m teu in FY44.
150
Table 7.6
Growth of gateway container traffic in North West coast of India High case
Year
Total Indian Gateway Share of

Traffic (teu)
NW
Share of Upper Share of Greater Traffic of NW

West Coast
Mumbai
(Teu)
Annual
Growth Rate
Traffic of Upper
West Coast
Annual
Growth Rate
Traffic of Greater
Mumbai
Annual
Growth Rate
-0.1%
1,096,379
2.3%
3,819,234
-0.8%
FY09
7,320,662
67.1%
22.3%
77.7%
4,915,613
FY10
7,920,761
67.6%
27.0%
73.0%
5,352,635
8.9%
1,446,857
32.0%
3,905,779
2.3%
FY11
9,049,425
67.4%
25.0%
75.0%
6,099,313
13.9%
1,524,828
5.4%
4,574,485
17.1%
FY12
10,068,124
67.3%
26.5%
73.5%
6,775,848
11.1%
1,795,600
17.8%
4,980,248
8.9%
FY13
11,264,977
67.2%
28.0%
72.0%
7,570,064
11.7%
2,119,618
18.0%
5,450,446
9.4%
FY14
12,489,354
67.0%
29.0%
71.0%
8,367,867
10.5%
2,426,682
14.5%
5,941,186
9.0%
FY15
13,883,595
66.8%
30.0%
70.0%
9,274,242
10.8%
2,782,272
14.7%
6,491,969
9.3%
FY16
15,351,332
66.5%
31.0%
69.0%
10,208,636
10.1%
3,164,677
13.7%
7,043,959
8.5%
FY17
16,941,599
65.7%
32.0%
68.0%
11,130,630
9.0%
3,561,802
12.5%
7,568,829
7.5%
FY18
18,655,096
65.5%
33.0%
67.0%
12,219,088
9.8%
4,032,299
13.2%
8,186,789
8.2%
FY19
20,557,214
65.5%
34.0%
66.0%
13,464,975
10.2%
4,578,092
13.5%
8,886,884
8.6%
FY20
22,554,263
65.5%
35.0%
65.0%
14,773,042
9.7%
5,170,565
12.9%
9,602,477
8.1%
FY21
25,188,502
65.4%
36.0%
64.0%
16,473,280
11.5%
5,930,381
14.7%
10,542,899
9.8%
FY22
27,341,761
65.3%
37.0%
63.0%
17,854,170
8.4%
6,606,043
11.4%
11,248,127
6.7%
FY23
29,632,689
65.2%
38.0%
62.0%
19,320,513
8.2%
7,341,795
11.1%
11,978,718
6.5%
FY24
32,067,413
65.1%
39.0%
61.0%
20,875,886
8.1%
8,141,595
10.9%
12,734,290
6.3%
FY25
34,652,105
65.0%
40.0%
60.0%
22,523,868
7.9%
9,009,547
10.7%
13,514,321
6.1%
FY30
50,336,444
60.0%
45.0%
55.0%
30,201,866
5.9%
13,590,840
8.3%
16,611,026
4.0%
FY35
69,870,806
60.0%
45.0%
55.0%
41,922,484
6.5%
18,865,118
6.5%
23,057,366
6.5%
FY40
91,190,212
60.0%
45.0%
55.0%
54,714,127
5.5%
24,621,357
5.5%
30,092,770
5.5%
FY44
109,435,904
60.0%
45.0%
55.0%
65,661,542
4.4%
29,547,694
4.4%
36,113,848
4.4%
CAGR
8.0%
7.7%
9.3%
6.8%
151
Table 7.7
Growth of container traffic in North West coast of India coast of India Base case
Year

Traffic (teu)
NW

West Coast
Mumbai
(Teu)
Annual
Growth Rate
Traffic of Upper
West Coast
Annual
Growth Rate
Traffic of Greater
Mumbai
Annual
Growth Rate
-0.1%
1,096,379
2.3%
3,819,234
-0.8%
FY09
7,320,662
67.1%
22.3%
77.7%
4,915,613
FY10
7,920,761
67.6%
27.0%
73.0%
5,352,635
8.9%
1,446,857
32.0%
3,905,779
2.3%
FY11
9,018,239
67.4%
25.0%
75.0%
6,078,293
13.6%
1,519,573
5.0%
4,558,720
16.7%
FY12
10,000,192
67.3%
26.5%
73.5%
6,730,129
10.7%
1,783,484
17.4%
4,946,645
8.5%
FY13
10,999,088
67.2%
28.0%
72.0%
7,391,387
9.8%
2,069,588
16.0%
5,321,799
7.6%
FY14
12,071,396
67.0%
29.0%
71.0%
8,087,835
9.4%
2,345,472
13.3%
5,742,363
7.9%
FY15
13,283,799
66.8%
30.0%
70.0%
8,873,577
9.7%
2,662,073
13.5%
6,211,504
8.2%
FY16
14,540,349
66.5%
31.0%
69.0%
9,669,332
9.0%
2,997,493
12.6%
6,671,839
7.4%
FY17
15,885,136
65.7%
32.0%
68.0%
10,436,535
7.9%
3,339,691
11.4%
7,096,843
6.4%
FY18
17,315,539
65.5%
33.0%
67.0%
11,341,678
8.7%
3,742,754
12.1%
7,598,924
7.1%
FY19
18,888,441
65.5%
34.0%
66.0%
12,371,929
9.1%
4,206,456
12.4%
8,165,473
7.5%
FY20
20,513,615
65.5%
35.0%
65.0%
13,436,418
8.6%
4,702,746
11.8%
8,733,672
7.0%
FY21
22,357,089
65.4%
36.0%
64.0%
14,621,536
8.8%
5,263,753
11.9%
9,357,783
7.1%
FY22
24,200,246
65.3%
37.0%
63.0%
15,802,761
8.1%
5,847,021
11.1%
9,955,739
6.4%
FY23
26,188,776
65.2%
38.0%
62.0%
17,075,082
8.1%
6,488,531
11.0%
10,586,551
6.3%
FY24
28,261,769
65.1%
39.0%
61.0%
18,398,412
7.8%
7,175,381
10.6%
11,223,031
6.0%
FY25
30,455,103
65.0%
40.0%
60.0%
19,795,817
7.6%
7,918,327
10.4%
11,877,490
5.8%
FY30
43,634,665
60.0%
45.0%
55.0%
26,180,799
5.6%
11,781,360
8.0%
14,399,440
3.7%
FY35
59,735,284
60.0%
45.0%
55.0%
35,841,170
6.2%
16,128,527
6.2%
19,712,644
6.2%
FY40
76,871,813
60.0%
45.0%
55.0%
46,123,088
5.2%
20,755,390
5.2%
25,367,698
5.2%
FY44
91,208,644
60.0%
45.0%
55.0%
54,725,186
4.1%
24,626,334
4.1%
30,098,853
4.1%
CAGR
7.5%
7.1%
8.7%
6.2%
152
Table 7.8
Growth of container traffic in North West coast of India coast of India Low case
Year

Traffic (teu)
NW

West Coast
Mumbai
(Teu)
Annual
Growth Rate
Traffic of Upper
West Coast
Annual
Growth Rate
Traffic of Greater
Mumbai
Annual
Growth Rate
-0.1%
1,096,379
2.3%
3,819,234
-0.8%
FY09
7,320,662
67.1%
22.3%
77.7%
4,915,613
FY10
7,920,761
67.6%
27.0%
73.0%
5,352,635
8.9%
1,446,857
32.0%
3,905,779
2.3%
FY11
8,997,448
67.4%
25.0%
75.0%
6,064,280
13.3%
1,516,070
4.8%
4,548,210
16.4%
FY12
9,955,009
67.3%
26.5%
73.5%
6,699,721
10.5%
1,775,426
17.1%
4,924,295
8.3%
FY13
10,925,754
67.2%
28.0%
72.0%
7,342,106
9.6%
2,055,790
15.8%
5,286,317
7.4%
FY14
11,965,759
67.0%
29.0%
71.0%
8,017,058
9.2%
2,324,947
13.1%
5,692,111
7.7%
FY15
13,140,594
66.8%
30.0%
70.0%
8,777,917
9.5%
2,633,375
13.3%
6,144,542
7.9%
FY16
14,354,755
66.5%
31.0%
69.0%
9,545,912
8.7%
2,959,233
12.4%
6,586,679
7.2%
FY17
15,651,446
65.7%
32.0%
68.0%
10,283,000
7.7%
3,290,560
11.2%
6,992,440
6.2%
FY18
17,027,595
65.5%
33.0%
67.0%
11,153,075
8.5%
3,680,515
11.9%
7,472,560
6.9%
FY19
18,538,588
65.5%
34.0%
66.0%
12,142,775
8.9%
4,128,544
12.2%
8,014,232
7.2%
FY20
20,095,269
65.5%
35.0%
65.0%
13,162,401
8.4%
4,606,841
11.6%
8,555,561
6.8%
FY21
21,859,709
65.4%
36.0%
64.0%
14,296,250
8.6%
5,146,650
11.7%
9,149,600
6.9%
FY22
23,617,372
65.3%
37.0%
63.0%
15,422,144
7.9%
5,706,193
10.9%
9,715,951
6.2%
FY23
25,510,202
65.2%
38.0%
62.0%
16,632,652
7.8%
6,320,408
10.8%
10,312,244
6.1%
FY24
27,478,200
65.1%
39.0%
61.0%
17,888,308
7.5%
6,976,440
10.4%
10,911,868
5.8%
FY25
29,555,745
65.0%
40.0%
60.0%
19,211,234
7.4%
7,684,494
10.1%
11,526,740
5.6%
FY30
41,957,464
60.0%
45.0%
55.0%
25,174,478
5.4%
11,328,515
7.8%
13,845,963
3.5%
FY35
56,909,451
60.0%
45.0%
55.0%
34,145,671
6.0%
15,365,552
6.0%
18,780,119
6.0%
FY40
72,548,414
60.0%
45.0%
55.0%
43,529,048
5.0%
19,588,072
5.0%
23,940,977
5.0%
FY44
85,425,872
60.0%
45.0%
55.0%
51,255,523
3.9%
23,064,985
3.9%
28,190,538
3.9%
CAGR
7.2%
6.9%
8.5%
6.0%
153
7.4
Share of Lower West & East coast regions in Indias forecasted traffic
Ports on the Lower West Coast (LWC) and in the Lower East Coast (LEC) region share
hinterland spread amongst the southern states of India. These states contribute around
25% of the total container traffic generated in India. This region is witnessing a lot of
activity in the maritime and industrial growth sector. There have been several new port
projects which have been announced or commissioned particularly on the Lower East
Coast of India along with massive investments in the manufacturing sector.
The southern states of India are essentially served by ports located on the lower coast of
India. At present major container handling facilities serving this hinterland are ports in
Tamil Nadu (Chennai & Tuticorin) and in Kerala (Cochin). Amongst the southern states of
India in order of industrialisation Tamil Nadu leads all the states followed by Andhra
Pradesh, Karnataka and Kerala in descending order. These states also contribute heavily
through their agricultural output.
Mormugao port has been included amongst the ports in lower west coast region. However,
the extent of industrialisation and containerisation potential for the state of Goa is limited
compared to other ports in the cluster. New Mangalore port, one of the three ports in the
lower west coast port clusters has taken rapid strides in increasing its container throughput
recently. However, it suffers from low industrial investment and major productions centres
in its immediate hinterland. This has reduced the port attractiveness of this facility wherein
shippers prefer other facilities.
Development of the Vallarpadam terminal and the proposed Vizhinjam port are two of the
significant infrastructure development to cater to container trade in the Lower West coast
region. These new facilities could significantly impact the overall direction and dynamics of
the container trade in the region.
However these two ports have a major drawback in terms of limited primary hinterland
which is the state of Kerala. Vizhinjam in particular lies in the southern most tip of Kerala
which is neither closer to major cargo generating areas of Tamil Nadu nor Kerala.
However, some of the cargo centres in the southern Kerala like Kollam,
Tiruvananthapuram and Allapuzha contribute around 40% of the overall container traffic
generated in the state. The proximity of this port to these cargo centres could be an
incentive to attract container traffic from these regions however much depends on the
infrastructure facilities like availability of CFSs, CHA, warehouses, trailers are competitive
prices, range of services at the port, etc, in order to attract this hinterland traffic.
Drewry estimates that if developed the Vizhinjam port could attract transhipment traffic due
to its proximity to the main Asia-Eur trade lane, though volumes might be limited due to
competition. The proposed port is located ideally with negligible deviation from Colombo
and main shipping route. Such mainline calls at the port could attract traffic not only from
its immediate hinterland but also from distant cargo centres. However, the above
mentioned factors are very significant in terms of attracting shipping lines and cargo
owners to the port.
Traffic share distribution between Lower East coast and Lower West coast ports
Drewry has forecast combined traffic of the LEC & LWC coast ports as they share a
common hinterland which includes cargo centres in Karnataka, Andhra Pradesh, Tamil
Nadu & Kerala. Historically, ports on the LEC namely Chennai & Tuticorin have performed
154
much better compared to the ports on the LWC region. This is primarily because the major
cargo centres having large volumes of container traffic are situated in the immediate
hinterland of the LEC ports, particularly in Southern Andhra Pradesh, Tamil Nadu and
eastern Karnataka.
On the other hand, ports in the LWC have relatively sparse hinterland with paucity of
industrial development in their vicinity, particularly Kerala. Several issues like labour
problems, low industrial growth, poor road and rail connectivity have resulted in lower
traffic growth at these ports. The commodity profile of most of these ports are dominated
by agricultural commodities which have low growth rate and typically ship from the nearest
available port due to sensitivity to cost of transportation.
Inspire of proposed development of the Vallarpadam terminal and proposed Vizhinjam port
the LEC coast may not witness high hinterland volumes primarily due to the reasons
discussed above. Although, these facilities may in themselves be world class facilities
however stiff competition from other ports in the region coupled with low cargo in the
immediate hinterland is likely to cause slow gateway traffic growth in these regions.
The new container handling facility at Cochin, the Vallarpadam terminal, is planning to
attract cargoes from secondary hinterland like Bangalore & Coimbatore which have
traditionally shipped through Chennai &Tuticorin respectively. In spite of Cochin port being
closer to these cargo centres vis--vis competing ports in Tamil Nadu, the shippers have
continued to ship their cargo through their traditional ports.
Therefore, Drewry estimates that with the inception of the Vallarpadam terminal, the
Cochin port may be able to attract limited traffic from these cargo centres in the short run.
However in the long run with the development of new terminals at Chennai, Ennore,
Krishnapatnam and probably Karaikal coupled with high concentration of industrial facility
which contribute significantly to the container traffic in the Southern states, the shipping
lines would continue to provide wider range of services at the LEC ports as compared to
the LWC ports. Therefore, LEC ports might witness an increase in their share in total traffic
in the short run however in the longer run the LEC ports may consolidate their position as
the preferred gateway ports for South India.
lower east & west coast region
New investment in augmenting/developing container handling capacity. Additional

container handling capacity would result in a higher penetration of container in the
break bulk cargo segment thus helping in the growth of container trade.
New investments are primarily taking place in the state of Tamil Nadu and in the
immediate hinterland of existing Chennai port. The likely increase in container traffic
due to increase in manufacturing activities and export oriented units in the region
would most probably benefit Chennai and upcoming Ennore port.
Chennai region has a high concentration of various allied infrastructure required for
container traffic development in any area. This region benefits from existence of
various CFS, CHAs, forwarders and warehouses which are further augmenting their
capacity to handle the increasing traffic from the region.
155
Proposed port based SEZs are likely to provide boost to industrial development in the
region and the immediate hinterland cargo contribution.
The hinterland connectivity of ports in the region is currently being upgraded. Ports in
this region will be able to provide good connectivity by road and rail. This would assist
in the movement of containers from the large secondary hinterland.
Several auto companies which have export focus like Hyundai, Renault and Nissan
have shifted manufacturing base in the immediate hinterland of the Chennai port.
Such industries lead to development of several smaller firms providing raw material
and other finished products to such companies and in turn lead to higher container
traffic.
The development of container handling facility at Cochin port by DPW is most likely to
increase container traffic in the short run in the lower west coast of India.
Mainline vessel calls at Kerala ports could attract traffic from their secondary
hinterland cargo centres like Bangaluru, Coimbatore & Tirupur.
Threats to the development of traffic at Lower east & west coast ports
Delay in implementation of the proposed and planned projects for overcoming the
current logistics bottlenecks at Chennai and Ennore port. The increasing bottlenecks
might force some companies to shift manufacturing base at other locations.
Competition from JNPT and other ports in the North West region.
High cost of developing infrastructure for the Vizhinjam port.
Poor road/rail connectivity in the state of Kerala.
As per Drewry, the likely scenario is the base case, wherein the Lower East & West Coast
of India gateway container traffic is estimated to grow at a CAGR of 8.3%. The total traffic
is estimated to grow from 1.8m teu in FY09 to 34.2m teu in FY44.
156
Table 7.9
Growth of container traffic in Lower West & East Coast of India High case
Year
Total Indian Gateway

Traffic (teu)
Share of
LW&LEC
Share of
LWC
Share of
LEC
Traffic of
LW&EC
FY09
7,320,662
25.8%
16.1%
83.9%
1,885,142
FY10
7,920,761
24.8%
16.1%
83.9%
1,966,125
4.3%
316,546
4.4%
1,649,579
4.3%
FY11
9,049,425
25.4%
16.5%
83.5%
2,298,554
16.9%
379,261
19.8%
1,919,293
16.4%
FY12
10,068,124
25.3%
16.8%
83.2%
2,547,235
10.8%
427,936
12.8%
2,119,300
10.4%
FY13
11,264,977
25.3%
17.0%
83.0%
2,850,039
11.9%
484,507
13.2%
2,365,532
11.6%
FY14
12,489,354
25.4%
17.2%
82.8%
3,172,296
11.3%
545,635
12.6%
2,626,661
11.0%
FY15
13,883,595
25.5%
17.5%
82.5%
3,540,317
11.6%
619,555
13.5%
2,920,761
11.2%
FY16
15,351,332
25.7%
17.8%
82.2%
3,945,292
11.4%
702,262
13.3%
3,243,030
11.0%
FY17
16,941,599
26.4%
18.0%
82.0%
4,472,582
13.4%
805,065
14.6%
3,667,517
13.1%
FY18
18,655,096
26.5%
19.0%
81.0%
4,943,600
10.5%
939,284
16.7%
4,004,316
9.2%
FY19
20,557,214
26.5%
19.5%
80.5%
5,447,662
10.2%
1,062,294
13.1%
4,385,368
9.5%
FY20
22,554,263
26.5%
20.0%
80.0%
5,976,880
9.7%
1,195,376
12.5%
4,781,504
9.0%
FY21
25,188,502
26.6%
20.0%
80.0%
6,700,141
12.1%
1,340,028
12.1%
5,360,113
12.1%
FY22
27,341,761
26.7%
20.0%
80.0%
7,300,250
9.0%
1,460,050
9.0%
5,840,200
9.0%
FY23
29,632,689
26.8%
20.0%
80.0%
7,941,561
8.8%
1,588,312
8.8%
6,353,249
8.8%
FY24
32,067,413
26.9%
20.0%
80.0%
8,626,134
8.6%
1,725,227
8.6%
6,900,907
8.6%
FY25
34,652,105
27.0%
19.0%
81.0%
9,356,068
8.5%
1,777,653
3.0%
7,578,415
9.8%
FY30
50,336,444
32.0%
15.0%
85.0%
16,107,662
11.1%
2,416,149
11.1%
13,691,513
11.1%
FY35
69,870,806
32.0%
12.0%
88.0%
22,358,658
6.5%
2,683,039
6.5%
19,675,619
6.5%
FY40
91,190,212
32.0%
12.0%
88.0%
29,180,868
5.5%
3,501,704
5.5%
25,679,164
5.5%
FY44
109,435,904
32.0%
12.0%
88.0%
35,019,489
4.4%
4,202,339
4.4%
30,817,150
4.4%
CAGR
8.0%
8.8%
Annual Growth Traffic of LWC Annual Growth

Rate
(teu)
Rate
2.3%
303,221
7.9%
6.3%
Gateway Traffic of
LEC (teu)
Annual Growth
Rate
1,581,921
1.6%
9.0%
157
Table 7.10
Growth of container traffic in Lower West & East Coast of India coast of India Base case
Share of
Share of
Share of
Traffic of
Traffic (teu)
LW&LEC
LWC
LEC
LW&EC
Rate
(teu)
Rate
LEC (teu)
Rate
FY09
7,320,662
25.8%
16.1%
83.9%
1,885,142
2.3%
303,221
6.3%
1,581,921
1.6%
FY10
7,920,761
24.8%
16.1%
83.9%
1,966,125
4.3%
316,546
4.4%
1,649,579
4.3%
FY11
9,018,239
25.4%
16.5%
83.5%
2,290,633
16.5%
377,954
19.4%
1,912,678
15.9%
FY12
10,000,192
25.3%
16.8%
83.2%
2,530,049
10.5%
425,048
12.5%
2,105,000
10.1%
FY13
10,999,088
25.3%
17.0%
83.0%
2,782,769
10.0%
473,071
11.3%
2,309,698
9.7%
FY14
12,071,396
25.4%
17.2%
82.8%
3,066,135
10.2%
527,375
11.5%
2,538,759
9.9%
FY15
13,283,799
25.5%
17.5%
82.5%
3,387,369
10.5%
592,790
12.4%
2,794,579
10.1%
FY16
14,540,349
25.7%
17.8%
82.2%
3,736,870
10.3%
665,163
12.2%
3,071,707
9.9%
FY17
15,885,136
26.4%
18.0%
82.0%
4,193,676
12.2%
754,862
13.5%
3,438,814
12.0%
FY18
17,315,539
26.5%
19.0%
81.0%
4,588,618
9.4%
871,837
15.5%
3,716,781
8.1%
FY19
18,888,441
26.5%
19.5%
80.5%
5,005,437
9.1%
976,060
12.0%
4,029,377
8.4%
FY20
20,513,615
26.5%
20.0%
80.0%
5,436,108
8.6%
1,087,222
11.4%
4,348,886
7.9%
FY21
22,357,089
26.6%
20.0%
80.0%
5,946,986
9.4%
1,189,397
9.4%
4,757,589
9.4%
FY22
24,200,246
26.7%
20.0%
80.0%
6,461,466
8.7%
1,292,293
8.7%
5,169,173
8.7%
FY23
26,188,776
26.8%
20.0%
80.0%
7,018,592
8.6%
1,403,718
8.6%
5,614,874
8.6%
FY24
28,261,769
26.9%
20.0%
80.0%
7,602,416
8.3%
1,520,483
8.3%
6,081,933
8.3%
FY25
30,455,103
27.0%
19.0%
81.0%
8,222,878
8.2%
1,562,347
2.8%
6,660,531
9.5%
Year
Gateway Traffic of
Annual Growth
FY30
43,634,665
32.0%
15.0%
85.0%
13,963,093
10.8%
2,094,464
10.8%
11,868,629
10.8%
FY35
59,735,284
32.0%
12.0%
88.0%
19,115,291
6.2%
2,293,835
6.2%
16,821,456
6.2%
FY40
76,871,813
32.0%
12.0%
88.0%
24,598,980
5.2%
2,951,878
5.2%
21,647,103
5.2%
FY44
91,208,644
32.0%
12.0%
88.0%
29,186,766
4.1%
3,502,412
4.1%
25,684,354
4.1%
CAGR
7.5%
8.3%
7.3%
8.4%
158
Table 7.11
Growth of container traffic in Lower West & East Coast of India coast of India Low case
Year

Traffic (teu)
Share of
LW&LEC
Share of
LWC
Share of
LEC
Traffic of
LW&EC
FY09
7,320,662
25.8%
16.1%
83.9%
1,885,142
2.3%
303,221
FY10
7,920,761
24.8%
16.1%
83.9%
1,966,125
4.3%
316,546
FY11
8,997,448
25.4%
16.5%
83.5%
2,285,352
16.2%
FY12
9,955,009
25.3%
16.8%
83.2%
2,518,617
10.2%
FY13
10,925,754
25.3%
17.0%
83.0%
2,764,216
9.8%
469,917
11.1%
2,294,299
9.5%
FY14
11,965,759
25.4%
17.2%
82.8%
3,039,303
10.0%
522,760
11.2%
2,516,543
9.7%
FY15
13,140,594
25.5%
17.5%
82.5%
3,350,852
10.3%
586,399
12.2%
2,764,453
9.9%
FY16
14,354,755
25.7%
17.8%
82.2%
3,689,172
10.1%
656,673
12.0%
3,032,499
9.7%
FY17
15,651,446
26.4%
18.0%
82.0%
4,131,982
12.0%
743,757
13.3%
3,388,225
11.7%
FY18
17,027,595
26.5%
19.0%
81.0%
4,512,313
9.2%
857,339
15.3%
3,654,973
7.9%
FY19
18,538,588
26.5%
19.5%
80.5%
4,912,726
8.9%
957,982
11.7%
3,954,744
8.2%
FY20
20,095,269
26.5%
20.0%
80.0%
5,325,246
8.4%
1,065,049
11.2%
4,260,197
7.7%
FY21
21,859,709
26.6%
20.0%
80.0%
5,814,683
9.2%
1,162,937
9.2%
4,651,746
9.2%
FY22
23,617,372
26.7%
20.0%
80.0%
6,305,838
8.4%
1,261,168
8.4%
5,044,671
8.4%
FY23
25,510,202
26.8%
20.0%
80.0%
6,836,734
8.4%
1,367,347
8.4%
5,469,387
8.4%
FY24
27,478,200
26.9%
20.0%
80.0%
7,391,636
8.1%
1,478,327
8.1%
5,913,309
8.1%
FY25
29,555,745
27.0%
19.0%
81.0%
7,980,051
8.0%
1,516,210
2.6%
6,463,841
9.3%
FY30
41,957,464
32.0%
15.0%
85.0%
13,426,388
10.6%
2,013,958
10.6%
11,412,430
10.6%
FY35
56,909,451
32.0%
12.0%
88.0%
18,211,024
6.0%
2,185,323
6.0%
16,025,701
6.0%
FY40
72,548,414
32.0%
12.0%
88.0%
23,215,492
5.0%
2,785,859
5.0%
20,429,633
5.0%
FY44
85,425,872
32.0%
12.0%
88.0%
27,336,279
3.9%
3,280,353
3.9%
24,055,926
3.9%
CAGR
7.2%
8.0%

Rate
(teu)
Rate
Gateway Traffic of
LEC (teu)
Annual Growth
Rate
6.3%
1,581,921
1.6%
4.4%
1,649,579
4.3%
377,083
19.1%
1,908,269
15.7%
423,128
12.2%
2,095,490
9.8%
7.1%
8.2%
159
7.5
Share of Central and Upper East coast regions in Indias forecasted

traffic
Ports in the central and upper east coast region primarily serves states of Andhra Pradesh,
Orissa, Jharkhand, Chhattisgarh, West Bengal and North East sates of India.
Kolkata/Haldia also acts as gateway ports for neighbouring countries like Nepal. The
current share of ports in this region is around 7%, which is largely dominated by Kolkata
and Haldia. Other active container port in the region is Visakhapatnam port, handling less
than 0.1m teu. The limited share of these ports in Indias container trade reflects that the
container traffic in the hinterland is quite limited. One of the reasons for this trend is the
industries in the hinterland are largely dependent on bulk imports and exports. Some of the
key industries in the region are steel, aluminium, cement, mining and thermal power. While
major export commodities generated are iron ore, other minor minerals, steel, granite and
agri products, imports largely includes liquid bulk, coal, limestone, steel, food grains,
timber logs.
The container trade in the region is likely to witness a robust growth over the forecast
period. However, the overall share of the region in Indian container trade is unlikely to
change. The major factors expected to contribute to the growth in container trade in the
region are:
central & east coast region
Growth in steel and mining industry in the hinterland.
Development of the new container handling facilities facilitating containerisation in the

hinterland.
Ports in the upper east coast region are likely to maintain a dominant share in the
region. However, development of Dhamra container terminal may result in shift of
container traffic from Kolkata/Haldia ports. Cargo centres in Jharkhand, Orissa and
Chhattisgarh region could move to the proposed deep draft container port at Dhamra.
Further, the limited capacity at Kolkata and Haldia ports would force the users to look
for alternate gateway ports for efficient handling of containers.
Threats to the development of traffic at Central and Lower east coast ports
Delay in implementation of the proposed mega steel plants in the region.
Competition from the ports in the lower east coast like Ennore, Krishnapatnam and
Chennai.
Delay in commissioning of the new proposed container terminals, leading to capacity

constraint in the region.
As per Drewry, the likely scenario is the base case, wherein the Upper & Central East
Coast of India container traffic is estimated to grow at a compound average growth rate of
7.6%. The total traffic is estimated to grow from 0.5m teu in FY09 to 7.3m teu in FY44.
160
Table 7.12
Growth of container traffic in Upper & Central East Coast of India High case
Year
Total Indian gateway

Traffic (teu)
Share of
C&UEC
Share of
CEC
Share of
UEC
Traffic of C&UEC Annual Growth

(teu)
Rate
Traffic of CEC
(teu)
Annual Growth
Rate
Traffic of UEC
(teu)
FY09
7,320,662
7.1%
16.9%
83.1%
519,907
FY10
7,920,761
7.6%
16.3%
83.7%
602,000
FY11
9,049,425
7.2%
17.2%
82.8%
651,559
FY12
10,068,124
7.4%
17.5%
82.5%
745,041
FY13
11,264,977
7.5%
20.0%
80.0%
844,873
FY14
12,489,354
7.6%
22.0%
78.0%
949,191
FY15
13,883,595
7.7%
24.0%
76.0%
FY16
15,351,332
7.8%
26.0%
FY17
16,941,599
7.9%
FY18
18,655,096
FY19
20,557,214
FY20
3.8%
88,124
23.9%
431,783
0.5%
15.8%
98,000
11.2%
504,000
16.7%
8.2%
112,068
14.4%
539,491
7.0%
14.3%
130,382
16.3%
614,659
13.9%
13.4%
168,975
29.6%
675,899
10.0%
12.3%
208,822
23.6%
740,369
9.5%
1,069,037
12.6%
256,569
22.9%
812,468
9.7%
74.0%
1,197,404
12.0%
311,325
21.3%
886,079
9.1%
26.0%
74.0%
1,338,386
11.8%
347,980
11.8%
990,406
11.8%
8.0%
25.0%
75.0%
1,492,408
11.5%
373,102
7.2%
1,119,306
13.0%
8.0%
25.0%
75.0%
1,644,577
10.2%
411,144
10.2%
1,233,433
10.2%
22,554,263
8.0%
25.0%
75.0%
1,804,341
9.7%
451,085
9.7%
1,353,256
9.7%
FY21
25,188,502
8.0%
25.0%
75.0%
2,015,080
11.7%
503,770
11.7%
1,511,310
11.7%
FY22
27,341,761
8.0%
25.0%
75.0%
2,187,341
8.5%
546,835
8.5%
1,640,506
8.5%
FY23
29,632,689
8.0%
25.0%
75.0%
2,370,615
8.4%
592,654
8.4%
1,777,961
8.4%
FY24
32,067,413
8.0%
25.0%
75.0%
2,565,393
8.2%
641,348
8.2%
1,924,045
8.2%
FY25
34,652,105
8.0%
25.0%
75.0%
2,772,168
8.1%
693,042
8.1%
2,079,126
8.1%
FY30
50,336,444
8.0%
25.0%
75.0%
4,026,916
7.7%
1,006,729
7.7%
3,020,187
7.7%
FY35
69,870,806
8.0%
25.0%
75.0%
5,589,664
6.5%
1,397,416
6.5%
4,192,248
6.5%
FY40
91,190,212
8.0%
25.0%
75.0%
7,295,217
5.5%
1,823,804
5.5%
5,471,413
5.5%
FY44
109,435,904
8.0%
25.0%
75.0%
8,754,872
4.4%
2,188,718
4.4%
6,566,154
4.4%
CAGR
8.0%
8.2%
9.6%
Annual Growth
Rate
7.8%
161
Table 7.13
Growth of container traffic in Upper & Central East Coast of India coast of India Base case
Year

Traffic (teu)
Share of
C&UEC
Share of
CEC
Share of
UEC

(teu)
Rate
Traffic of CEC
(teu)
Annual Growth
Rate
Traffic of UEC
(teu)
FY09
7,320,662
7.1%
16.9%
83.1%
519,907
FY10
7,920,761
7.6%
16.3%
83.7%
602,000
FY11
9,018,239
7.2%
17.2%
82.8%
649,313
FY12
10,000,192
7.4%
17.5%
82.5%
740,014
FY13
10,999,088
7.5%
20.0%
80.0%
824,932
FY14
12,071,396
7.6%
22.0%
78.0%
917,426
FY15
13,283,799
7.7%
24.0%
76.0%
FY16
14,540,349
7.8%
26.0%
FY17
15,885,136
7.9%
FY18
17,315,539
FY19
18,888,441
FY20
3.8%
88,124
23.9%
431,783
0.5%
15.8%
98,000
11.2%
504,000
16.7%
7.9%
111,682
14.0%
537,631
6.7%
14.0%
129,502
16.0%
610,512
13.6%
11.5%
164,986
27.4%
659,945
8.1%
11.2%
201,834
22.3%
715,592
8.4%
1,022,852
11.5%
245,485
21.6%
777,368
8.6%
74.0%
1,134,147
10.9%
294,878
20.1%
839,269
8.0%
26.0%
74.0%
1,254,926
10.6%
326,281
10.6%
928,645
10.6%
8.0%
25.0%
75.0%
1,385,243
10.4%
346,311
6.1%
1,038,932
11.9%
8.0%
25.0%
75.0%
1,511,075
9.1%
377,769
9.1%
1,133,306
9.1%
20,513,615
8.0%
25.0%
75.0%
1,641,089
8.6%
410,272
8.6%
1,230,817
8.6%
FY21
22,357,089
8.0%
25.0%
75.0%
1,788,567
9.0%
447,142
9.0%
1,341,425
9.0%
FY22
24,200,246
8.0%
25.0%
75.0%
1,936,020
8.2%
484,005
8.2%
1,452,015
8.2%
FY23
26,188,776
8.0%
25.0%
75.0%
2,095,102
8.2%
523,776
8.2%
1,571,327
8.2%
FY24
28,261,769
8.0%
25.0%
75.0%
2,260,942
7.9%
565,235
7.9%
1,695,706
7.9%
FY25
30,455,103
8.0%
25.0%
75.0%
2,436,408
7.8%
609,102
7.8%
1,827,306
7.8%
FY30
43,634,665
8.0%
25.0%
75.0%
3,490,773
7.4%
872,693
7.4%
2,618,080
7.4%
FY35
59,735,284
8.0%
25.0%
75.0%
4,778,823
6.2%
1,194,706
6.2%
3,584,117
6.2%
FY40
76,871,813
8.0%
25.0%
75.0%
6,149,745
5.2%
1,537,436
5.2%
4,612,309
5.2%
FY44
91,208,644
8.0%
25.0%
75.0%
7,296,692
4.1%
1,824,173
4.1%
5,472,519
4.1%
CAGR
7.5%
7.6%
9.0%
Annual Growth
Rate
7.3%
162
Table 7.14
Growth of container traffic in Upper & Central East Coast of India coast of India Low case
Year

Traffic (teu)
Share of
C&UEC
Share of
CEC
Share of
UEC

(teu)
Rate
Traffic of CEC
(teu)
Annual Growth
Rate
Traffic of UEC
(teu)
FY09
7,320,662
7.1%
16.9%
83.1%
519,907
FY10
7,920,761
7.6%
16.3%
83.7%
602,000
FY11
8,997,448
7.2%
17.2%
82.8%
647,816
FY12
9,955,009
7.4%
17.5%
82.5%
736,671
FY13
10,925,754
7.5%
20.0%
80.0%
819,432
FY14
11,965,759
7.6%
22.0%
78.0%
909,398
FY15
13,140,594
7.7%
24.0%
76.0%
FY16
14,354,755
7.8%
26.0%
FY17
15,651,446
7.9%
FY18
17,027,595
FY19
18,538,588
FY20
3.8%
88,124
23.9%
431,783
0.5%
15.8%
98,000
11.2%
504,000
16.7%
7.6%
111,424
13.7%
536,392
6.4%
13.7%
128,917
15.7%
607,753
13.3%
11.2%
163,886
27.1%
655,545
7.9%
11.0%
200,067
22.1%
709,330
8.2%
1,011,826
11.3%
242,838
21.4%
768,988
8.4%
74.0%
1,119,671
10.7%
291,114
19.9%
828,556
7.7%
26.0%
74.0%
1,236,464
10.4%
321,481
10.4%
914,984
10.4%
8.0%
25.0%
75.0%
1,362,208
10.2%
340,552
5.9%
1,021,656
11.7%
8.0%
25.0%
75.0%
1,483,087
8.9%
370,772
8.9%
1,112,315
8.9%
20,095,269
8.0%
25.0%
75.0%
1,607,622
8.4%
401,905
8.4%
1,205,716
8.4%
FY21
21,859,709
8.0%
25.0%
75.0%
1,748,777
8.8%
437,194
8.8%
1,311,583
8.8%
FY22
23,617,372
8.0%
25.0%
75.0%
1,889,390
8.0%
472,347
8.0%
1,417,042
8.0%
FY23
25,510,202
8.0%
25.0%
75.0%
2,040,816
8.0%
510,204
8.0%
1,530,612
8.0%
FY24
27,478,200
8.0%
25.0%
75.0%
2,198,256
7.7%
549,564
7.7%
1,648,692
7.7%
FY25
29,555,745
8.0%
25.0%
75.0%
2,364,460
7.6%
591,115
7.6%
1,773,345
7.6%
FY30
41,957,464
8.0%
25.0%
75.0%
3,356,597
7.2%
839,149
7.2%
2,517,448
7.2%
FY35
56,909,451
8.0%
25.0%
75.0%
4,552,756
6.0%
1,138,189
6.0%
3,414,567
6.0%
FY40
72,548,414
8.0%
25.0%
75.0%
5,803,873
5.0%
1,450,968
5.0%
4,352,905
5.0%
FY44
85,425,872
8.0%
25.0%
75.0%
6,834,070
3.9%
1,708,517
3.9%
5,125,552
3.9%
CAGR
7.2%
7.4%
8.8%
Annual Growth
Rate
7.1%
163
7.6

Gateway traffic is the generic hinterland traffic expected to be attracted by the port. The
current hinterland for the proposed Vizhinjam port has been segregated into primary,
secondary and distant hinterland. This segmentation is based on the proximity of the port
with its cargo centre and current dynamics of container trade movement from these
regions to the competing ports. The hinterland has been defined as under wherein the
major cargo centres have been listed along with the total container traffic potential (teu,
FY08) for both export and import cargo generated from the area:Primary
Traffic
Location
Potential
Kerala
146,610
Secondary
Location
Tuticorin
Tirupur
Coimbatore
Salem
Other Karnataka
Other TN
Distant
Traffic
Potential
390,719
Location
Traffic
Potential
Bangaluru
Chikamagalur/Hasan
Mangalore
Chennai
Hosur
Karur
Mormugao
997,085
The rate of growth of industrialisation, investments, infrastructure investments and

container traffic are highest in the distant hinterland followed by secondary and then
primary hinterland of the port. The ports serving this hinterland particularly in the lower
east coast region are in advanced state of available infrastructure and investments to
attract burgeoning traffic from these cargo centres. Therefore, by the time of its expected
commissioning Vizhinjam port would have to face stiff competition from these ports to
attract container traffic.
Primary Hinterland
Kerala would be primary hinterland for the proposed Vizhinjam port. Despite Vizhinjams
proximity to the southern part of Tamil Nadu, which anyway does not contribute
significantly to the overall container traffic in the state, expected container traffic would be
of little significance. There are few pockets of industrial zones in the region but they are
located closer to the Tuticorin port and are likely to generate traffic for Tuticorin port which
has demonstrated decent service standards over the years. Therefore, it may act as
secondary hinterland for the proposed Vizhinjam port, shared by Tuticorin port.
Within Kerala, few cargo centres like Tiruvananthapuram, Allapuzha, Kollam and
Kanyakumari in Tamil Nadu contribute around 40% of the overall container traffic
generated in the state. Currently, this traffic is served by Cochin port to a large extent and
Tuticorin port has a limited share. Drewry estimates that this could possibly become the
primary hinterland for the port and is most likely to initially contribute to the container traffic
generated from its hinterland. With the exception of Allapuzha, Vizhinjam has distance
advantage in terms of other competing ports in the region namely, Tuticorin and Cochin.
Allapuzha has a high concentration of cashew traffic in the state and a significant volume
is moving from Tuticorin. Therefore, in a scenario when Vizhinjam is operational it is most
likely that feeder/mainline vessels which are serving cashew trade through Tuticorin is
most likely to shift to the port.
However, it is to be noted that this is not a critical mass that would suffice for
mainline/feeder vessel traffic to the port. Cochin & Tuticorin has significant other traffic
164
which provides incentive for a shipping line to call at this port coupling additional traffic
from these Southern Kerala destinations. Therefore, Drewry estimates that the traffic
diversion from these competing ports comes with a rider that Vizhinjam is able to attract
mainline vessel calls, in this case, the transhipment traffic.
The other cargo centres in the primary hinterland are situated closer to the Cochin port
which has a significant advantage in terms of proximity to these regions. Most of these
cargo centres lie in the Northern part of the state and contribute additional 60% of the
traffic. However, as majority of the traffic at Cochin is still served by feeder vessels, there
could be an incentive for these shippers to shift to Vizhinjam swapping feeder services at
Cochin to mainline calls at the Vizhinjam. However, as Vallarpadam terminal is vying to
establish itself as the transhipment hub and is in advanced stage of negotiating with
shipping lines to attract mainline calls, Cochin port has the benefit of first mover advantage
over other ports.
In the base case scenario, Drewry estimates that the Vizhinjam would be able to attract
40% of the available market of the primary hinterland.
Secondary Hinterland
Secondary hinterland is actually the common hinterland shared between Chennai,

Tuticorin and to a little extent by the Cochin port. The current estimates suggest that the
total traffic generated from this region is close to 400,000 Teus per annum.
The major cargo centres in this hinterland are Tirupur, Coimbatore and Tuticorin and its
adjoining areas. In spite of the proximity of Coimbatore and Tirupur to Cochin vis--vis
Tuticorin port, almost 80% of the traffic is moving to Tuticorin. There are several reasons
like poor road/rail connectivity to the Cochin port from this region, low port / container
handling charges at Tuticorin, cheaper transport charges, etc. Major commodities that are
being shipped from this region include garments and textiles which are very time bound
cargo. One of the salient points that came up during the primary survey was that the
Tuticorin port accepts containers till two hours prior to the vessel sailing time. This along
with several other customer friendly incentives provided by the port has resulted in large
volumes of this cargo centre moving to the Tuticorin port.
Therefore, Vizhinjam would have to face stiff competition from Tuticorin, Chennai and
Cochin ports to wean away container traffic from this region. Drewry estimates that in the
base case scenario, Vizhinjam would be able to take 5% market share in the secondary
hinterland.
Distant Hinterland
The cargo centres in the distant hinterland are primarily being served by the Chennai port.
With the inception of Ennore port, the container handling capacity in the Chennai region
would be doubled in the first phase itself. The market sentiments in the region are very
positive about the impact of Ennore port in attracting container traffic to the region. This
can be gauged by the fact that most the new CFSs are being planned near the Ennore
port. Chennai port is facing massive problems in terms of last mile connectivity by road to
the port; Ennore is most likely to alleviate this problem.
Drewry estimates that Vizhinjam would not be able to attract any traffic from this
hinterland.
165
Road / Rail Connectivity & its impact on container traffic
In the current scenario, major cargo centres for the LEC coast and LWC ports are situated
within 350 km radius, therefore road connectivity plays a very important role in port
attractiveness. It is estimated that economic feasibility of rail transfer of container traffic is
inversely proportional to distance from the port. The minimum distance considered for
viable rail connectivity is considered to be 500 Km in the current trading conditions in India.
Chennai is the only port in the region which attracts significant rail traffic; however the
share of container traffic from rail is estimated to be around 10-15% of the overall traffic.
With the exception of Chennai and adjoining cargo centres in that region, most of the
cargo centres in the entire hinterland for the Vizhinjam port lie within 500 Km radius.
Therefore, road transport would play a critical part in attracting container traffic from these
regions.
However, for an economically viable road transport service, the transporter should have
return cargo from the destination along with quick turnaround time from the port. This is
one of the critical factors which would impede market share growth of Vizhinjam in the
secondary and distant hinterland along with north Kerala cargo in its primary hinterland.
The case of Coimbatore/Tirupur cargo moving to Tuticorin port is a pertinent example in
such a scenario. In spite of being closer to the Cochin port, it is costlier to transport
container from Coimbatore/Tirupur to Cochin as compared to the Tuticorin port. The
current estimates suggest that the shipper has to pay an additional Rs 2500/3000 for a
return trip movement to the Cochin port. This is due to the reason that there is no/limited
return cargo from Cochin to these regions which are highly export dominated. Therefore
the turnaround time and overall transportation cost is higher for this movement. This issue
combined with delay at Kerala-Tamil Nadu border crossing and poor road connectivity
(single lane roads on large stretches) add to the overall cost of transportation from Tamil
Nadu to Kerala.
Other issues
Commodity profile
The major commodities contributing to the container traffic in the state of Kerala is
agricultural goods. Being low priced, these commodities are price sensitive and hence
limited incentive for the shipping. Therefore they would continue to utilise facilities
which are closest to their production centres. It would be prudent to conclude that
these commodities would continue to move through the ports in Kerala. However, the
average growth rate of these commodities is lower as compared to other goods like
textile and industrial commodities. Therefore, the average growth of container traffic in
the primary hinterland of the Kerala would be low.
Equipment imbalance
Due to the commodity profile, Kerala exports large volumes in forty foot containers.
However limited imports occur in the same box size which makes a case for
positioning empty containers in the region. The share of empties traffic in overall
container traffic of the Cochin port has been consistently 40% over the past decade.
This is an incremental cost for the shipping lines which affects the overall cost of
shipping containers from these ports.
166
Business Environment
One of the major problems in attracting investments in Kerala has been the frequent
labour problems in the state. One of the most pertinent issues that have been reported
by shipping community in terms of the functioning at the Cochin port has been labour
problems and inflexible work culture. For example, vessel cut off time at Tuticorin is
two hours prior to departure which is unimaginable at the Cochin port, similarly labour
problems are much less frequent in other states as compared to Kerala. Although, the
situation has been changing over the past few years, however this remains a major
cause of concern for international trade traffic development at Kerala ports.
Soft infrastructure
This is a critical issue in terms of attracting container traffic at a port. Availability of soft
infrastructure like CFS, warehouses, offices of custom handling agents, transport
service providers, cargo handling equipments outside port area, etc, significantly
impact container traffic at a port. A pertinent example in this case has been the port of
Pipavav. The port has not been able to attract container traffic at its in its initial years
despite having a respectable hinterland support from the largest container liner service
provider in the world, Maersk Line. The port lacked in soft infrastructure like availability
of CFSs which help consolidation / deconsolidation of cargo, custom clearing activities
and warehousing facilities, apart from rail/road connectivity which was another major
issue. However, after significant investments in rail/road connectivity and soft
infrastructure, the container traffic has improved over the years; however Mundra
which made rapid investments in such support facilities gained immensely, taking a
massive share of the North West Indian container traffic.
Chennai port has around 28 CFS, Tuticorin has eight and Cochin has one such
facility. Similarly, the concentration of container service providers like offices of
shipping lines, staff strength, logistics service providers and CHAs is very high at the
LEC ports as compared to the LWC region.
As discussed earlier, Chennai port has emerged as the largest container handling facility
on the East Coast and has been registering a robust growth over last five years. However,
increasing traffic at Chennai container terminal has resulted in a severe capacity constraint
coupled with logistics bottlenecks within the city limits.
Shipping lines hold a mixed response to the development of the second container terminal
at Chennai. While the lines feel that the volumes generated in the region demands
additional facilities, there are also certain infrastructural issues that need to be considered.
The lines also believe that the existing terminal (CCTL) will not be able to handle the
increase in container traffic, which is expected in next ten years, and that the region should
have other alternative ports to share the expected growth in the trade. Considering that
Chennai handles more than 50% of the traffic in the region, any new port, which is able to
cater to the growing hinterland, will have significant hinterland traffic available to make the
new port project viable.
167
7.6.1 Perceived advantages and disadvantages of Vizhinjam port

Advantages
Proximity to main shipping route: Vizhinjam has only 7 nm deviation from the main
Asia-Eur trade lane which is one of the largest trade lanes for container shipping in the
world with high container traffic moving on East-West corridor.
Draft: Vizhinjam has one of the largest natural draft across container handling ports
around the world. The natural draft would save expenses for dredging in terms of both
capital outlay and maintenance. Such draft is capable of accommodating largest
container vessels which are currently operational.
Disadvantages
Location: In spite of being closest to the main container shipping trade lane, the port
does not has a significant hinterland volume which could provide critical mass required
for shipping to start liner services from the port.
Port Competition: Once commissioned the port would face intense competition for
hinterland traffic from currently existing ports like Chennai, Cochin and Tuticorin along
with new facilities which are up-coming on the lower east coast of India. The target
market is shared by many facilities which have a first mover advantage over the
Vizhinjam port.
Supporting infrastructure: Vizhinjam lacks supporting infrastructure like CFS,

warehouses, etc. which are essential to support container traffic at the port.
Market perception (based on primary survey in Cochin)
Container traffic growth in the primary hinterland of the port is limited therefore the
new facility would not result in incremental cargo from Kerala.
The port is likely to attract container traffic from southern Kerala districts, namely,
Allapuzha, Trivandrum, Kanyakumari and Kollam.
The proposed port would have strong competition from Tuticorin and Cochin and
would be very difficult to attract gateway traffic from the immediate hinterland of these
regions.
The development of traffic at Vallarpadam terminal will show the direction in which
future container traffic at Vizhinjam port is likely to growth.
Good rail & road connectivity to the port is prerequisite for attracting container traffic
growth at the proposed port.
Inland transportation costs should be competitive vis--vis transportation costs to the

current facilities.
Soft infrastructure like availability of CFSs, warehouses, logistics service providers, etc
is of vital importance for port attractiveness.
168
Main assumptions for hinterland traffic forecast for Vizhinjam port
The first phase of the Vizhinjam port would be operational by FY 2014.
Ennore port would be operational by FY 2014.
Chennai mega terminal to be commissioned for operation in FY2017.
Tuticorin port likely to augment its container handling facility in the latter half of 20102020, however it is expected that the port would lose its market share over the
forecast period.
Chennai port with second terminal is most likely to reach its operational peak by FY
2015 which would pave way for the mega terminal. Ennore port is most likely to benefit
during this period.
Cochin is currently one of the costliest ports in India in terms of total port charges.
Drewry estimates that these charges would not reduce significantly by FY14.
It is assumed that approach roads would be constructed to connect the proposed

Vizhinjam port.
The port would gain 40% market share of the primary hinterland and limited share of
secondary shared hinterland over the forecast period. The cost of inland haulage and
availability to competing ports would result in a maximum cap to the total market share
available to the propose facility.
The port is assumed to attract mainline vessel services for Indian subcontinent
transhipment traffic which would provide economies of scale in terms of critical mass
available to shipping lines.
Table 7.15
Year
High
Base
Low
FY 2014
27,129
26,221
25,992
FY 2015
38,566
36,900
36,502
FY 2016
50,986
48,293
47,676
FY 2017
66,727
62,566
61,646
FY 2018
82,796
76,851
75,573
FY 2019
100,131
92,002
90,298
FY 2020
106,562
96,921
94,944
FY 2021
133,958
118,900
116,255
FY 2022
149,116
131,983
128,804
FY 2023
167,372
147,920
144,087
FY 2024
181,799
160,224
155,782
FY 2025
197,183
173,301
168,183
FY 2030
339,476
294,278
282,967
FY 2035
471,218
402,863
383,805
FY 2040
614,999
518,434
489,276
FY 2044
738,050
615,123
576,123
11.6%
11.1%
10.9%
CAGR
169
Transshipment Container Traffic Forecast - Indian Sub-continent
8. Transshipment container traffic

forecast - Indian sub-continent
Objective
To forecast
Gateway container traffic in ISC countries

Transshipment container traffic generated from ISC
Estimated share of hub ports in the target market
Transshipment traffic forecast for Vizhinjam port
Total traffic forecast for Vizhinjam including gateway & transhipment
Equipment wise container traffic forecast at Vizhinjam
Key Findings
Colombo port is the primary competitor for Vizhinjam port for transhipment market
and the current market dynamics suggest that it is only ISC transhipment traffic
market can be catered to by the port. The estimated gateway traffic in the base case
scenario is estimated to grow from 12m teu in FY 10 to 120m teu in 2044.The total
share of feeder traffic is estimated to decrease from 30% to 16% during the same
period. Therefore, the rate of growth of transhipment traffic would reduce compared
to what has been witnessed so far.
The total available feeder market is expected to increase from 7.2m Teu in FY2010 to
38.7m Teu by 2044. The current share of Colombo in this market is approximately
38%. As Vizhinjam is targeting the same market, the estimated share of
Vizhinjam/Colombo is likely to increase to 44.2% by FY 2044. The share of hub ports
outside ISC in the overall ISC transhipment market is estimated to reduce from 60%
to 50% during the same period; remaining traffic would be handled by other hubs in
ISC.
Conclusion
In the high base and low case scenario , the transhipment traffic in million at Vizhinjam is
forecast as follows:-
High
Base
Low
2014
2044
0.12
0.11
0.11
3.15
2.05
1.88
The total container traffic in million Teu, in the high, base and low case scenario , at
Vizhinjam is forecast as follows:-
High
Base
Low
2014
2044
0.15
0.15
0.15
4.07
2.82
2.60
170
This section provides the methodology for deriving forecast gateway traffic at ISC ports
through to FY 2044. Gateway (import-export) container volumes have been forecast from
both a top down and bottom up approach. Overall volumes for the ISC region have been
forecast based on the combined economic activity of the region. This approach has then
been utilised to derive overall forecast for each country and sub-region of the ISC.
For understanding the origin/destination of transhipment volumes from the ISC region, the
region has been segregated into six sub regions. The segregation would assist in
understanding the share of deep sea via direct calls, deep sea via feeder calls and ISC
intra-regional traffic share from these sub-regions. The overall traffic generated through
deep sea via feeder calls would be the target market for ports vying for transhipment traffic
share in the Indian subcontinent region.
8.1
Region
Ports (proposed & existing)
Pakistan
West coast India
South coast India
East coast India
Bangladesh
Sri Lanka
All ports in Pakistan

All ports north of the New Mangalore port on the west coast of India
All ports lying between and including Cochin & Tuticorin
All ports north of the Tuticorin port on the east coast of India
All ports in Bangladesh
All ports in Sri Lanka
Colombo Competitive profile

Colombo is the sole competitor of the proposed Vizhinjam port in the transhipment
container traffic market of the Indian sub-continent. The port is located on the west coast of
Sri Lanka at latitude of 60 57 N and a longitude of 790 51 E. Futile to say, that it is not
only the principal port of Sri Lanka but also the largest transhipment hub in the ISC region.
It is ideally located on the main east west shipping lanes running from Europe to the East
and the Far East, Europe to the Australasia through Singapore and from Indias West
Coast to the East Coast. The deviation from the main sea route is only around 8 hours.
There are three container handling terminals at port of Colombo Jaya Container Terminal
(JCT), South Asia Gateway Terminal (SAGT) and Unity Container Terminal (UCT).
Current handling capacity at the port is around 4.2m teu, which, with the development of
the South Harbour, can be increased to 15-16 million teu per annum. In 2008, Colombo
port registered a throughput of 3.6 million teu. The port has shown CAGR of 8% in
throughput over the last 10 years. Around 75% of the total container volumes at port of
Colombo consist of transhipment traffic from India.
The port lost its market share during mid-2000 when it was unable to handle increasing
transhipment traffic from the ISC region. Hub ports outside ISC region like, Singapore,
Salalah, Jebel Ali, etc were the major beneficiary of Colombos loss of market. However,
with the commissioning of the South Asia Gateway Terminal and increase in draft, the port
has rapidly regained its market share.
Furthermore, in view of strong growth registered by ISC traffic, the port has heavily
invested in increasing its container handling capacity in future. One of the biggest and
audacious projects is the development of the Colombo South Harbour.
The proposed Colombo South Harbour will be located west of the present south west
breakwater in an area of approximately 600 hectares. The proposed harbour will have 4
terminals of over 1,200m in length each to accommodate three berths alongside depths of
171
18m and provision to deepen to 23m to accommodate deeper draft vessels of the future.
The channel width of the harbour is to be 560 m and depth of 20m, with harbour basin
depth of 18m and a 600m turning circle. The capacity expansion project is expected to
increasing container handling capacity of the port from 4.0m Teu to approximately 12.0m
Teu. The project has a capital outlay estimate of around $ 800m, wherein around $ 300m
has been provided by the Asian Development Bank, and $ 180m by Sri Lankan
Government and rest by private players. Hyundai Engineering & Construction Co is the
contractor of the project. As per latest estimates, the overall project has progressed at
around 20% completion stage.
A brief profile of the current operational terminals is as follows:
South Asia Gateway Terminal (SAGT)
South Asia Gateway Terminal (SAGT) is a joint venture company involving international
terminal operator Dubai Ports World (DPW), AP Moller and Evergreen, with the Sri Lanka
Ports Authority (SLPA) having a minority stake. SAGT took over operation and
management of Queen Elizabeth Quay (QEQ) in the port of Colombo in 1999, emerging as
first modern private container terminal in Sri Lanka. Phase 1 of the SAGT project was
completed in early 2002, with 340 meters of quay length and depth alongside of 15
meters. Similarly Phases 2 and 3 were completed in mid 2002 and 2003, with a total quay
length of 940 meters and total handling capacity in excess of 1 million teu.
As shown in Table 8.1 SAGT registered a container throughput of 1.88m teu in 2008, as
compared to 1.7mn in 2007, witnessing a growth of 6% over the last year. The terminal
has recorded a CAGR of 19.6% in container volumes in the last 10 years. The share of
SAGT in total throughput of Colombo has been quite steadily increasing from 19 percent in
1996 to 51% in 2008.
Table 8.1
Development of container volumes in Colombo and share of
traffic between terminals
(000 teu)
Year
SAGT
Volumes
%
Growth
JCT/UCT*
Volumes
%
Growth
Colombo
Total
SAGT
Share
SLPA
Share
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
250
325
312
200
301
330
558
625
898
932
1,335
1,770
1,880
30%
-4%
-36%
51%
10%
69%
12%
44%
4%
43%
32.6%
6.2%
1,041
1,362
1,402
1,504
1,432
1,397
1,182
1,335
1,300
1,522
1,744
1,835
1,807
31%
3%
7%
-5%
-2%
-15%
13%
-3%
17%
15%
5.2%
-1.5%
1,291
1,687
1,714
1,704
1,733
1,727
1,740
1,960
2,198
2,454
3,079
3,605
3,687
19%
19%
18%
12%
17%
19%
32%
32%
41%
38%
43%
49%
51%
81%
81%
82%
88%
83%
81%
68%
68%
59%
62%
57%
51%
49%
* Figures of JCT includes that of UCT also

172
An overview of SAGT confirms the following key points:
Annual capacity of 1,800,000 teu per annum.
Total quay length of 940 meters.
6 Super post-Panamax quay cranes.
3 post- Panamax quay cranes.
28 rubber tyred gantry cranes.
45 terminal tractors.
15m dredged water depth.
Jaya Container Terminal (JCT)

Jaya Container Terminal (JCT) at port of Colombo is operated by Sri Lanka Port Authority
(SLPA), and has been working at high utilization levels in recent years. The current
theoretical capacity at JCT is around 2.2m teu comprising of 6 berths, with a total quay
length of 1,646 meters. JCT offers a alongside depth of 8-15 meters, sufficient to handle
current large size vessels, the terminal is equipped by 6 Super post-Panamax and 8 postPanamax gantry cranes. JCT has suffered from low productivity in recent years, although
performance levels have increased significantly in the face of competition from SAGT.
There are also other factors that make the terminal seem unattractive, especially
compared to some of the regional competition:
Congestion and waiting time for berths.
Labour problems.
Due to above mentioned bottlenecks; the share of JCT in the total traffic of port of
Colombo has been quite steadily decreasing. As shown in table 8.1, in 1996 JCT had a
major share of traffic at around 81% which fell to 49% in the year 2008. Recent increase in
the share of SAGT plus improvements in productivity have helped JCT to ease the
congestion problem at its terminal, which now can utilize the spare capacity in attracting
new business. The terminal is also expected to increase its current capacity of 2.2m teu to
2.6m teu by 2010.
Unity Container Terminal (UCT)
Unity Container Terminal (formerly known as North Pier), operated by Sri Lanka Port
Authority acts as a satellite terminal for JCT having an annual handling capacity of
400,000 teu. UCT has two berths totalling 340 meters quay of length and water depth
alongside ranging from 9 to 11 meters. It is equipped with 3 Panamax gantry cranes and 8
rubber tyred gantry cranes.
173
8.1.1 Colombo SWOT Analysis

Strength
Excellent location for major East-West trade axis.
Successful introduction of private investors.
Concrete plans to increase capacity.
Competitive transhipment tariffs.
Attained strong growth over past decade.
Large captive container traffic generated from its hinterland.
Rapidly gained market share once capacity was increased.
Weakness
Higher country risk than some competitors.
The port uses only one entrance channel and has just single turning basin, which
can lead to delayed arrivals and departures.
Labour problems can affect port productivity.
Old port, infrastructure, constrained by city.
Opportunity
Geographical locations of large Indian ports make Colombo an ideal transhipment

option to shippers.
Trade growth in ISC, which directly affects traffic at Colombo.
Proposed Colombo Port Expansion Program (CPEP) can give boost to container
traffic with increased capacity and faster vessel turnaround times.
Congestion at Indian ports benefits Colombo.
Threats
Port of Kelang and Tanjung Pelepas have cheaper tariffs.
Development of deep draft ports in ISC, particularly in India.
174
8.2
Step
1
ISC Transshipment traffic forecast methodology

Methodology
Forecast total gateway traffic volumes for each of the country in the Indian subcontinent. Indias traffic is
derived from forecast in the previous section. Container traffic forecast for Bangladesh, Pakistan and Sri
Lanka have been forecast based on their historical share in overall container traffic in the ISC region, their
container traffic / GDP multiple and future estimated GDP growth rate of each country.
Estimate share of deep sea via direct calls, deep sea via feeder calls and intra regional traffic in the overall
gateway traffic of each country.
The total deep sea via feeder calls traffic provides the potential target market of container transhipment from
the Indian sub-continent region
Forecast estimate share of available target market for Vizhinjam/Colombo port, other hub ports within the ISC
region and hubs outside ISC region
Forecast estimated transhipment traffic handled by hub ports outside the ISC region.
Estimate the share of deep sea via feeder calls traffic from each of the gateway ports in the ISC region
Estimate share of Colombo/Vizhinjam ports for potential transhipment traffic from each of gateway ports
based on total available market derived through step-4.
Formulate assumptions that would provide guidance for future estimated market share of Vizhinjam port in
the common target market for transhipment traffic available for Colombo & Vizhinjam port
Forecast transhipment traffic for Vizhinjam based on available target market and estimated share of
Vizhinjam port during the forecast period.
8.3
ISC Transshipment traffic forecast main assumptions
Share of feeder traffic from ISC countries
With the exception of Bangladesh, the share of feeder traffic has been consistently been
decreasing over the past decade. The increasing container traffic throughput has resulted
in the feeder services to the ISC ports being replaced by main line services, especially on
the West coast of India and Pakistan.
Drewry assumes that the feeder market share would continue to diminish over the forecast
period. However, due to its geographic location and growth rate in container traffic,
Bangladesh, Central & upper east coast of India would continue to have a large share of
its gateway traffic handled by the feeder services.
Bangladesh in particular, provides a large share of available feeder traffic from the ISC
region, due to its perennial draft problems, frequent labour strikes and poor operational
efficiency. Currently, almost 95% of the container traffic from Bangladesh is served
through feeder vessels. Drewry assumes that during the forecast period, with the proposed
development of deep offshore container terminal by 2018-19 and increasing container
traffic, the overall share of container traffic handled by feeder services from Bangladesh is
likely to reduce from 95% to 70%.
175
Share of ISC countries in the overall container traffic
India would continue to dominate the overall traffic generated from the ISC region,
particularly West coast of India. The current estimated share of India in overall container
traffic handled in the ISC region is 66%. Drewry estimates that this share is likely to go up
to 76% over the forecast period.
Other countries in the ISC region are expected to loose market share in the overall
container traffic. This is not due to decreasing container traffic in the region but due to less
than average growth rate anticipated to be witnessed by the Indian ports.
Target Market
The target transhipment traffic market available for the proposed Vizhinjam port is share of
feeder traffic generated from the ISC countries namely, India, Pakistan, Bangladesh & Sri
Lanka. Currently, Colombo is serving as transhipment hub for the same market and
Drewry assumes that both of these ports will be competing for the same target market.
Colombo/Vizhinjam would not be able to cater to transhipment traffic market of other Asian
countries like in the Middle East and South East Asia.
Share of transhipment hubs in the ISC container traffic
As per the current market dynamics of transhipment traffic handling in the ISC region,
Drewry has classified such hub ports into three categories, namely Colombo/Vizhinjam,
other hubs ports in the ISC region and hub ports outside ISC region.
Historically, hubs outside the ISC region, namely Jebel Ali, Singapore, Tanjug Pelepas, etc
have had a major share of transhipment traffic generated from the ISC region. However,
Colombo had traditionally been handling around 30% of the overall market. However with
increase in congestion at the port in mid-2000 and lack of container handling
infrastructure, the port rapidly lost its market in the overall business. The estimated share
fell from 30% to almost 23% by 2002. However, with the development of its captive
hinterland traffic and large investments in container handling infrastructure at the Colombo
port, its share has steadily increased to almost 38% by 2008.
Drewry estimates that with increase in mainline call incidences at the gateway ports in the
ISC along with decreasing dependence on hubs outside ISC region, the share of
Colombo/Vizhinjam in the available target market is likely to increase over the forecast
period.
Target Market & West bound trade
Drewry assumes that a major share of target market for transhipment traffic would be
contributed by the South & East Indian ports along with Bangladesh. The majority of this
traffic would be westbound trade serving major trade lanes from ISC to Europe and North
America.
There would be high incidence of mainline vessels at West coast of India and Pakistan
and due to geographical disadvantage of serving West bound traffic of these ports through
Colombo/Vizhinjam, the target market would exclude the volume generated from this
region.
176
8.4
ISC regional gateway (import-export) volumes forecast

The scale of the ISC regions import-export teu traffic defines the underlying size of the
potentially available transhipment market for Colombo & Vizhinjam. The ISC regions total
gateway container port activity has been forecast based on historic share of net gateway
traffic amongst the defined six sub-regions in the table above. The west coast, south coast
and east coast India gateway traffic has been forecast on the basis of total gateway teu
forecast for India as discussed in the previous section.
Drewry has estimated future share of container traffic of other countries in the ISC on the
basis historic growth rates of net gateway volumes in the countries and estimated
economic growth over the forecast period. As can be seen, in Table 8.2 average growth of
12-13% per annum is forecast for the period to 2015, dropping to 7.7-8.8% in the medium
term and 5.0-5.5% in the long term. The compounding effect of forecasting for a 30 year
period means that in absolute terms, there is a significant difference in the three scenarios
by 2044. In the base case, total gateway volumes in the region are projected to reach
almost 120 million teu by 2044, up from 12 million in 2010.
Table 8.3 breaks down the total ISC gateway traffic into the main sub-regions/countries.
India will naturally remain the largest market by a considerable margin, and is also
expected to show the strongest growth, along with Pakistan. Sri Lankas growth in gateway
cargo is expected to be much more modest, as detailed in tables below.
Having broken down the gateway traffic into countries/sub-regions, in order to separately
identify the available transhipment market for Colombo it is then necessary to break the
volumes down further to distinguish between gateway volumes which will move on direct
mainline services and gateway volumes which will move via feeder. Table 8.4 shows the
forecast split of port traffic in percentage terms. These projections have been developed
based on an assessment of past trends, plus, in the short to medium term, consideration of
port development projects in India in particular which will facilitate direct call services. At
the same time, the influence of the deployment of larger ships on east-west services
passing through the region has been weighed up. This has a counterbalancing effect as
these ships will continue to rely on feedering and transhipment to fill them at ports such as
Colombo. On balance, there seems little doubt that the proportion of volumes moved via
direct call services will increase in all cases. However, Pakistan and the west coast of India
are already at high levels of direct calls, and so there is limited scope for this to increase.
The south and east coasts of India are currently at much lower levels of direct call
incidence, assessed at 39% and 30% respectively in FY 2010. Port developments on
these coasts, plus overall growth in the market are expected to result is a much higher
proportion of direct call traffic in future, although this will take time to emerge.
Bangladesh meanwhile has very little direct call traffic. Within the forecasting model it is
assumed that, in time, port facilities are improved and that a deep water facility is
developed in the country. However, the extent of deviation involved in accessing
Chittagong means that feedering is expected to remain a key part of serving the country in
the long run.
The overall effect within the ISC region of these projections is that direct calls are expected
to increase from the current estimated 67.5% of the total port traffic to 81.4% by 2044.
Even though the feeder share is declining in the forecast, overall feeder traffic volumes still
grow, because the overall market is growing. Table 8.5 shows the resulting volumes for the
177
ISC region split into direct call, feeder and intra-regional traffic. Whilst overall gateway
volumes are projected to grow by 12.2% per annum in the period 2010-2015 in the base
case scenario, within this, direct call volumes show a 13.8% p.a. growth whilst feeder
volumes are at 8.1% p.a. This same differential in growth rates is also particularly evident
in the medium term through to 2025.
Tables 8.6 to 8.10 show the forecast gateway volumes split into direct and feeder traffic on
a sub-region by sub-region basis. As can be seen, the development of feeder traffic in the
base case for the period from 2010 to 2015 ranges from a low of 1.7%-3.4% p.a. for
Pakistan and the west coast of India, 10.3% p.a. for east coast India, 5.8% p.a. for the
south coast and 10.7.% p.a. for Bangladesh. However, Bangladeshi feeder growth rate
increase to only 3.6% p.a. for the period 2015-2025 as it is assumed that deep water
facilities are finally developed in the country. During the same time period, growth rates for
Pakistan and the south and east coasts of India are around 5-6% p.a. but the west coast
feeder traffic growth rate climbs to 8.1% per annum. This is because the west coast,
already at a high proportion of direct calls, rapidly reaches a ceiling in the proportion of
direct calls. As a result, the strong growth this coast is expected to experience flows
through similarly to direct calls and feeder calls in the medium term.
178
Table 8.2
Forecast ISC region gateway volumes, 2010-2044
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
CAGR
CAGR
CAGR
2010-
2015-
2025
2015
2025
on
5.2%
FY44
Base case
11,943
13,574
14,861
16,265
17,772
21,220
31,751
45,525
63,808
84,073
101,456
119,978
12.2%
7.9%
High case
11,943
13,621
14,962
16,658
18,387
22,404
32,196
51,943
73,810
98,616
120,353
143,954
13.4%
8.8%
5.5%
Low case
11,943
13,543
14,794
16,157
17,616
20,949
31,045
44,099
61,243
79,945
95,750
112,371
11.9%
7.7%
5.0%
Table 8.3
Forecast net ISC gateway (import-export) volumes by market area, 2010-2044
(000 teu)
BASE CASE
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
CAGR
CAGR
CAGR
FY44 2010-
2015-
2025
2015
2025
on
Pakistan
2,020
2,282
2,484
2,702
2,935
3,462
5,021
6,971
9,452
12,033
14,116
16,573 11.4%
7.3%
4.7%
West coast India
5,397
6,132
6,790
7,457
8,161
9,760
14,781
21,190
28,394
38,011
46,495
55,167 12.6%
8.1%
5.2%
South coast India
732
841
913
1,008
1,064
1,220
1,815
2,536
3,057
3,203
3,679
4,160 10.7%
7.6%
2.6%
East coast India
1,791
2,046
2,298
2,534
2,847
3,561
5,761
9,048
15,389
21,623
26,698
31,882 14.7%
9.8%
6.9%
Bangladesh
1,076
1,195
1,294
1,406
1,524
1,791
2,565
3,490
4,614
5,700
6,505
7,581 10.7%
6.9%
4.2%
927
1,079
1,084
1,158
1,242
1,427
1,808
2,290
2,903
3,504
3,964
4,616
9.0%
4.8%
3.8%
11,943
13,574
14,861
16,265
17,772
21,220
31,751
45,525
63,808
84,073
101,456
119,978 12.2%
7.9%
5.2%
Sri Lanka
Total
179
Table 8.3 (contd)

HIGH CASE
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20152025
CAGR
2025
on
FY10
FY11
FY12
FY13
FY14
Pakistan
2,020
2,290
2,501
2,767
3,036
3,655
5,657
7,954
10,933
14,115
16,745
19,884 12.6%
8.1%
4.9%
West coast India
5,397
6,153
6,836
7,637
8,443
10,304
16,653
24,177
32,845
44,586
55,156
66,191 13.8%
8.9%
5.4%
South coast India
FY15
CAGR
20102015
('000 teu)
732
844
919
1,032
1,101
1,288
2,045
2,893
3,536
3,757
4,364
4,991 12.0%
8.4%
2.9%
East coast India
1,791
2,053
2,313
2,595
2,945
3,759
6,491
10,323
17,801
25,363
31,671
38,253 16.0%
10.6%
7.1%
Bangladesh
1,076
1,199
1,302
1,440
1,577
1,891
2,890
3,982
5,337
6,686
7,716
9,096 11.9%
7.7%
4.4%
927
1,082
1,091
1,186
1,285
1,507
2,037
2,613
3,357
4,110
4,702
5,538 10.2%
5.7%
4.0%
11,943
13,621
14,962
16,658
18,387
22,404
35,772
51,943
73,810
98,616
120,353
143,954 13.4%
8.8%
5.5%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
CAGR
20152025
CAGR
2025
on
Pakistan
2,020
2,277
2,473
2,684
2,909
3,417
4,909
6,753
9,072
11,443
13,322
15,522 11.1%
7.0%
4.5%
West coast India
5,397
6,117
6,759
7,407
8,089
9,635
14,452
20,526
27,253
36,144
43,880
51,669 12.3%
7.9%
5.0%
Sri Lanka
Total
LOW CASE
South coast India
FY44
CAGR
20102015
732
839
909
1,001
1,055
1,204
1,775
2,456
2,934
3,046
3,472
3,896 10.5%
7.4%
2.5%
East coast India
1,791
2,041
2,287
2,517
2,822
3,515
5,633
8,764
14,770
20,561
25,196
29,861 14.4%
9.6%
6.7%
Bangladesh
1,076
1,192
1,288
1,396
1,511
1,768
2,508
3,381
4,428
5,420
6,139
7,100 10.4%
6.7%
4.0%
927
1,076
1,079
1,150
1,231
1,409
1,768
2,219
2,786
3,332
3,741
4,323
8.7%
4.6%
3.6%
11,943
13,543
14,794
16,157
17,616
20,949
31,045
44,099
61,243
79,945
95,750
112,371 11.9%
7.7%
5.0%
Sri Lanka
Total
180
Table 8.4
Forecast split of ISC gateway traffic by sub-region, 2010-2044
Pakistan
West coast India
South coast India
East coast India
Bangladesh
Sri Lanka
ISC total
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
81.0%
16.5%
2.5%
82.0%
15.5%
2.5%
83.0%
14.5%
2.5%
84.0%
13.5%
2.5%
85.0%
12.5%
2.5%
87.0%
10.5%
2.5%
88.0%
9.5%
2.5%
88.0%
9.5%
2.5%
88.0%
9.5%
2.5%
88.0%
9.5%
2.5%
88.0%
9.5%
2.5%
88.0%
9.5%
2.5%
86.0%
11.5%
2.5%
87.0%
10.5%
2.5%
88.0%
9.5%
2.5%
89.0%
8.5%
2.5%
90.0%
7.5%
2.5%
90.0%
7.5%
2.5%
90.0%
7.5%
2.5%
90.0%
7.5%
2.5%
90.0%
7.5%
2.5%
90.0%
7.5%
2.5%
90.0%
7.5%
2.5%
90.0%
7.5%
2.5%
39.0%
58.5%
2.5%
40.0%
57.5%
2.5%
42.0%
55.5%
2.5%
44.0%
53.5%
2.5%
46.0%
51.5%
2.5%
51.0%
46.5%
2.5%
57.0%
40.5%
2.5%
62.0%
35.5%
2.5%
67.0%
30.5%
2.5%
72.0%
25.5%
2.5%
76.0%
21.5%
2.5%
80.0%
17.5%
2.5%
30.0%
67.5%
2.5%
32.0%
65.5%
2.5%
34.0%
63.5%
2.5%
36.0%
61.5%
2.5%
38.0%
59.5%
2.5%
42.0%
55.5%
2.5%
50.0%
47.5%
2.5%
55.0%
42.5%
2.5%
60.0%
37.5%
2.5%
65.0%
32.5%
2.5%
69.0%
28.5%
2.5%
73.0%
24.5%
2.5%
5.0%
92.5%
2.5%
5.0%
92.5%
2.5%
5.0%
92.5%
2.5%
5.0%
92.5%
2.5%
5.0%
92.5%
2.5%
5.0%
92.5%
2.5%
25.0%
72.5%
2.5%
30.0%
67.5%
2.5%
30.0%
67.5%
2.5%
30.0%
67.5%
2.5%
30.0%
67.5%
2.5%
30.0%
67.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
97.5%
2.5%
67.5%
30.0%
2.5%
68.6%
28.9%
2.5%
69.5%
28.0%
2.5%
70.5%
27.0%
2.5%
71.4%
26.1%
2.5%
72.5%
25.0%
2.5%
75.7%
21.8%
2.5%
77.0%
20.5%
2.5%
77.4%
20.1%
2.5%
78.9%
18.6%
2.5%
80.1%
17.4%
2.5%
81.4%
16.1%
2.5%
181
Table 8.5
Forecast net ISC gateway volumes by type of traffic, 2010-2044
(000 teu)
BASE CASE
('000 teu)
Total net ISC gateway volumes
Of which:
Deep sea via direct calls
Deep sea via feeder calls
ISC intra-regional traffic
FY44
CAGR
20102015
CAGR CAGR
2015- 2025
2025
on
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
11,943
13,574
14,861
16,265
17,772
21,220
31,751
45,525
63,808
84,073
101,456
119,978 12.2%
7.9%
5.2%
8,058
3,587
299
9,308
3,926
339
10,322
4,168
372
11,462
4,397
407
12,697
4,630
444
15,394
5,295
531
24,041
6,917
794
35,034
9,353
1,138
49,368
12,845
1,595
66,286
15,685
2,102
81,301
17,619
2,536
97,610 13.8%
19,368 8.1%
2,999 12.2%
8.6%
5.9%
7.9%
5.5%
3.9%
5.2%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
11,943
13,621
14,962
16,658
18,387
22,404
32,196
51,943
73,810
98,616
120,353
143,954 13.4%
8.8%
5.5%
6,723
3,635
266
7,740
3,627
291
8,058
3,587
299
9,340
3,940
341
10,392
4,196
374
13,137
4,791
460
21,972
6,792
738
34,405
9,385
1,123
49,412
13,153
1,604
69,119
17,041
2,209
91,391
20,260
2,863
111,768 14.3%
22,669 5.7%
3,447 11.6%
10.1%
7.0%
9.3%
6.4%
4.8%
6.1%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
11,943
13,543
14,794
16,157
17,616
20,949
31,045
44,099
61,243
79,945
95,750
112,371 11.9%
7.7%
5.0%
8,058
3,587
299
9,287
3,917
339
10,276
4,149
370
11,385
4,367
404
12,586
4,590
440
15,198
5,228
524
23,506
6,763
776
33,937
9,060
1,102
47,383
12,329
1,531
63,031
14,915
1,999
76,729
16,628
2,394
91,422 13.5%
18,140 7.8%
2,809 11.9%
8.4%
5.7%
7.7%
5.4%
3.7%
5.0%
HIGH CASE
('000 teu)
Of which:
FY44
CAGR
20102015
CAGR CAGR
2015- 2025
2025
on
LOW CASE
('000 teu)
Of which:
FY44
CAGR
20102015
CAGR CAGR
2015- 2025
2025
on
182
Table 8.6
Breakdown of forecast gateway teu, Pakistan, 2010-2044
(000 teu)
BASE CASE
CAGR
20102015
CAGR
20152025
CAGR
2025
on
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44

1,636
333
50
1,871
354
57
2,062
360
62
2,270
365
68
2,494
367
73
3,012
363
87
4,418
477
126
6,135
662
174
8,318
898
236
10,589
1,143
301
12,422
1,341
353
14,584
1,574
414
13.0%
1.7%
11.4%
7.4%
6.2%
7.3%
4.7%
4.7%
4.7%
Total
2,020
2,282
2,484
2,702
2,935
3,462
5,021
6,971
9,452
12,033
14,116
16,573
11.4%
7.3%
4.7%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44

1,636
333
50
1,878
355
57
2,076
363
63
2,325
374
69
2,581
380
76
2,872
384
83
4,978
537
141
7,000
756
199
9,621
1,039
273
12,421
1,341
353
14,735
1,591
419
17,498
1,889
497
11.9%
2.9%
10.6%
9.3%
7.0%
9.1%
4.9%
4.9%
4.9%
Total
2,020
2,290
2,501
2,767
3,036
3,340
5,657
7,954
10,933
14,115
16,745
19,884
10.6%
9.1%
4.9%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on

1,636
333
50
1,867
353
57
2,052
359
62
2,255
362
67
2,473
364
73
2,973
359
85
4,320
466
123
5,943
642
169
7,983
862
227
10,069
1,087
286
11,723
1,266
333
13,659
1,475
388
12.7%
1.5%
11.1%
7.2%
6.0%
7.0%
4.5%
4.5%
4.5%
Total
2,020
2,277
2,473
2,684
2,909
3,417
4,909
6,753
9,072
11,443
13,322
15,522
11.1%
7.0%
4.5%
HIGH CASE
CAGR
20102015
CAGR
20152025
CAGR
2025
on
LOW CASE
183
Table 8.7
Breakdown of forecast gateway teu, west coast India, 2010-2044
(000 teu)
BASE CASE
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
4,642
5,335
5,975
6,637
7,345
8,784
13,303
19,071
25,555
34,210
41,846
49,650
13.6%
8.1%
5.2%
621
644
645
634
612
732
1,109
1,589
2,130
2,851
3,487
4,138
3.4%
8.1%
5.2%
135
153
170
186
204
244
370
530
710
950
1,162
1,379
12.6%
8.1%
5.2%
5,397
6,132
6,790
7,457
8,161
9,760
14,781
21,190
28,394
38,011
46,495
55,167
12.6%
8.1%
5.2%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
4,642
5,353
6,015
6,797
7,599
9,274
14,988
21,759
29,560
40,127
49,640
59,572
14.8%
8.9%
5.4%
621
646
649
649
633
773
1,249
1,813
2,463
3,344
4,137
4,964
4.5%
8.9%
5.4%
135
154
171
191
211
258
416
604
821
1,115
1,379
1,655
13.8%
8.9%
5.4%
5,397
6,153
6,836
7,637
8,443
10,304
16,653
24,177
32,845
44,586
55,156
66,191
13.8%
8.9%
5.4%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
4,642
5,322
5,948
6,593
7,280
8,672
13,007
18,473
24,527
32,530
39,492
46,502
13.3%
7.9%
5.0%
621
642
642
630
607
723
1,084
1,539
2,044
2,711
3,291
3,875
3.1%
7.9%
5.0%
135
153
169
185
202
241
361
513
681
904
1,097
1,292
12.3%
7.9%
5.0%
5,397
6,117
6,759
7,407
8,089
9,635
14,452
20,526
27,253
36,144
43,880
51,669
12.3%
7.9%
5.0%

Total
HIGH CASE

Total
LOW CASE

Total
184
Table 8.8
Breakdown of forecast gateway teu, south coast India, 2010-2044
(000 teu)
BASE CASE
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
286
336
383
443
489
622
1,035
1,572
2,048
2,306
2,796
3,328
16.9%
9.7%
4.0%

428
484
507
539
548
567
735
900
932
817
791
728
5.8%
4.7%
-1.1%
18
21
23
25
27
30
45
63
76
80
92
104
10.7%
7.6%
2.6%
Total
732
841
913
1,008
1,064
1,220
1,815
2,536
3,057
3,203
3,679
4,160
10.7%
7.6%
2.6%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
286
338
386
454
506
657
1,166
1,794
2,369
2,705
3,317
3,993
18.1%
10.6%
4.3%

428
485
510
552
567
599
828
1,027
1,079
958
938
873
6.9%
5.5%
-0.8%
18
21
23
26
28
32
51
72
88
94
109
125
12.0%
8.4%
2.9%
Total
732
844
919
1,032
1,101
1,288
2,045
2,893
3,536
3,757
4,364
4,991
12.0%
8.4%
2.9%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
286
336
382
440
485
614
1,012
1,523
1,966
2,193
2,639
3,117
16.6%
9.5%
3.8%

428
482
504
536
543
560
719
872
895
777
746
682
5.5%
4.5%
-1.3%
18
21
23
25
26
30
44
61
73
76
87
97
10.5%
7.4%
2.5%
Total
732
839
909
1,001
1,055
1,204
1,775
2,456
2,934
3,046
3,472
3,896
10.5%
7.4%
2.5%
('000 teu)
HIGH CASE
('000 teu)
LOW CASE
('000 teu)
185
Table 8.9
Breakdown of forecast gateway teu, east coast India, 2010-2044
(000 teu)
BASE CASE
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
537
655
781
912
1,082
1,496
2,881
4,976
9,233
14,055
18,422
23,274
22.7%
12.8%
8.5%

1,209
1,340
1,459
1,558
1,694
1,976
2,737
3,845
5,771
7,027
7,609
7,811
10.3%
6.9%
3.8%
45
51
57
63
71
89
144
226
385
541
667
797
14.7%
9.8%
6.9%
Total
1,791
2,046
2,298
2,534
2,847
3,561
5,761
9,048
15,389
21,623
26,698
31,882
14.7%
9.8%
6.9%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
537
657
787
934
1,119
1,579
3,245
5,678
10,680
16,486
21,853
27,925
24.1%
13.7%
8.7%

1,209
1,344
1,469
1,596
1,753
2,086
3,083
4,387
6,675
8,243
9,026
9,372
11.5%
7.7%
4.1%
45
51
58
65
74
94
162
258
445
634
792
956
16.0%
10.6%
7.1%
Total
1,791
2,053
2,313
2,595
2,945
3,759
6,491
10,323
17,801
25,363
31,671
38,253
16.0%
10.6%
7.1%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
537
653
778
906
1,072
1,476
2,816
4,820
8,862
13,365
17,385
21,798
22.4%
12.6%
8.3%

1,209
1,337
1,452
1,548
1,679
1,951
2,676
3,725
5,539
6,682
7,181
7,316
10.0%
6.7%
3.6%
45
51
57
63
71
88
141
219
369
514
630
747
14.4%
9.6%
6.7%
Total
1,791
2,041
2,287
2,517
2,822
3,515
5,633
8,764
14,770
20,561
25,196
29,861
14.4%
9.6%
6.7%
('000 teu)
HIGH CASE
('000 teu)
LOW CASE
('000 teu)
186
Table 8.10
Breakdown of forecast gateway teu, Bangladesh, 2010-2044
(000 teu)
BASE CASE
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
54
60
65
70
76
90
641
1,047
1,384
1,710
1,951
2,274
10.7%
27.9%
4.2%

995
1,105
1,197
1,300
1,410
1,657
1,859
2,356
3,114
3,847
4,391
5,117
10.7%
3.6%
4.2%
27
30
32
35
38
45
64
87
115
142
163
190
10.7%
6.9%
4.2%
1,076
1,195
1,294
1,406
1,524
1,791
2,565
3,490
4,614
5,700
6,505
7,581
10.7%
6.9%
4.2%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
54
60
65
72
79
95
722
1,195
1,601
2,006
2,315
2,729
11.9%
28.9%
4.4%

995
1,109
1,205
1,332
1,459
1,749
2,095
2,688
3,602
4,513
5,208
6,139
11.9%
4.4%
4.4%
27
30
33
36
39
47
72
100
133
167
193
227
11.9%
7.7%
4.4%
1,076
1,199
1,302
1,440
1,577
1,891
2,890
3,982
5,337
6,686
7,716
9,096
11.9%
7.7%
4.4%
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
Total
HIGH CASE
('000 teu)
Total
LOW CASE
('000 teu)
54
60
64
70
76
88
627
1,014
1,328
1,626
1,842
2,130
10.4%
27.6%
4.0%

995
1,103
1,191
1,292
1,397
1,635
1,818
2,282
2,989
3,658
4,144
4,792
10.4%
3.4%
4.0%
27
30
32
35
38
44
63
85
111
135
153
177
10.4%
6.7%
4.0%
1,076
1,192
1,288
1,396
1,511
1,768
2,508
3,381
4,428
5,420
6,139
7,100
10.4%
6.7%
4.0%
Total
187
As the east coast of India is Colombo/Vizhinjams most important feeder market, Tables
8.11 and 8.12 provide a further breakdown of the forecast volumes. Market shares and
volume have been projected on the basis of existing ports (and expansions thereof e.g.
Kolkata/Haldia/Kulpi) and new/emerging ports grouped into two categories those near
Chennai and Visakhapatnam, respectively. It seems likely that Chennai and nearby ports
will continue to be the main focus of container traffic on the east coast.
8.5
Target market for Colombo & Vizhinjam 2010-2044

In view of the analysis in the previous section, the summation of container traffic on deep
sea via feeder calls is the total available target market for Colombo and the proposed
Vizhinjam port. Thus the total available market for both these transhipment hubs is the
estimated traffic on deep sea via feeder calls from Bangladesh, Pakistan and peninsular
India. Dynamics of the transhipment traffic would produce a certain share of traffic
Colombo & the proposed Vizhinjam port, other ISC ports (like JNPT, Chennai, Mundra,
etc) and other international ports outside ISC.
Average growth rates in total transhipment volumes in the base case scenario are 6.7%
p.a. for the period 2010-2015, decreasing to 5.8% per annum for the period 2015-2025
and then 4.3% per annum thereafter. In the high and low case scenarios, growth rates
vary accordingly (slightly more or less than the base case respectively). However, due to
the compounding effect over the long period of time of the forecast (30 years), these
differences lead to a wide variation in absolute volumes under each of the scenarios by the
end of the forecast period.
In FY10, there is an estimated 7.1 million teu of transhipment of ISC cargo at the various
hub ports competing for this business. Colombo, after strong growth in 2006, commands
approximately 38% share. In 2011, this share is expected to increase further on the back
of continued strong growth in activity at South Asia Gateway Terminal (SAGT), Colombo,
which is already evident. This growth in Colombos market share is at the expense of
competing hubs located outside of the ISC region. In the medium term, Colombos market
share is expected to strengthen a little further. The market share of hubs located within
the ISC region is expected to grow, as Indian ports such as Cochin, JNPT, Chennai and
Vizhinjam can be expected to carve out a share. Established ports such as JNPT, Chennai
& Ennore might also be able to increase their share if capacity allows. It is not possible to
say at this stage exactly what share each of these ports will gain, as in a number of cases
the timing and scale of these developments is unconfirmed.
Table 8.12 shows the forecast breakdown of ISC transhipment volumes by hub port for
those hubs located outside of the ISC region. In general there is no indication than any of
the established hubs will cease to be involved in serving the ISC region, or will lose their
market shares to any significant extent. As a result, ports such as Singapore, Klang and
Dubai are expected to remain key players. Middle Eastern hub such as Dubai and Khor
Fakkan, however, are expected to lose market share a little, as a result of the potential
emergence of new hub ports in the Middle East, notably the Hutchison operated Sohar
terminal which is newly opened.
188
Table 8.11
Forecast volumes of ISC transhipment activity at hub ports, 2010-2044
(000 Teu)
BASE CASE
CAGR
20102015
CAGR
20152025
CAGR
2025
on
38,736
6.7%
5.8%
4.3%
17,121
8.5%
6.5%
4.3%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
Total ISC transshipment
7,173
7,853
8,335
8,793
9,261
9,941
13,115
17,506
24,375
30,434
35,237
2,740
3,000
3,184
3,447
3,723
4,121
5,698
7,738
10,774
13,452
15,575
volumes at hubs
Of which:
Colombo/Vizhinjam
Other ISC "hubs"
294
322
350
413
482
547
787
1,050
1,462
1,826
2,114
2,324
13.2%
6.7%
4.3%
Hubs outside ISC
4,139
4,531
4,797
4,929
5,052
5,274
6,629
8,718
12,139
15,156
17,548
19,290
5.0%
5.2%
4.3%
Colombo/Vizhinjam
38.2%
38.2%
38.2%
39.2%
40.2%
41.5%
43.5%
44.2%
44.2%
44.2%
44.2%
44.2%
Other ISC "hubs"
4.1%
4.1%
4.2%
4.7%
5.2%
5.5%
6.0%
6.0%
6.0%
6.0%
6.0%
6.0%
Hubs outside ISC
57.7%
57.7%
57.6%
56.1%
54.6%
53.1%
50.6%
49.8%
49.8%
49.8%
49.8%
49.8%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Market shares
Note: Transshipment traffic estimates calculated by double counting the target market traffic
189
Table 8.11 (contd)

HIGH CASE
CAGR
20102015
CAGR
20152025
CAGR
2025
on
46,477
7.7%
6.7%
4.6%
21,008
9.8%
7.5%
4.6%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44

volumes at hubs
7,173
7,880
8,392
9,006
9,582
10,390
14,419
19,919
28,119
35,598
41,800
2,740
3,010
3,206
3,530
3,852
4,369
6,409
9,003
12,710
16,090
18,894
Of which:
Colombo/Vizhinjam
Other ISC "hubs"
294
323
352
423
460
509
721
996
1,406
1,780
2,090
2,324
11.6%
6.9%
4.6%
Hubs outside ISC
4,139
4,547
4,829
5,048
5,227
5,512
7,289
9,919
14,003
17,728
20,817
23,145
5.9%
6.1%
4.6%
Colombo/Vizhinjam
38.2%
38.2%
38.2%
39.2%
40.2%
42.1%
44.5%
45.2%
45.2%
45.2%
45.2%
45.2%
Other ISC "hubs"
4.1%
4.1%
4.2%
4.7%
4.8%
4.9%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
Hubs outside ISC
57.7%
57.7%
57.6%
56.1%
54.6%
53.1%
50.6%
49.8%
49.8%
49.8%
49.8%
49.8%
100.0%
100.0%
100.0%
100.0%
99.6%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Market shares
190
Table 8.11 (contd)

LOW CASE
CAGR
20102015
CAGR
20152025
CAGR
2025
on
36,280
6.5%
5.6%
4.1%
15,673
8.3%
6.1%
4.1%
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44

volumes at hubs
7,173
7,834
8,297
8,735
9,180
9,834
12,847
16,989
23,438
28,994
33,255
2,740
2,993
3,170
3,424
3,690
4,076
5,454
7,339
10,125
12,526
14,366
Of which:
Colombo/Vizhinjam
Other ISC "hubs"
294
321
348
411
477
541
899
1,189
1,641
2,030
2,328
2,540
13.0%
8.2%
4.1%
Hubs outside ISC
4,139
4,520
4,775
4,896
5,008
5,217
6,494
8,461
11,672
14,439
16,561
18,067
4.7%
5.0%
4.1%
Colombo/Vizhinjam
38.2%
38.2%
38.2%
39.2%
40.2%
41.5%
42.5%
43.2%
43.2%
43.2%
43.2%
43.2%
Other ISC "hubs"
4.1%
4.1%
4.2%
4.7%
5.2%
5.5%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
Hubs outside ISC
57.7%
57.7%
57.6%
56.1%
54.6%
53.1%
50.6%
49.8%
49.8%
49.8%
49.8%
49.8%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Market shares
191
Table 8.12
Forecast volumes of ISC transhipment activity by ports for hubs outside the ISC region, 2010-2044 (000 Teu)
BASE CASE
('000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
Singapore
1,449
1,586
1,679
1,725
1,768
1,846
2,320
3,051
4,249
5,305
6,142
6,752
5.0%
5.2%
4.3%
Port Klang
310
340
360
370
379
396
497
654
910
1,137
1,316
1,447
5.0%
5.2%
4.3%
Tanjung Pelepas
621
680
720
739
758
791
994
1,308
1,821
2,273
2,632
2,894
5.0%
5.2%
4.3%
1,101
1,201
1,266
1,296
1,324
1,376
1,697
2,223
3,095
3,865
4,475
4,919
4.6%
4.9%
4.3%
10
10
10
11
13
17
24
30
35
39
5.0%
5.2%
4.3%
Khor Fakkan
203
220
230
234
237
245
292
379
528
659
763
839
3.9%
4.5%
4.3%
Salalah
410
446
470
481
490
509
623
815
1,135
1,417
1,641
1,804
4.4%
4.8%
4.3%
Aden
17
18
19
20
20
21
27
35
49
61
70
77
5.0%
5.2%
4.3%
New hubs
21
32
43
54
66
79
166
235
328
409
474
521
30.8%
11.5%
4.3%
4,139
4,531
4,797
4,929
5,052
5,274
6,629
8,718
12,139
15,156
17,548
19,290
5.0%
5.2%
4.3%
Dubai
Fujairah
Total
192
Table 8.12 (contd)

HIGH CASE
FY30
FY35
FY40
FY44
CAGR
20102015
CAGR
20152025
CAGR
2025
on
(000 teu)
FY10
FY11
FY12
FY13
FY14
FY15
FY20
FY25
Singapore
Port Klang
Tanjung Pelepas
Dubai
Fujairah
Khor Fakkan
Salalah
Aden
New hubs
1,449
1,591
1,690
1,767
1,829
1,929
2,551
3,472
4,901
6,205
7,286
8,101
5.9%
6.1%
4.6%
310
341
362
379
392
413
547
744
1,050
1,330
1,561
1,736
5.9%
6.1%
4.6%
Total
621
682
724
757
784
827
1,093
1,488
2,100
2,659
3,122
3,472
5.9%
6.1%
4.6%
1,101
1,205
1,275
1,328
1,369
1,439
1,866
2,529
3,571
4,521
5,308
5,902
5.5%
5.8%
4.6%
10
10
10
11
15
20
28
35
42
46
5.9%
6.1%
4.6%
203
221
232
240
246
256
321
431
609
771
906
1,007
4.8%
5.3%
4.6%
410
448
473
492
507
532
685
927
1,309
1,658
1,946
2,164
5.4%
5.7%
4.6%
17
18
19
20
21
22
29
40
56
71
83
93
5.9%
6.1%
4.6%
21
32
43
56
68
83
182
268
378
479
562
625
31.9%
12.5%
4.6%
4,139
4,547
4,829
5,048
5,227
5,512
7,289
9,919
14,003
17,728
20,817
23,145
5.9%
6.1%
4.6%
193
Table 8.12 (contd)

LOW CASE
FY44
CAGR
2025
on
FY11
FY12
FY13
FY14
FY15
FY20
FY25
FY30
Singapore
1,449
1,582
1,671
1,714
1,753
1,826
2,273
2,961
4,085
5,054
5,796
6,324
4.7%
5.0%
4.1%
Port Klang
310
339
358
367
376
391
487
635
875
1,083
1,242
1,355
4.7%
5.0%
4.1%
Tanjung Pelepas
621
678
716
734
751
783
974
1,269
1,751
2,166
2,484
2,710
4.7%
5.0%
4.1%
1,101
1,198
1,261
1,288
1,312
1,362
1,663
2,157
2,976
3,682
4,223
4,607
4.3%
4.7%
4.1%
10
10
10
10
13
17
23
29
33
36
4.7%
5.0%
4.1%
Khor Fakkan
203
219
229
233
235
243
286
368
508
628
720
786
3.6%
4.3%
4.1%
Salalah
Fujairah
FY40
CAGR
20152025
FY10
Dubai
FY35
CAGR
20102015
('000 teu)
410
445
468
477
486
503
610
791
1,091
1,350
1,548
1,689
4.2%
4.6%
4.1%
Aden
17
18
19
20
20
21
26
34
47
58
66
72
4.7%
5.0%
4.1%
New hubs
21
32
43
54
65
78
162
228
315
390
447
488
30.5%
11.3%
4.1%
4,139
4,520
4,775
4,896
5,008
5,217
6,494
8,461
11,672
14,439
16,561
18,067
4.7%
5.0%
4.1%
Total
194
8.6
Vizhinjam transhipment traffic forecast 2010-2044

Table 8.13 shows a more detailed breakdown of a key element of Vizhinjams forecast
transhipment volumes, this being the south and east coasts of India, Bangladesh, west
coast of India and Pakistan. The first three feeder areas currently account for almost 75%
of Colombos transhipment activity.
In order to generate Table 8.13, the base case forecast scenario has been used. Forecast
feeder volumes into and out of Bangladesh are identified in previous tables of this report.
The total available market for Colombo and Vizhinjam of this business has been projected
forward from an estimated 20% in 2010 rising to a ceiling of 27.5% by 2017. This allows
the forecast target market for Colombo and Vizhinjam of Bangladeshs volumes to be
identified.
Forecast southern Indian feeder volumes are identified in Table 8.15. These have been
split into volumes specific to Cochin, Tuticorin and other Ports, this being new ports as yet
not certain. Whilst it is not clear which of these projects will proceed, it is likely that
something will happen, and so a generic category has been used. Cochins share of
southern Indian feeder traffic is projected to decline over time, as the new development at
Vallarpadam attracts direct calls. Tuticorin is expected to continue to account for the
largest share of southern Indian feeder volumes, although the newly emerging ports are
expected to be mainly feeder ports, at least to start with. The total share of Colombo and
Vizhinjam of these feeder volumes by port has then been assessed, and in all cases it is at
a high level due to the geographical advantage that Colombo/Vizhinjam has when acting
as a hub for southern Indian ports. This allows forecast of total available market for
Colombo & Vizhinjam for the southern Indian feeder volumes to be projected by port.
Forecast total volumes by port for the east coast of India are identified in tables below. For
each port, an assessment has been made at to what level of this traffic is feeder, now and
in the future. Collectively this provides the basis for the summary in tables below. Having
identified the feeder traffic for each port, Colombo & Vizhinjams share of this traffic has
been projected. This allows forecast Colombo/Vizhinjam east coast Indian feeder volumes
to be projected by port. The rest of the ISC feeder volume has been attributed to the West
coast of India and Pakistan.
All of this analysis is summarised in Table 8.16. There are several important points to note:
It must be noted that the analysis presented in Table 8.13-8.15 becomes increasingly
speculative as we go towards the end of forecast the further ahead you look as the
capacity of ports (and indeed their very existence in the case of new ports) becomes
less and less clear.
Some generic port groups have been used for the east coast in particular, i.e. the
volume is expected to move through ports in a general area, but it would be spuriously
accurate to try and attribute volumes to specific ports as the scale and existence of
specific ports cannot be predicted in the long term.
Feeder volumes at Cochin and Chennai are not expected to show large growth in the
long term, as direct services are expected to become the dominant way of serving
these ports. This is also expected to be the case at Kolkata/Haldia/Kulpi, but to a
lesser extent as even the new facilities at Kulpi will be draft restricted.
195
As the overall Indian container market grows, new spoke ports are expected to
emerge, and it is these that are expected to account for the majority of feeder traffic. In
time, several of these grow to the point where direct calls are expected to be viable,
and so the cycle moves on.
Paradoxically, in the long run, the west coast of India becomes an increasingly
important source of Colombos transhipment volumes. This is because most ISC subregions reach a point where direct services dominate. From this point onwards, the
main feeder markets directly reflect the size of the overall sub-market (rather than
being skewed by the direct calls vs. feeder balance in each sub-region). The west
coast of India is expected to remain the largest overall container market in the region,
and so in the long run will be the largest feeder market. This is of course significant for
Colombos long term marketing strategy.
Finally a common target market has been identified for both Colombo and Vizhinjam which
would be jointly contested by these ports. As per Drewry estimates and after detailed
primary survey of top liner service providers in the region, Vizhinjam would not be able to
take dominant share of this market due to following reasons :
The tariff charged by Colombo is almost one third of tariff charged by Indian ports. The
port further offers discount to major shipping line on the card rate. As discussed in
section for hub port economics, the average cost per Teu for transhipment through
Vizhinjam is costlier compared to Colombo, even when it matches port tariff charged
by Colombo. Therefore Drewry estimates if Vizhinjam has to compete with Colombo
and attract any minor share of total traffic, then it would have to provide at least 4050% discount on the card rate offered by Colombo for both vessel and cargo related
charges.
Colombo has as large hinterland market as the size of market handled by the Chennai
port. Therefore, if shipping lines move their services from Colombo to Vizhinjam, they
would lose share of large available hinterland market. The cost of feedering Colombo
traffic to the Vizhinjam port is very high; therefore it is not economically feasible to
continue such operations.
The immediate hinterland of Vizhinjam is very small therefore it would not be able to
provide critical mass to immediately start transhipment activities replicating current
services available at Colombo.
It might be a possibility that shipping lines which have smaller share in the hinterland
traffic of Colombo would shift some of their services to Vizhinjam.
Also, there might be limited services which pick up limited cargoes from Colombo and
primarily use the port to offload/load ISC transhipment cargo.
Therefore Drewry estimates that Vizhinjams share in the total available traffic would
be limited and have an upper cap of around 12%. However in the high case scenario it
has been increased to 15%.
196
Table 8.13
Projected transhipment traffic of ISC feeder volumes by port via Vizhinjam to 2044 Base case
Summary of Colombo/
Vizhinjam Feeder Target
Market
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY25
FY30
FY35
FY40
FY44
South coast India

Cochin
175,325
156,112
113,434
119,320
125,503
133,492
137,699
179,215
184,025
164,250
158,186
145,595
Tuticorin
262,987
289,921
340,301
357,959
376,508
400,476
413,098
537,646
552,076
492,751
474,557
436,786
342,993
353,698
364,654
386,112
398,887
406,092
439,360
658,455
1,174,031
1,365,456
1,365,456
1,365,456
136,912
195,577
261,090
324,460
384,732
436,621
389,100
598,937
1,107,070
1,665,946
2,142,474
Visakhapatnam
50,817
58,288
62,750
71,927
76,480
77,356
78,243
93,384
133,279
163,600
154,180
135,913
Other nr. Vizag
5,341
6,009
13,243
14,445
15,817
22,794
39,359
49,818
60,070
67,909
5,098
8,804
13,912
18,456
77,252
101,118
129,174
302,603
472,162
529,835
555,049
551,241
304,896
357,599
302,813
309,546
257,272
260,930
233,076
205,890
175,249
175,095
215,708
194,494
Other ports (e.g. Colachel)

East coast India
Chennai
Other nr. Chennai (e.g.
Ennore, Krishnapatnam)
Paradip/Dhamra
Kolkata/Haldia/Kulpi
Bangladesh
Chittagong/Mongla
Sub-total
West coast India &
Pakistan
359,496
398,410
438,977
481,851
498,975
505,961
508,848
620,318
810,633
1,022,878
1,207,408
1,407,149
1,501,612
1,759,743
1,837,758
2,012,269
2,148,580
2,284,601
2,391,938
3,009,405
4,139,751
5,070,753
5,856,561
6,447,017
359,834
300,527
420,724
408,755
410,073
411,468
457,219
859,442
1,247,090
1,655,187
1,930,825
2,113,589
5,386,841
6,725,940
7,787,386
8,560,605
Total feeder volumes
1,861,445
2,060,270
2,258,482
2,421,024
2,558,653
2,696,069
2,849,157
3,868,846
Transshipment volume
3,722,891
4,120,540
4,516,963
4,842,048
5,117,306
5,392,138
5,698,314
7,737,693 10,773,681 13,451,880 15,574,772 17,121,211
111,687
185,424
271,018
363,154
460,558
566,174
683,798
928,523
1,292,842
1,614,226
1,868,973
2,054,545
3%
5%
6%
8%
9%
11%
12%
12%
12%
12%
12%
12%
Vizhinjam's Traffic
Forecast
Vizhinjam's market share
in available market
197
Table 8.14
Projected transhipment traffic of ISC feeder volumes by port via Vizhinjam to 2044 High case
Summary of Colombo/
Market
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY25
FY30
FY35
FY40
FY44
South coast India

Cochin
181,395
163,160
119,760
127,255
135,212
145,286
151,397
203,913
212,289
192,119
187,650
174,691
Tuticorin
272,093
303,012
359,281
381,765
405,635
435,857
454,192
611,738
636,868
576,358
562,950
524,074
Other ports (e.g. Colachel)

East coast India
Chennai
354,868
369,668
384,992
411,791
429,745
441,969
483,067
749,197
1,354,349
1,583,893
1,583,893
1,583,893
143,094
206,485
278,454
349,561
418,722
480,056
442,722
690,927
1,294,911
1,976,251
2,570,629
Visakhapatnam
52,576
60,920
66,250
76,711
82,396
84,190
86,026
106,253
153,749
191,359
182,898
163,074
Other nr. Vizag
5,639
6,409
14,268
15,722
17,391
25,935
45,404
58,271
71,259
81,480

Paradip/Dhamra
5,274
9,201
14,688
19,683
83,229
110,052
142,024
344,304
544,681
619,735
658,434
661,401
315,452
373,745
319,702
330,133
277,175
283,983
256,262
234,263
202,165
213,300
273,228
251,200
Bangladesh
Chittagong/Mongla
Sub-total
West coast India & Pakistan
371,943
416,399
463,460
513,897
537,576
550,662
559,467
705,803
935,136
1,196,433
1,432,304
1,688,355
1,553,603
1,839,200
1,940,258
2,146,098
2,314,797
2,486,443
2,629,883
3,424,129
4,775,569
5,926,379
6,928,866
7,698,798
2,804,954
372,292
345,266
488,916
496,409
505,979
515,744
574,799
1,077,474
1,579,221
2,118,768
2,518,026
1,925,896
2,184,466
2,429,174
2,642,507
2,820,776
3,002,186
3,204,681
4,501,603
6,354,790
8,045,147
9,446,892 10,503,752
3,851,791
4,368,932
4,858,347
5,285,013
5,641,551
6,004,373
6,409,362
9,003,206 12,709,579 16,090,294 18,893,784 21,007,505
Vizhinjam's Traffic Forecast
115,554
196,602
291,501
396,376
507,740
630,459
769,123
1,350,481
1,906,437
2,413,544
2,834,068
3,151,126
Vizhinjam's market share in

available market
3%
5%
6%
8%
9%
11%
12%
15%
15%
15%
15%
15%
198
Table 8.15
Projected transhipment traffic of ISC feeder volumes by port via Vizhinjam to 2044 Low case
Summary of Colombo/
Market
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY25
FY30
FY35
FY40
FY44
Cochin
173,791
154,429
111,986
117,564
123,416
131,019
134,891
173,923
176,952
156,480
149,289
136,364
Tuticorin
260,686
286,796
335,957
352,693
370,247
393,058
404,674
521,769
530,855
469,441
447,867
409,093
South coast India
Other ports (e.g. Colachel )

East coast India
Chennai
339,991
349,885
359,999
380,432
392,254
398,570
430,400
639,011
1,128,905
1,308,131
1,308,131
1,308,131
135,436
193,080
257,249
319,064
377,606
427,717
377,610
575,916
1,054,699
1,572,251
2,006,638
Visakhapatnam
50,372
57,659
61,949
70,869
75,208
75,923
76,647
90,626
128,156
155,861
145,509
127,296
Other nr. Vizag
5,273
5,921
13,023
14,178
15,495
22,121
37,846
47,461
56,692
63,603
5,053
8,709
13,734
18,184
75,968
99,246
126,540
293,666
454,014
504,771
523,832
516,291
302,228
353,744
298,948
304,992
252,994
256,097
228,323
199,810
168,513
162,150
194,171
172,579

Paradip/Dhamra
Bangladesh
Chittagong/Mongla
Sub-total
West coast India &
Pakistan
356,350
394,115
433,373
474,762
490,677
496,589
498,471
601,999
779,474
974,490
1,139,502
1,317,933
1,488,471
1,740,773
1,814,300
1,982,666
2,112,851
2,242,285
2,343,158
2,920,535
3,980,630
4,833,483
5,537,243
6,057,929
356,685
297,287
415,354
397,155
379,821
360,970
383,659
749,116
1,081,965
1,429,308
1,645,891
1,778,521
5,062,595
6,262,791
7,183,134
7,836,450
1,845,156
2,038,060
2,229,654
2,379,821
2,492,672
2,603,255
2,726,817
3,669,651
3,690,312
4,076,119
4,459,309
4,759,642
4,985,343
5,206,510
5,453,634
7,339,303 10,125,190 12,525,582 14,366,268 15,672,900
110,709
183,425
267,559
356,973
448,681
546,684
654,436
880,716
1,215,023
1,503,070
1,723,952
1,880,748
3%
5%
6%
8%
9%
11%
12%
12%
12%
12%
12%
12%
Vizhinjam's Traffic
Forecast
Vizhinjam's market share
in available market
199
Table 8.16
Projected Vizhinjam container traffic 2014- 2044
(teu)
High
Year
FY 2014
FY 2015
FY 2016
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
FY 2031
FY 2032
FY 2033
FY 2034
FY 2035
FY 2036
FY 2037
FY 2038
Base
Gateway
(Loaded)
Gateway
(empty)
Transshipment
Total
27,129
38,566
50,986
66,727
82,796
100,131
106,562
133,958
149,116
167,372
181,799
197,183
220,660
246,285
274,470
305,448
339,476
365,409
389,489
415,086
442,295
471,218
497,083
524,319
552,999
11,627
16,528
21,851
28,597
35,484
42,913
45,670
44,653
49,705
55,791
60,600
65,728
73,553
82,095
91,490
101,816
113,159
91,352
97,372
103,771
110,574
117,804
124,271
131,080
138,250
115,554
196,602
291,501
396,376
507,740
630,459
769,123
940,484
1,120,117
1,198,329
1,272,637
1,350,481
1,447,038
1,553,054
1,665,149
1,783,611
1,906,437
2,014,779
2,110,048
2,208,697
2,310,779
2,413,544
2,494,853
2,577,618
2,661,842
154,310
251,697
364,338
491,700
626,020
773,503
921,356
1,119,095
1,318,938
1,421,492
1,515,036
1,613,392
1,741,252
1,881,434
2,031,108
2,190,876
2,359,071
2,471,541
2,596,909
2,727,554
2,863,647
3,002,567
3,116,207
3,233,017
3,353,090
Low
Gateway
Gateway
(empty)
Transshipment
Total
26,221
36,900
48,293
62,566
76,851
92,002
96,921
118,900
131,983
147,920
160,224
173,301
193,398
215,261
239,236
265,508
294,278
315,894
335,774
356,847
379,185
402,863
423,778
445,739
468,799
11,238
15,814
20,697
26,814
32,936
39,430
41,538
39,633
43,994
49,307
53,408
57,767
64,466
71,754
79,745
88,503
98,093
78,973
83,944
89,212
94,796
100,716
105,945
111,435
117,200
111,687
185,424
271,018
363,154
460,558
566,174
683,798
725,414
775,489
828,503
877,433
928,523
992,161
1,061,912
1,135,426
1,212,867
1,292,842
1,362,582
1,423,043
1,485,438
1,549,785
1,614,226
1,663,904
1,714,263
1,765,298
149,146
238,139
340,007
452,534
570,345
697,607
822,256
883,947
951,467
1,025,730
1,091,065
1,159,591
1,250,025
1,348,928
1,454,408
1,566,878
1,685,212
1,757,449
1,842,761
1,931,497
2,023,766
2,117,804
2,193,626
2,271,437
2,351,296
Gateway
Gateway
(empty)
Transshipment
Total
25,992
36,502
47,676
61,646
75,573
90,298
94,944
116,255
128,804
144,087
155,782
168,183
187,339
208,132
230,887
255,771
282,967
303,196
321,677
341,231
361,918
383,805
402,969
423,053
444,101
11,139
15,644
20,433
26,420
32,388
38,699
40,690
38,752
42,935
48,029
51,927
56,061
62,446
69,377
76,962
85,257
94,322
75,799
80,419
85,308
90,479
95,951
100,742
105,763
111,025
110,709
183,425
267,559
356,973
448,681
546,684
654,436
693,045
739,592
788,777
833,804
880,716
939,335
1,003,514
1,071,008
1,141,954
1,215,023
1,278,223
1,332,456
1,388,295
1,445,746
1,503,070
1,546,403
1,590,203
1,634,462
147,841
235,572
335,667
445,038
556,642
675,681
790,071
848,051
911,330
980,893
1,041,514
1,104,960
1,189,121
1,281,023
1,378,857
1,482,982
1,592,312
1,657,219
1,734,553
1,814,833
1,898,143
1,982,826
2,050,114
2,119,019
2,189,588
200
Table 8.16 (contd)

High
Year
Gateway
(Loaded)
Gateway
(empty)
Base
Low
Transshipment
Total
Gateway
Gateway
(empty)
Transshipment
Total
Gateway
Gateway
(empty)
Transshipment
Total
FY 2039
583,199 145,800
2,747,309
3,476,308
493,011
123,253
1,816,859
2,433,123
466,159
116,540
1,679,038
2,261,737
FY 2040
614,999 153,750
2,834,068
3,602,816
518,434
129,608
1,868,973
2,517,015
489,276
122,319
1,723,952
2,335,547
FY 2041
648,485 162,121
2,921,881
3,732,486
545,128
136,282
1,921,476
2,602,886
513,503
128,376
1,769,054
2,410,932
FY 2042
677,092 169,273
2,997,493
3,843,858
567,551
141,888
1,965,572
2,675,010
533,603
133,401
1,806,192
2,473,196
FY 2043
706,930 176,732
3,073,930
3,957,592
590,871
147,718
2,009,944
2,748,532
554,467
138,617
1,843,438
2,536,522
FY 2044
738,050 184,513
3,151,126
4,073,689
615,123
153,781
2,054,545
2,823,449
576,123
144,031
1,880,748
2,600,902
11.6%
11.5%
11.1%
9.1%
10.2%
10.3%
10.9%
8.9%
9.9%
10.0%
CAGR
11.6%
9.7%
Note: transhipment traffic includes double incidence

201
8.7
Vizhinjam Container traffic forecast by container size

Table 8.17 to 8.20 provides container traffic forecast for the Vizhinjam port by equipment
size -20 & 40 container units. The assumptions for arriving at the equipment split are
specified below.
Loaded-Empty Ratio
In terms of either loaded or empty boxes, a single rate tariff is charged for all
transshipment traffic in most of the hubs around the globe. However, terminal handling
charges for gateway traffic has varying rates for loaded and empty box handling.
Therefore, an estimate of loaded-empty ratio is pertinent only for revenue estimates from
gateway traffic.
In case of Vizhinjam, gateway container traffic forecast, it has been estimated that initially
with a low base of volumes from the hinterland, the port would witness high share of
empties in the initial years. The share of empty boxes has been estimated based on
current share of empty handled at the Tuticorin & Cochin ports. Both of these ports have
had witnessed a large share of empties in the overall traffic in the initial years however it
has gradually declined over the past few years. Still, the average share of empties at these
ports is amongst the highest in the country.
The share of empties in the overall traffic in all three scenarios has been assumed as
follows:Period
Empty Share
201-2020
30%
2021-2030
25%
2031-2044
20%
Equipment Size Ratio

A large share of transshipment traffic would be contributed by Indian ports. Therefore, the
equipment size split, i.e. 20:40 ratio is most likely to be similar to gateway traffic in India.
The current 20/40 split for gateway traffic at Indian ports is as follows:Equipment Size
Share
Teu
30%
Ffe
25%
However, as the gateway traffic would be generated from common hinterland currently
being served by the Cochin and Tuticorin port, the 20:40 ratio for gateway traffic is
assumed to have the ratio being witnessed at these ports.
Cargo
Equipment Size
Share
Loaded
Teu
56.4%
Empty
Ffe (x2)
43.6%
Teu
63.3%
Ffe (x2)
36.7%
202
Table 8.17
Vizhinjam container traffic 2014- 2044 by Equipment size Base Case
Year
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY25
FY30
FY35
FY40
FY44
20'
14,789
20,812
27,237
35,287
43,344
51,889
54,663
97,742
165,973
227,215
292,397
346,929
40'
5,716
8,044
10,528
13,639
16,754
20,057
21,129
37,780
64,153
87,824
113,019
134,097
Total Loaded Traffic (Boxes)
20,505
28,856
37,765
48,927
60,097
71,946
75,792
135,521
230,125
315,039
405,415
481,026
Total Loaded Traffic(Teu)
26,221
36,900
48,293
62,566
76,851
92,002
96,921
173,301
294,278
402,863
518,434
615,123
20'
7,114
10,011
13,101
16,973
20,849
24,959
26,293
36,566
62,093
63,753
82,042
97,343
40'
2,062
2,902
3,798
4,920
6,044
7,235
7,622
10,600
18,000
18,481
23,783
28,219
Total Empty Traffic (Boxes)
9,176
12,912
16,899
21,894
26,892
32,194
33,915
47,167
80,093
82,234
105,825
125,562
Total Empty Traffic (TEU)
11,238
15,814
20,697
26,814
32,936
39,430
41,538
57,767
98,093
100,716
129,608
153,781
Total Gateway Traffic (Boxes)
29,681
41,768
54,664
70,820
86,990
104,140
109,708
182,688
310,218
397,273
511,240
606,588
Total Gateway Traffic(TEU)
37,459
52,715
68,990
89,380
109,787
131,432
138,458
231,067
392,371
503,578
648,042
768,904
20'
53,684
89,127
130,268
174,555
221,373
272,140
328,677
446,307
621,422
775,900
898,347
987,545
40'
29,001
48,149
70,375
94,299
119,592
147,017
177,560
241,108
335,710
419,163
485,313
533,500
Total Transshipment Boxes
82,685
137,276
200,643
268,854
340,965
419,157
506,237
687,415
957,132
1,195,063
1,383,660
1,521,045
Total Transshipment Teus
111,687
185,424
271,018
363,154
460,558
566,174
683,798
928,523
1,292,842
1,614,226
1,868,973
2,054,545
Gateway Traffic
Gateway Loaded
Gateway Empty
Transshipment Traffic
203
Table 8.18
Vizhinjam container traffic 2014- 2044 by Equipment size High Case
Year
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY25
FY30
FY35
FY40
FY44
20'
15,301
21,751
28,756
37,634
46,697
56,474
60,101
111,211
191,464
265,767
346,859
416,260
40'
5,914
8,407
11,115
14,547
18,050
21,829
23,231
42,986
74,006
102,726
134,070
160,895
21,215
30,159
39,871
52,181
64,747
78,302
83,332
154,197
265,470
368,492
480,929
577,155
27,129
38,566
50,986
66,727
82,796
100,131
106,562
197,183
339,476
471,218
614,999
738,050
20'
7,360
10,462
13,832
18,102
22,461
27,164
28,909
41,606
71,629
74,570
97,324
116,796
40'
2,134
3,033
4,010
5,248
6,511
7,875
8,380
12,061
20,765
21,617
28,213
33,858
9,493
13,495
17,842
23,350
28,973
35,039
37,289
53,667
92,394
96,187
125,537
150,655
11,627
16,528
21,851
28,597
35,484
42,913
45,670
65,728
113,159
117,804
153,750
184,513
30,708
43,654
57,713
75,530
93,719
113,341
120,621
207,864
357,864
464,680
606,466
727,810
38,756
55,095
72,837
95,324
118,280
143,044
152,232
262,911
452,634
589,022
768,749
922,563
20'
55,542
94,499
140,114
190,524
244,052
303,039
369,690
649,127
916,355
1,160,103
1,362,234
1,514,632
40'
30,006
51,051
75,693
102,926
131,844
163,710
199,717
350,677
495,041
626,720
735,917
818,247
85,548
145,551
215,807
293,450
375,896
466,749
569,407
999,804
1,411,396
1,786,824
2,098,151
2,332,879
115,554
196,602
291,501
396,376
507,740
630,459
769,123
1,350,481
1,906,437
2,413,544
2,834,068
3,151,126
Gateway Traffic
Gateway Loaded
Gateway Empty
204
Table 8.19
Vizhinjam container traffic 2014- 2044 by Equipment size Low Case
Year
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY25
FY30
FY35
FY40
FY44
20'
14,659
20,587
26,889
34,768
42,623
50,928
53,549
94,855
159,593
216,466
275,952
324,934
40'
5,666
7,958
10,393
13,439
16,475
19,685
20,698
36,664
61,687
83,669
106,662
125,595
20,326
28,545
37,283
48,207
59,098
70,613
74,247
131,519
221,280
300,135
382,614
450,529
25,992
36,502
47,676
61,646
75,573
90,298
94,944
168,183
282,967
383,805
489,276
576,123
91,172
Gateway Traffic
Gateway Loaded
Gateway Empty
20'
7,051
9,903
12,934
16,724
20,502
24,497
25,757
35,487
59,706
60,737
77,428
40'
2,044
2,871
3,749
4,848
5,943
7,101
7,467
10,287
17,308
17,607
22,446
26,430
9,095
12,773
16,683
21,572
26,445
31,598
33,224
45,774
77,014
78,344
99,873
117,601
11,139
15,644
20,433
26,420
32,388
38,699
40,690
56,061
94,322
95,951
122,319
144,031
29,421
41,318
53,966
69,778
85,543
102,211
107,470
177,293
298,294
378,480
482,487
568,130
37,131
52,146
68,109
88,065
107,961
128,998
135,635
224,244
377,289
479,756
611,595
720,154
20'
53,214
88,166
128,606
171,584
215,665
262,771
314,564
423,328
584,017
722,471
828,641
904,007
40'
28,748
47,630
69,476
92,695
116,508
141,956
169,936
228,694
315,503
390,299
447,655
488,370
81,962
135,796
198,082
264,279
332,173
404,727
484,500
652,022
899,520
1,112,771
1,276,297
1,392,378
110,709
183,425
267,559
356,973
448,681
546,684
654,436
880,716
1,215,023
1,503,070
1,723,952
1,880,748
205
Vizhinjam Vessel Traffic Forecast
9. Vizhinjam vessel traffic forecast

Objective
Forecast Vessel traffic at Vizhinjam in base case scenario
Vessel size estimate at Vizhinjam port
Estimated parcel size during the forecast period
Key Findings
Colombo & Vizhinjam are wayport calls on mainline services currently serving on the
Asia Europe trade lane. As per current service profile, Colombo is a wayport for
most of the services on the East-West trade lane. This implies that although it has
mainline calls at the port, it is neither starting nor ending point on a service route.
Therefore, the average parcel size required for a mainline vessel is approximately 4050% of the overall capacity.
Conclusion
As per forecast in the base case scenario, it is estimated the total number of vessel calls
would increase from 2 calls/week in 2014 to 19 calls per week in 2044.
206
The container traffic forecast in the previous sections would provide guidance to the
expected vessel traffic at the Vizhinjam port over the forecast period. The size of the
vessels would depend upon the anticipated vessel size deployed on the East West trade
lane during the forecast period and it would also depend upon the parcel size, i.e.
container traffic generated by the port.
The indication of parcel size is the average container traffic available for a feeder vessel
and a mainline vessel. The size of vessel deployed would determine the average number
of vessels required to handle the container traffic at the port.
The ISC region is served by a multitude of different carriers, services and vessel sizes.
The three main distinctions are:
Wayport services mainline vessels making calls at ISC ports as part of services
passing through the region. In general, these are east-west services looking to add
ISC cargo to supplement the volumes being carried on an end-to-end basis (e.g.
Europe-Far East). The majority of these wayport calls are made at Colombo as
opposed to other ports in the region. The size of ships deployed on these services is
determined by the size of the end-to-end trade rather than the size of the ISC trade.
Direct call services mainline vessels operating end-to-end services which start/end
in the ISC and/or Middle East. Ship size on these routes is more a function of the size
of the ISC trade.
Feeder services linking ISC spoke ports with regional transhipment hubs.
Having described these distinctions, it is important to note that in practice, the reality is
more complex than this. For example, there are feeder services which call at several hub
ports, and so in theory have the potential to carry local intra-regional cargo as well as deep
sea cargo. Likewise there are services linking South East Asia with the Middle East which
call in the ISC. These services could carry deep sea cargo transhipped at, say Singapore
to, say JNPT, as well as carrying Singapore-UAE trade and Singapore-ISC trade.
Table 9.1 provides an indication of the current maximum and average ship sizes calling at
ISC ports for each of the three main categories. Not surprisingly, the wayport calls yield the
biggest ships, given that these vessels are on the second largest deep sea route in the
world (North Europe-Far East). However, Colombo does not see calls by the very biggest
ships which are passing its door. This is due to the current limitations of the port in terms of
draft, access and handling speeds/turnaround times. Nevertheless, Maersk S-class
vessels on the AE8 string are currently calling, and they are of 8,450 teu in size. It is
interesting to note is that the gap between the size of the largest ship calling at Colombo,
and the typical average sized ship is very large. After the Maersk S-class vessels, the next
largest ships currently calling are typified by the 6,700 teu units for MSC, and after that, the
size steps down again. The gap between Maersk vessels and the rest is perhaps a
reflection of how much bigger than other operators Maersk is (in terms of market share
and volumes carried).
It is interesting to note that at the moment, the largest vessels deployed on direct calls at
ports such as JNPT are not much smaller that the largest wayport callers that Colombo
sees. It is also noteworthy that, as with Colombo, the typical average sized ships calling at
JNPT are much smaller than the largest. Feeder vessels are of course much smaller, with
207
their size driven partly by the volumes on the particular route served, but more so by port
limitations at spoke ports.
Table 9.1
Summary of current vessel sizes calling at ISC ports
Largest Vessel
(Teu)
Type of Service
Typical Average
Sized Vessel (Teu) *
Wayport calls at Colombo
8,450 **
3,800-4,500
Direct calls (at ports such as JNPT)
6,250 ***
2,100-3,350
Feeder
2,113
700-1,100
*
Typical average vessel size varies according to trade lane
** Maersk S-class vessels on AE8 string
*** Maersk K-class vessels on ME1 Europe service
Source: Drewry
In terms of forecasting ship size, it is not possible to use a methodology which relates the
size of ship to the size of the trade. This is because the ISC is served in numerous ways
by a complex network of services comprising end-to-end services from the likes of Asia,
North America and Europe, wayport calls on east-west services, plus of course the
Arabian Gulf is rolled into the service patterns in almost all cases. As a result, it is not
possible to gain a clear picture of the way in which the size of ships calling at the likes of
JNPT has developed in relation to the volume of cargo being carried. However, it is clear
that ship sizes have increased significantly in the last few years. The Europe trade route
has seen the least increase in average ship size, but this can be at least partly explained
by the fact that historically, this route has always been one of strong volumes and large
consortia. In the North American trades, the upsizing of vessels is largely due to the
inclusion of calls at ports such as JNPT on pendulum services, i.e. services serving a
much larger market than just the Middle East/ISC. Far East services to and from the Mid
East/ISC have seen a similarly dramatic upsizing, and this is mainly due to the rapid
growth in Far East trade in the last few years which has spawned a number of new and
upgraded direct services.
Drewry estimates that in view of its parcel size and anticipated size of vessels deployed on
the East-West trade lane, the estimated size of mainline & feeder vessels deployed at
Vizhinjam would be as follows,
Table 9.2
Potential future vessel sizes calling at Vizhinjam port
Largest Vessel
Typical Average Sized Vessel**
(Teu)
(Teu)
Mainline vessel
12,000
6,000-9,000
Feeder vessel
3,000
1,000-1,500
Type of Service
208
Following assumptions have been taken into account to calculate the anticipated volumes
available for mainline and feeder vessels.
Feeder Mainline Ratio
The feeder versus mainline ratio at the proposed Vizhinjam port would be in same line as
currently being witnessed at the Colombo port. Currently, with the exception of intraregional traffic, the entire gateway traffic of the Colombo port is handled on the mainline
vessels. Drewry estimates a similar profile of vessels calling at the proposed Vizhinjam
port.
As the transshipment traffic forecast has been done by double counting the container
handling incidence at the Vizhinjam port, Drewry assumes the share of mainline-feeder
traffic at the port to be as follows:
Transshipment traffic would be brought in by feeder vessels to the port.
Entire gateway traffic of the port and transshipment volume would be carried on the
mainline vessels.
Capacity Deployed for Feeder Mainline Vessels
Feeder vessel capacity deployed has been taken into account considering an average
capacity utilisation from 80-100% for services deployed. For. Eg. A container vessel of
600 Teu capacity can have a parcel size of 1000 Teu with 500 Teu export moves and
500 Teu of import moves.
As per current service profile, Colombo is a wayport for most of the services on the
East-West trade lane. This implies that although it has mainline calls at the port, it is
neither starting nor ending point on a service route. Therefore, the average parcel size
required for a mainline vessel is approximately 40-50% of the overall capacity. For
example, if a 6,000 Teu vessel calls at the Colombo port then the average parcel size
expected would be close to 2,400 Teu 3,000 Teu per call. This could be 2,000 export
moves and 1,000 import moves for a 3,000 Teu parcel size.
Table 9.3 below shows the expected vessel traffic anticipated at the Vizhinjam port during
the forecast period in the base case scenario.
209
Table 9.3
Potential future vessel sizes calling at Vizhinjam port Base case scenario
Year
Gateway Traffic
(Teu)
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
FY32
FY33
FY34
FY35
FY36
FY37
FY38
FY39
FY40
FY41
FY42
FY43
FY44
37,459
52,715
68,990
89,380
109,787
131,432
138,458
158,533
175,977
197,226
213,632
231,067
257,864
287,015
318,981
354,010
392,371
394,867
419,718
446,059
473,981
503,578
529,723
557,174
585,998
616,264
648,042
681,410
709,438
738,588
768,904
Transshipment
Traffic (Teu)
111,687
185,424
271,018
363,154
460,558
566,174
683,798
725,414
775,489
828,503
877,433
928,523
992,161
1,061,912
1,135,426
1,212,867
1,292,842
1,362,582
1,423,043
1,485,438
1,549,785
1,614,226
1,663,904
1,714,263
1,765,298
1,816,859
1,868,973
1,921,476
1,965,572
2,009,944
2,054,545
Traffic on Feeder
Vessels (Teu)
Traffic on Mainline
Vessels (Teu)
55,843
92,712
135,509
181,577
230,279
283,087
341,899
362,707
387,745
414,252
438,716
464,262
496,081
530,956
567,713
606,434
646,421
681,291
711,522
742,719
774,893
807,113
831,952
857,132
882,649
908,430
934,486
960,738
982,786
1,004,972
1,027,273
93,303
145,427
204,498
270,957
340,066
414,519
480,357
521,240
563,722
611,478
652,348
695,329
753,945
817,971
886,695
960,444
1,038,792
1,076,158
1,131,239
1,188,778
1,248,874
1,310,691
1,361,675
1,414,306
1,468,647
1,524,693
1,582,528
1,642,148
1,692,224
1,743,560
1,796,177
Parcel Size Feeder Parcel Size Mainline

600
/Week
/ Week
Teu
1,074
1,783
2,606
3,492
4,428
5,444
6,575
6,975
7,457
7,966
8,437
8,928
9,540
10,211
10,918
11,662
12,431
13,102
13,683
14,283
14,902
15,521
15,999
16,483
16,974
17,470
17,971
18,476
18,900
19,326
19,755
1,794
2,797
3,933
5,211
6,540
7,972
9,238
10,024
10,841
11,759
12,545
13,372
14,499
15,730
17,052
18,470
19,977
20,695
21,755
22,861
24,017
25,206
26,186
27,198
28,243
29,321
30,433
31,580
32,543
33,530
34,542
0.00
1.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
1.00
1.00
1.00
1.00
1.00
1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Vessels Calls per Week

1000 1500 6000 9000
Total
Teu
Teu
Teu
Teu
1.00
1.00
1.00
1.00
2.00
2.00
3.00
3.00
3.00
3.00
3.00
3.00
4.00
4.00
4.00
4.00
4.00
5.00
5.00
5.00
6.00
6.00
6.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
3.00
3.00
4.00
4.00
4.00
4.00
4.00
4.00
1
1
2
2
2
2
2
2
3
3
3
3
3
3
3
4
4
4
4
5
5
5
5
5
5
5
5
6
6
7
7
0
0
0
0
0
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
3
2
3
5
5
6
7
8
8
9
9
9
10
11
11
11
12
12
13
13
14
15
15
16
16
16
17
17
18
18
19
19
210
Part II
211
Coal Traffic Forecast
10. Coal traffic forecast

This section intends to estimate the coal traffic potential for Vizhinjam port by locating coal
consumers like thermal power plant, integrated steel plant, cement plant and other small
coal consumers in the hinterland.
Key findings
Kerala does not have any coal-fired power plant and integrated steel plant, thereby
making it potentially smaller importer of both non-coking and coking coal.
The power demand in Kerala is met by hydel power plants, wind power plants and
diesel-based thermal power plants. With expected commencement of Kochi LNG in
20011-12 and pipeline connectivity with Krishna-Godavari basin also becoming a
reality, there has been increased focus on construction of gas-based power plants.
Therefore, coal import requirement of Kerala is expected to come down considerably.
Vizhinjam does not have much competitive advantage for any cement plant. At best it
can be port of second choice. Added to this, it is notable that coal consumption of the
cement plants is generally very low. It is in the region of 14%-20% of the clinker
production capacity. i.e. for every tonne of clinker (Clinker is grinded along with
gypsum to make cement) produced, coal required is between 140-200 kg depending
on calorific value and characteristics of the thermal power plant.
Total clinker production capacity in the primary and secondary hinterland is 5.32
million tonnes.
There are no cement plants in the primary hinterland of Vizhinjam port. Despite that
with proper rail and road connectivity, coal importers may still use Vizhinjam port as
the existing ports like Cochin and Tuticorin may have infrastructural constraints
leading to some sporadic coal cargo.
In base and high case scenario, total coal traffic at Vizhinjam port is estimated to be
stagnant at 0.14 and 0.71 million tonnes respectively.
212
Coal is one of the most important sources of energy, satisfying over 55% of energy needs
of the Indian economy. Coal demand in India originates mainly from power utilities, steel
plants, cement industries and many other small sectors like sponge iron units, pig iron
producers and fertiliser etc. The power sector is the biggest consumer of coal in India
accounting for more than 70% of coal demand. It is followed by Iron & Steel (9%) and
Cement Industry (5.4%). The coal requirement of power sector is met by domestic
production and import from Indonesia, South Africa and Australia. On the other hand
integrated steel plants rely mainly on imported coal due to lack of availability of high grade
coking coal domestically.
10.1
Coal import: Hinterland analysis

India imports both non-coking and coking coal to meet the supply deficit. Non-coking coal
import into India is mainly driven by the coast-based thermal power plants whereas coking
coal is imported by the integrated steel plants. In India, aggregate coal import has grown at
a CAGR of over 20% in the last five years with non-coking coal surpassing coking coal in
2004-05 and growing at a CAGR of 32% in the same time period. The demand for noncoking coal has grown tremendously mainly because of rapid growth in independent power
producers setting thermal power plants in the coastal areas.
There are three major competing ports in the primary and secondary hinterland of
Vizhinjam port namely Tuticorin, Cochin and New Mangalore. Coal imports at Cochin and
Tuticorin ports are mainly non-coking coal, the demand for which primarily originates from
the thermal power plants in the region. Besides thermal power plants Tuticorin especially
benefits from the captive industries in the adjoining areas namely Southern Petrochemicals
Industries Corporation (SPIC), Sterlite, Tuticorin Alkali Chemicals, Kilburn Chemicals and
Dharangdhara Chemical Works (DCW). On the other hand, Cochin port is served by
relatively small consumers of coal in the region namely cement plants and re-rolling mills.
This causes lower volume of coal imports through Cochin port (See Table 10.2).
Table 10.1
Import of coal: All India
(In million tonnes)
Coal
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
CAGR
12.99
16.93
16.89
17.88
22.03
24.00
13.06%
Non-Coking Coal
8.69
12.03
21.7
25.20
27.77
35.00
32.13%
Coke
1.89
2.84
2.62
4.69
4.25
2.00
1.14%
23.57
31.8
41.21
48.80
54.05
61.00
20.95%
Coking Coal
Total import
Source: Ministry of Coal, GOI
213
Table 10.2
Coal handled at Indian ports in the hinterland
(In tonnes)
Port
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
CAGR
Cochin
142,410
209,972
198,863
218,968
246,185
258,590
13%
5,266,000
5,374,000
6,146,000
5,608,000
6,112,000
5,713,000
2%
94,000
315,000
513,000
1,047,000
1,691,000
1,929,000
83%
Tuticorin
New Mangalore
Source: IPA, Port trust website
Kerala does not have any coal-fired power plant and integrated steel plant, thereby making
it potentially smaller importer of both non-coking and coking coal. Moreover, lower part of
Tamil Nadu also does not have any such industries which might be a likely user of the
proposed Vizhinjam port.
The power demand in Kerala is met by hydel power plants, wind power plants and dieselbased thermal power plants. With expected commencement of Kochi LNG in 20011-12
and pipeline connectivity with Krishna-Godavari basin also becoming a reality, there has
been increased focus on construction of gas-based power plants. Therefore, coal import
requirement of Kerala is expected to come down considerably.
Therefore, in effect cement plants are the only important coal consumer, which may use
the proposed Vizhinjam port. Figure 10.1 and Table 10.3 shows the existing cement plant
in Tamil Nadu and Kerala.
Figure 10.1
Cement plants in primary and secondary hinterland
1
2
Ennore 3
14 Chennai 4
1
5
2
6
11
3
7
12
13
8
4
Karikal
6
9
5
7
10
9
11
8
Kochi
15
12
10
13
Tuticorin
Vizhinjam
14
15
Grasim South, Reddipalayam

India Cements Dalavoi, Trichy
Madras Cements, Alathiyur
Tamil Nadu Cement, Ariyalur
Dalmia Cement, Dalmiapuram
Chettinad Cement, Karur
Chettinad Cement, Karikalli
Tamil Nadu Cement, Alangulam
Madras Cements, R.S. Raja Nagar
India Cements Sankarnagar, Tulaiyuth
India Cements, Sankaridurg
ACC Ltd., Madukkarai
Malabar Cements, Palghat
Ultra Tech Cement Ltd., - ARCW (G), Arakonam
Malabar Cements (G), Alappuzha
Note: G: Grinding Unit

Source: CMA
214
Table 10.3
List of cement plants in the primary and secondary hinterland
S.No.
Name of Cement
Company
Type
Malabar Cements Ltd* Integrated
Location
State
Annual
Installed
Cement
Capacity
(Million
Tonne)
Annual
Installed
Clinker
Capacity
(Million
Tonne)
Palghat
Kerala
0.42
0.59
Allapuzha
Kerala
0.20
Tamil Nadu
1.80
1.71
Imported coal
Tamil Nadu
0.40
0.38
Domestic coal
R.S. Raja Nagar, Tamil Nadu
1.80
1.71
Imported coal
Current
Source of
Coal
Domestic coal
Cement Plant
2
Malabar Cements Ltd. Grinding Unit

(G)
The India Cements
Integrated
Tulaiyuth,
Ltd.-Sankar Nagar
Cement Plant
Tirunelveli
Tamil Nadu Cements
Integrated
Alangulam
Corp. Ltd.
Cement Plant
Madras Cements Ltd. Integrated

Cement Plant
Coimbatore
Chettinad Cement
Integrated
Karaikal
Tamil Nadu
1.20
1.14
Domestic coal
Corporation Ltd.
Cement Plant
Chettinad Cement
Integrated
Karur
Tamil Nadu
0.60
0.57
Domestic coal
Corporation Ltd.
Cement Plant
Total integrated cement plant
5.60
5.32
Grinding Unit
0.20
Note: The plants of million tonne and above capacity operated at an average utilisation of 97%.
* Produces Clinker for Allapuzha unit as well
Source: CMA
Table 10.4 presents distance of various cement plants from the existing and proposed
port. It is evident from the Table that Vizhinjam does not have much competitive advantage
for any cement plant. At best it can be port of second choice. Added to this, it is notable
that coal consumption of the cement plants is generally very low. It is in the region of 14%20% of the clinker production capacity. i.e. for every tonne of clinker (Clinker is grinded
along with gypsum to make cement) produced, coal required is between 140-200 kg
depending on calorific value and characteristics of the thermal power plant. It means that a
cement plant with a million tonne clinker production capacity needs coal to the tune of
around 12-17,000 tonnes per month. This may not be an economical size of coal cargo
when the coal is imported from South Africa, Indonesia or Australia. As the coal
consumption is low, cement plants prefer to import coal via traders. They generally act as
consolidators for minor coal consumers. As the traders consolidate coal for small
consumers and import it via the ports nearest to the largest consumer, Vizhinjam might not
be a preferred port as most of the cement plants are located in the central and northern
part of Tamil Nadu and upper region of Kerala (see Figure 10.1).
215
Table 10.4
Distance matrix of key cement plants
Road
Name of
S.No. Cement
Company
1
Type
Location
State
Road Distance from

Tuticorin
Malabar
Cements Ltd.
Integrated
Karaikal
Vizhinjam
Chennai
Cochin
Palghat
Kerala
412
443
349
569
141
Cement
Plant
Malabar
Grinding
Cements Ltd. (G) Unit
Allapuzha
Kerala
279
576
162
752
52
The India
Integrated
57
457
151
631
289
Cement
Plant
Tulaiyuth,
Tirunelveli
Tamil Nadu
Cements Ltd.Sankar Nagar

Tamil Nadu
Integrated
Alangulam
Tamil Nadu
134
409
192
583
307
Cements Corp.
Ltd.
Cement
Plant
Madras Cements Integrated

Ltd.
Cement
Plant
R.S. Raja
Nagar,
Coimbatore
Tamil Nadu
393
433
418
537
215
Chettinad
Karaikal
Tamil Nadu
286
259
404
412
328
Karur
Tamil Nadu
297
226
433
312
326
Integrated
Cement
Cement
Corporation Ltd. Plant
7
Chettinad
Integrated
Cement
Cement
Corporation Ltd. Plant
Source: CMA and Drewry
Table 10.5
Cement production and consumption of Kerala
(Million tonne)
Capacity
Percentages
to All India
Total
Cement
Production
Percentages
to All India
Total
Cement
Consumption
Cement
& Clinker
Export
2004-05
0.62
(0.40)
0.56
(0.44)
6.13
2005-06
0.62
(0.39)
0.68
(0.48)
6.5
2006-07
0.62
(0.37)
0.62
(0.40)
6.98
2007-08
0.62
(0.31)
0.57
(0.34)
7.13
2008-09
0.62
(0.28)
0.60
(0.33)
7.89
CAGR
0.0%
Year
1.4%
5.2%
Source: CMA
216
10.2
Logistics cost analysis

Logistics cost analysis has been done for two competing ports namely Cochin and
Tuticorin. It has been compared with the proposed port at Vizhinjam for which no port cost
has been included. The infrastructure for Vizhinjam has been assumed to be better than
the existing ports. For example the coal discharge rate assumed to be between 50,000 to
60,000 tonnes per day as compared to the discharge rate of around 10,000 tonnes per day
for competing ports. The discharge has been assume dot very high as at lower handling
rate Vizhinjam port will not be competitive. The assumptions are listed below and the cost
break-up has been presented in Table 10.6.
It is evident from Table 10.6 that Vizhinjam Port will have cost advantage of USD 1 per
tonne over Cochin Port for the coal consuming locations which are around 100 km from
Vizhinjam and 50km from Cochin and Tuticorin. It is assuming that Vessel related and
Cargo related costs are nearly same as that of Cochin port. If Vizhinjam port can offer
some discount then total cost can be further lowered. On the other hand, for distance
disadvantage of around 100 km Vizhinjam may offer cost advantage of around USD 5 per
tonne as compared to Cochin Port with similar assumptions. For distance disadvantage of
over 200 km Vizhinjam will have cost disadvantage of over USD 5 per tonne. It implies that
Vizhinjam Port will be able to compete with the neighbouring ports only if it offers zero
tariffs to the coal importers.
Assumptions
Total cost estimated for Vizhinjam Port is without total port disbursement (vessel related and cargo
related exception being light dues)
Load Port Richards Bay Coal Terminal
A vessel is chartered on time charter basis
Vessel size (dwt)
60,000
GRT of the vessel
35,411
Cargo size (tonnes)
57,000
Tc rate (USD)
22,500
Inland cost per tonne per km
Exchange rate (INR/USD)
45
Design Speed (kn)
15
No. of hours in a day
24
MFO (tpd) - sea, loaded
34
MFO (tpd) - sea, ballast
31
MDO (tpd) - sea, loaded
1.7
MDO (tpd) - sea, ballast
1.7
MDO (tpd) - port (working cargo)
1.9
MDO (tpd) - Canal transit, loaded
22
MDO (tpd) - Canal transit, ballast
22
Price of MDO (USD per tonne)
664
Price of MFO (USD per tonne)
511
Light dues (INR per tonne)
217
Table 10.6
Logistics cost estimation for competitive port
Cost heads
Unit
Cochin
Tuticorin
Vizhinjam*
Distance between Load and

Discharge port
NM
Sailing time (days)
Days
Charter hire-Sailing
USD
Charter hire-Sailing
USD per tone
3.2
3.2
4.0
4.0
3.9
3.9
MFO-Loaded
Tonnes
272
272
341
341
336
336
MDO (tpd) - sea, Loaded
Tonnes
14
14
17
17
17
17
tpd
18
14
11
2,880
2,880
3,607
3,607
3,556
3,556
8.0
8.0
10.0
10.0
9.9
9.9
180,000 180,000 225,438 225,438 222,250 222,250
Fuel Consumption (tonnes)
Fuel Cost
MFO-Loaded
USD
MDO (tpd) - sea, Loaded
USD
138,992 138,992 174,078 174,078 171,617 171,617
USD
Total Fuel Cost
USD
Fuel cost
USD per tonne
Coal Discharge rate
tpd
9,030
11,985
9,030 11,310 11,310 11,150 11,150

8,989
7,191
5,993
1,438
1,027
160,008 157,011 192,579 191,380 184,205 183,794

2.8
6,000
2.8
3.4
3.4
3.2
3.2
8,000 10,000 12,000 50,000 70,000
Port operations
No. of days required to discharge
Days
9.5
7.1
5.7
4.8
1.1
0.8
Average pre-berthing time
Hours
12.0
12.0
26.0
26.0
4.0
4.0
Average non-working time at berth
Days
2.1
2.1
0.7
0.7
0.5
0.5
Total no. of days in port operations
Days
12.1
9.8
7.5
6.6
1.8
1.5
Total charter hire-Port operations
USD
Total charter hire-Port operations
USD Per tonne
Inland cost
USD per tonne
273,150 219,713 168,825 147,450 40,650 33,321

4.8
3.9
3.0
2.6
0.7
0.6
From Point A
50
From Point B
100
From Point C
200
From Point D
300
13
13
13
13
13
13
Port Cost
Vessel Related
Light dues
USD
Port dues
USD
10,133 10,133 10,133 10,133 10,133 10,133
Pilotage and Towage
USD
30,984 30,984 11,445 11,445
Berth Hire
USD
28,097 21,072 24,221 20,184
7,259
7,259
7,132
7,132
Cargo related
Wharfage
USD Per
tonne
1.2
1.2
0.8
0.8
Stevedoring
USD Per
tonne
3.9
3.9
5.8
5.8
Vessel and Cargo related cost
USD per tonne
Total cost from the point of

consumption (USD)
From Point A
50
19
18
20
20
10
10
From Point B
100
22
21
22
22
12
12
From Point C
200
26
25
27
26
17
17
From Point D
300
31
29
31
31
21
21
218
10.3

Assumptions:
No major coal-fired thermal power plants are expected in the hinterland of Vizhinjam
port.
No integrated steel plants are expected to be built in the hinterland of Kerala as it does
not have any advantage of either access to the primary raw materials iron ore, and
limestone or fuel coking coal.
Gas-based power plants are expected to be built in Kerala with increased availability
of gas through Kochi LNG plant and gas pipeline from Krishna-Goadavari Basin.
For every tonne of clinker production the coal requirement is assumed to be 170 kg.
There are no cement plants in the primary hinterland of Vizhinjam port. Despite that
with proper rail and road connectivity, coal importers may still use Vizhinjam port as
the existing ports like Cochin and Tuticorin may have infrastructural constraints
leading to some sporadic coal cargo.
It assumed that the cement plants with maximum distance disadvantage of around
200km may use Vizhinjam port.
Low case: Coal traffic is assumed to be zero as Vizhinjam has distinct disadvantage
of around 100 to 200 km consequently increased cost of INR200 to 400 per tonne at
Vizhinjam as compared to Cochin and Tuticorin.
Base Case: Despite distinct disadvantage, the importers of coal may still use
Vizhinjam port provided Vizhinjam can provide higher discharge rate (as compared to
discharge rate of 6,000 to 8,000 at Cochin and 10,000 to 12,000 tonnes per day) as
many a times the nearest may have traffic congestion.
Table 10.7
Coal traffic forecast for Vizhinjam Port
(Million tonne)
2009-10 2013-14 2018-19 2023-24 2028-29 2033-34 2038-39 2043-44
Capacity
Integrated Cement PlantsClinker production capacity
5.34
5.34
5.34
5.34
5.34
5.34
5.34
5.34
0.1
0.28
0.28
0.28
0.28
0.28
0.28
0.28
0.91
0.91
0.91
0.91
0.91
0.91
0.91
0.91
0.18
0.50
0.50
0.50
0.50
0.50
0.50
0.50
Other industries
Total
Other industries
Coal Requirement Integrated Cement PlantsClinker production capacity
Other industries
Low Case Coal
traffic forecast
219
Table 10.7 (contd)

2009-10 2013-14 2018-19 2023-24 2028-29 2033-34 2038-39 2043-44
Base Case Coal
traffic forecast
High Case Coal

traffic forecast
0.09
0.09
0.09
0.09
0.09
0.09
0.09
0.09
Other industries
0.02
0.05
0.05
0.05
0.05
0.05
0.05
0.05
Total
0.11
0.14
0.14
0.14
0.14
0.14
0.14
0.14
0.45
0.45
0.45
0.45
0.45
0.45
0.45
0.45
Other industries
0.09
0.25
0.25
0.25
0.25
0.25
0.25
0.25
Total
0.54
0.71
0.71
0.71
0.71
0.71
0.71
0.71
220
Steel Scrap Traffic Forecast
11. Steel scrap traffic forecast

This chapter looks at steel scrap traffic potential at Vizhinjam port.
Key findings
Steel Rerolling mills are the consumers of steel scrap in Kerala.
The steel requirement of Kerala is largely met from the Palghat-Coimbatore steel
rolling mills cluster, which houses around 200 re-rolling mills spread across the four
states of Tamil Nadu, Andhra Pradesh, Kerala, Karnataka & Pondicherry. This is
around 141 kms from Cochin and 348 km from Vizhinjam.
Vizhinjam has a distinct disadvantage in terms of attracting traffic mainly stemming

from cost disadvantage of around INR 400 per tonne assuming ceteris paribus.
Therefore, it is not expected that steel scrap will be imported through Vizhinjam port
except some sporadic cargo as a result of heavy congestion at Cochin.
221
Kerala does not have any iron ore deposit or any associated raw material deposit leading
to lack of development of integrated steel plant. Consequently, with the increasing
requirement of steel in the country and limitations of the main steel producers to meet this
growing demand, the secondary steel sector has emerged as an alternative and viable
source to meet the future steel requirements. Steel re-rolling is the most popular method of
producing finished steel. Almost all steel products made from steel are finished in the rerolling. Steel re-rolling mills use steel scrap. Therefore, Vizhinjam Port can attract steel
scrap to the requirement of re-rolling mills.
The steel requirement of Kerala is largely met from the Palghat-Coimbatore steel rolling
mills cluster, which houses around 200 re-rolling mills spread across the four states of
Tamil Nadu, Andhra Pradesh, Kerala, Karnataka & Pondicherry. This is around 141 kms
from Cochin and 348 km from Vizhinjam. Consequently, Vizhinjam has a distinct
disadvantage in terms of attracting traffic mainly stemming from cost disadvantage of
around INR 400 per tonne assuming ceteris paribus. At Cochin port total port cost (Vessel
related and Cargo related) of import is around INR 370 per tonne. Even if Vizhinjam
reduces its tariff to zero, still importers of steel scrap will be at disadvantage as they will
have to incur cost of around INR 30 per tonne over above Cochin port cost. Given this
scenario it is not expected that steel scrap will be imported through Vizhinjam port.
Table 11.1
Steel scrap consumers in the hinterland
Name of the company
Location
A.P. Steel re-rolling mill ltd.
Palakkad
Agni rerollins p. Ltd
Palakkad
Agni steels p. Ltd.
Ingur
Bannari amman steels (p) ltd.
Palakkad
Beepath casting pvt ltd
Palakkad
Bhoopathy steels (p) ltd.
Palakkad
Cps steel India pvt. Ltd
Palakkad
Gasha steels pvt. Ltd
Palakkad
Hadeed steels (p) ltd
Palakkad
Jaishankar steels (p) ltd
Aluva
Janatha steel mills p. Ltd.
Calicut
K.R. Alloys ltd
Thilangad, palakkad
Kairali steels & alloys p. Ltd
Palakkad
Kaypee metals & alloys (p) ltd
Kollam
Key yem steel re-rolling mill
Kannur
Kizhakkethil steel rolling mill
Kotayam
Koyenco iron & steel co. P. Ltd.
Calicut
Kuttippulan iron & steel company p. Ltd
Palakkad
Lal steels (p) ltd.
Palakkad
M.A. Steels (p) ltd
Palakkad
M.S. Steel re-rolling mills (p) ltd.

Mannarkkad steels pvt. Ltd.
Palakkad
Marutham steel industrial pvt. Ltd
Palakkad
Metrolla steels ltd.
Ernakulam
Minar alloys & forgings pvt. Ltd
Palakkad
222
Table 11.1 (contd)

Name of the company
Location
Minar ispat pvt. Ltd.
Calicu
Oavai alloys & steel p. Ltd
Tiruchengodu
P.P.S steels (kerala) pvt. Ltd
Kanjikode
P.V.H. Steel p. Ltd.
Calicut
Palakkad steels rolling mill
Palakkad
Paragon steels pvt. Ltd. Unit ii
Palakkad
Peekay re-rolling mills p. Ltd
Calicut
Premier alloys
Palakkad
Premium ferro alloys ltd.
Cochin
Prince firified steels (p) ltd
Kannur
Prince rolling pvt. Ltd.
Palakkad
Prince tmt steels (p) ltd.
Palakkad
Pvh re-rolling mills
Calicut
Scot free steels ltd.
Palakkad
Shastha steels pvt. Ltd
Palakkad
South malabar steels & alloys p. Ltd
Palakkad
Southern ispat ltd.
Palakkad
Sri padmabalaji steels (p) ltd
Palakkad
Steel max rolling pvt. Ltd
Palakkad
Sun ferromet p. Ltd
Kasargod
Surabhi seteel casting p. Ltd.
Palakkad
Surabhi steel rolling mills pvt. Ltd
Palakkad
Suryadev alloys & power p. Ltd.
Vishakapatnam
T.N. Auto & general engg. Co. P. Ltd
Wadakkanchery
Utility alloys p. Ltd.
Kerala
Vanchinad forgings (p) ltd
Kanjikode
World wide iron & steels pvt. Ltd
Palakkad district
Source: United Nations Development Programme
Table 11.2
Steel scrap handled at Indian ports in the hinterland
(In 000 tonnes)
Port
Cochin
2006-07
2007-08
2008-09
121
103
91
Source: Department of Statistics, Cochin Port trust
223
Fertilizer and FRM
12. Fertilizer and FRM

This chapter looks at the over all scenario of fertilizer imports in India. It also takes a
closer look at the demand of fertilizers and factors that may influence the import of
fertilizers oil in southern states of India, especially in Kerala and Tamil Nadu. Then we
derive the fertilizer traffic at the proposed Vizhinjam port under three scenarios low,
base and high.
Key findings
India produces a large chunk of its Urea demand, however raw materials and
intermediates for the same are largely imported. As for potash (K), since there are no
viable sources/reserves in the country, its entire requirement is met through imports.
Indias fertilizer production in 2008-09 declined to 32.9 million tonnes, whilst the
fertilizer imports increased to almost 14.3 million tonnes. This included imports of 6.9
million tonnes of Urea, 2.7 million tonnes of DAP, 4.4 million tonnes of MOP and 0.3
million tonnes of MAP.
Despite being the third largest producer of fertilizers, India is still far from being self
reliant to meet its fertilizer needs. Historically, India has been an importer of fertilizer.
Over last decade, Indias fertilizer production has remained almost stagnant.
As per our discussions with the various industry players and sector specialists,
fertiliser industry in India is going through a tough phase and the production capacity
is not increasing due to unavailability of economically viable feedstock.
Fertilizer plants in Kerala and Tamil Nadu are only operating at around 30% utilisation
rate. Once this utilisation rate goes up, after their connectivity to under construction
gas grid, demand for imported fertilisers may come down drastically in these states.
As per the base case forecast, fertiliser traffic is expected to reach up to 540,000
tonnes by the terminal year of forecast period.
224
12.1
Fertilizer and FRM
Introduction
Agriculture provides for the livelihood of about a third of Indias population. Its contribution
to Indias GDP is approximately 20%. All the five-year plans drafted by the Government of
India in the past have laid significant emphasis on self-sufficiency and self-reliance in food
grains production. Relentless efforts in this direction have resulted food grains production
increasing from 52 million tonnes in 1951-52 to about 230.78 million tonnes in 2007-08.
As of now, the country has achieved near self-sufficiency in production capacity of urea
with the result that India could substantially manage its requirement of nitrogenous
fertilizers through the indigenous industry. Similarly, adequate indigenous capacity has
been developed in respect of phosphate fertilizers to meet domestic requirements.
However the raw materials and intermediates for the same are largely imported. As for
potash (K) since there are no viable sources/reserves in the country, its entire requirement
is met through imports.
12.2
Historical analysis
Despite being the third largest producer of fertilizers, India is still far from being self reliant
to meet its fertilizer needs. Historically, India has been an importer of fertilizer. Over last
decade, Indias fertilizer production has remained almost stagnant (See Table 12.1).
Unavailability of raw materials has proven to be a major hindrance in increasing production
of phosphate (P) and potassic (K) fertilisers. In the absence of commercially viable potash
extraction in the country, the entire demand of potassic fertilizers is met through imports.
Further, the current pricing policy and increasing input costs have also discouraged
development of new production capacities, especially the availability of raw materials and
feed stock have proved to be a major hindrance.
Table 12.1
Indian fertiliser industry at a glance -Nutrient wise
(Million tonnes)
Year
All India Consumption Nutrient wise
All India Production Nutrient wise
Deficit
Total
Total
2000-01
10.9
4.2
1.6
16.7
10.9
3.7
14.7
-2.0
2001-02
11.3
4.4
1.7
17.4
10.7
3.8
14.5
-2.8
2002-03
10.5
4.0
1.6
16.1
10.5
3.9
14.4
-1.7
2003-04
11.1
4.1
1.6
16.8
10.6
3.6
14.2
-2.6
2004-05
11.7
4.6
2.1
18.4
11.3
4.0
15.3
-3.1
2005-06
12.7
5.2
2.4
20.3
11.3
4.2
15.5
-4.8
2006-07
13.8
5.5
2.3
21.7
11.5
4.4
16.0
-5.7
2007-08
14.4
5.5
2.6
22.6
10.9
3.7
14.6
-8.0
-10.6
2008-09
15.1
6.5
3.3
24.9
10.9
3.4
14.3
CAGR
4.1%
5.6%
9.8%
5.1%
0.0%
-1.1%
-0.3%
Above Table depicts nutrient-wise production and consumption

Source: Fertilizer Association of India
Primarily, India produces nitrogenous fertilisers but has to rely largely on imported raw
material for production of phosphate fertilisers, while potassic fertilisers are not being
produced in India at all. As per the provisional estimates, Indias fertilizer production in
2008-09 declined to 32.9 million tonnes, whilst the fertilizer imports increased to almost
225
Fertilizer and FRM
14.3 million tonnes. This included imports of 6.9 million tonnes of Urea, 2.7 million tonnes
of DAP, 4.4 million tonnes of MOP and 0.3 million tonnes of MAP. This shows that import
is now around 44% of the total production.
As per our discussions with the various industry players and sector specialists, fertiliser
industry in India is going through a tough phase. Despite growing demand, the production
capacity is not increasing due to unavailability of economically viable feedstock.
Table 12.2
Fertiliser consumption forecast for India
(Million tonnes)
K2O
P2O5
Total
(N,K,P)
Products
(All Fertilisers)
Annual
Growth
2008-09
15.1
3.3
6.5
24.9
52.3
10.4%
2009-10
15.6
3.0
7.0
25.6
53.8
2.8%
2010-11
15.9
3.1
7.3
26.3
55.2
2.6%
2011-12
16.3
3.3
7.6
27.2
57.2
3.6%
2012-13
16.8
3.5
7.9
28.2
59.2
3.5%
2013-14
17.2
3.7
8.3
29.2
61.2
3.5%
CAGR
2.7%
2.1%
4.9%
3.2%
Source: Fertilizer Association of India
Currently, urea is imported by fertilizer manufacturing and marketing companies through

three canalizing agencies i.e. Indian Potash Limited (IPL), Minerals and Metal Trading
Corporation (MMTC) and State Trading Corporation (STC). Canalising agencies and
Department of Fertilizers decide about the port of unloading for Urea imports, whilst for
other fertilizers the decision is taken by the importers i.e. Fertilizer manufacturing and
marketing companies. The port is primarily chosen on the basis of its proximity to the
actual consumption centres and the available infrastructure for handling and storing
fertilisers.
As per Drewrys discussion with the Fertiliser Association of India, Vizhinjam port under the
current circumstances does not offer any significant advantage over the other competing
ports in the region. One of the reasons for this is the port is sandwiched between two
major ports Cochin and Tuticorin- which already have sufficient capacity to handle more
fertilisers. Also, Vizhinjam offers distance advantage for a very limited territory which is not
amongst the highest fertilizer consuming areas in the hinterland. Table 7.3 gives district
wise break of fertilizer consumption in Kerala and Tamil Nadu.
226
Fertilizer and FRM
Table 12.3
Fertilizer consumption in Vizhinjams hinterland - 2008-09
(tonnes)
Nutrients (N,P,K) Consumption
All Fertilizer Consumption
Kerala
Allapuzha
Ernakulam
Idukki
Kannur
Kasargode
Kollam
Kottayam
Kozhikode
Malappuram
Palakkad
Pathanamthitta
Tiruvananthapuram
Thrissur
Wayanad
14,363
25,615
26,769
13,242
4,888
9,536
35,663
16,635
16,031
40,671
8,554
8,202
22,584
18,144
31,599
56,353
58,892
29,132
10,754
20,979
78,459
36,597
35,268
89,476
18,819
18,044
49,685
39,917
260,897
573,973
10,576
75,020
52,154
19,000
40,413
87,576
40,398
12,277
16,159
8,519
64,853
35,296
18,755
10,063
18,544
42,697
15,057
86,048
18,519
67,614
23,807
19,490
113,266
65,692
39,659
63,317
42,483
61,699
73,822
22,451
23,267
165,044
114,739
41,800
88,909
192,667
88,876
27,009
35,550
18,742
142,677
77,651
41,261
22,139
40,797
93,933
33,125
189,306
40,742
148,751
52,375
42,878
249,185
144,522
87,250
139,297
93,463
135,738
162,408
49,392
1,265,224
2,783,493
Total
Tamil Nadu
Ariyalur*
Coimbatore
Cuddalore
Dharmapuri
Dindigul
Erode
Kancheepuram
Kanyakumari
Karur
Krishnagiri
Madurai
Nagapattinam
Namakkal
Nilgiris
Perambalur*
Pudukottai
Ramanathapuram
Salem
Sivagangai
Thanjavur
Theni
Thoothukudi
Tiruchirapalli
Tirunelveli
Tiruvallur
Tiruvannamalai
Tiruvarur
Vellore
Villupuram
Virdhunagar
Total
Source: The Fertiliser Association of India
227
Fertilizer and FRM
Figure 12.1
Vizhinjams hinterland for fertilizer consumption
Kochi
Tuticorin
Vizhinjam
Primary hinterland
Secondary hinterland
Table 12.4
Fertiliser industry in Vizhinjams hinterland
(000 tonnes)
State
Plant
Kerala
FACT
Kerala
Tamil Nadu
FACT I
FACT II
MFL
Tamil Nadu
SPIC
Tamil Nadu
Tamil Nadu
TACF
Coimbatore
Pioneer
Fertilizers
Coromandel
International
Tamil Nadu
Total
Installed
Capacity Production
Location
Main Products
Utilisation
(As on
(2008-09)
01.11.2009)
Udyogamandal AS
228.0
128.7
56.4%
APS
148.5
115.8
78.0%
Cochin*
Urea
330.0
0.0
0.0%
Cochin
APS
485.0
489.2
100.9%
Manali
Urea
486.8
408.0
83.8%
UAP, NP(APS)/NPKs
840.0
0.0
0.0%
Tuticorin
Urea
620.0
0.0
0.0%
DAP, NP(APS)
606.1
6.2
1.0%
Tuticorin
ACI
105.0
0.0
0.0%
Coimbatore
SSP
48.0
21.9
45.6%
Ranipet
SSP, NP(APS)
132.0
89.9
68.1%
4,029.4
1,259.7
31.3%
228
Fertilizer and FRM
Currently, most of the fertiliser industry is using Naphtha as the feedstock. However, the
Government of India is making efforts to provide relatively cheaper feedstock in the form of
natural gas to the fertilizer industry. Table 12.4 lists major fertiliser industry in Tamil Nadu
and Kerala along with their production for 2008-09. As evident in the Table the utilisation
rate of these plants are abysmal at 31%, collectively.
While natural gas is a cheaper feedstock for the fertilizer industry, its availability in India at
competitive rates is a cause of concern. Steps are being taken to address the issue.
Figure 7.2 shows the gas connectivity network to various fertiliser units in the region.
Governments plan is to make the KG basin Gas available to fertilizer units. As depicted in
Figure 7.2, the gas would be transported to Manali, Tamil Nadu and Tuticorin via the
proposed pipeline. Also, there is 2.5 million tonnes per annum capacity LNG terminal
coming up in Kochi which will supply Gas to FACT I, which is currently under hibernation.
Figure 12.2
Proposed Gas connectivity to fertilizer Industry in the hinterland
Kakinada
Bangaluru
Mangalore
Manali
Approved RGTIL
Udyogamandal
Approved GAIL
Kochi
LNG Terminals
Tuticorin
Urea plants
Once all the fertilizer plants get access to the natural gas, utilisation rate of these plants
will go up by several notches and may even touch 100% in the next five years, which
indeed is the most likely scenario. In that case the reliance on imported fertiliser will also
come down drastically as the area under cultivation is not increasing at a brisk pace and
that is likely to keep a check on the growth of fertiliser consumption in the hinterland.
229
Fertilizer and FRM
Table 12.5
Fertiliser imports in Vizhinjams hinterland
(000 tonnes)
Year
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
CARG
Primary Competing Ports

Kochi
Tuticorin
Fertilizers
FRM
Fertilizers FRM
52
28
107
97
101
71
81
79
83
6.0%
630
577
517
534
403
495
646
561
364
-6.6%
423
332
284
147
182
297
484
678
1098
12.7%
791
884
776
880
854
944
1167
825
850
0.9%
Secondary Competing Ports

Chennai
New Mangalore
Fertilizers
FRM
Fertilizers FRM
686
460
459
420
412
572
701
654
585
-2.0%
472
714
534
422
470
411
414
380
266
-6.9%
172
198
248
249
239
354
662
972
831
21.8%
217
252
197
152
112
215
227
286
279
3.2%
Source: The Fertiliser Association of India
Over the last eight years, fertilizer imports at various ports serving Vizhinjams primary
hinterland have registered an average annual growth of 6%. This is well below the growth
in overall supply demand gap in the country. Fertiliser imported at Cochin and Tuticorin
largely serves Kerala and Tamil Nadu only due to their geographical positioning.
Table 12.6
Location
Ernakulam
Kozhikode
Tiruvananthapuram
Kollam
Pathanamthitta
Allapuzha
Kottayam
Idukki
Tirunelveli
Kanyakumari
Kochi
Tuticorin
New Mangalore
Vizhinjam
6
206
204
135
129
51
62
99
280
295
422
537
218
210
204
294
260
311
65
134
450
252
655
585
568
501
512
552
730
750
221
414
16
80
139
164
172
244
146
81
As per Drewrys assessment, Vizhinjams location may not allow it to serve a large
exclusive geographical area in terms of providing imported fertilizer at logistically
competitive rates. Table 12.6 gives a snapshot view of road connectivity to various
competing ports in the primary as well as secondary hinterland.
One aspect that may work in favour of Vizhinjam port vis--vis competing ports in the
region is if Vizhinjam port could develop a fertilizer bagging plant as well along with all
other facilities required for fertiliser handling. None of the competing ports in the region has
a fertiliser bagging plant on site and this could be an incentive for fertiliser importers to get
their cargo at Vizhinjam port.
Based on the scenarios discussed in the above paragraphs, Table 12.7 provides the
forecast fertilizer import volume for Vizhinjam port. The fertilizer traffic over the next two
decades at Vizhinjam could increase significantly as importers are keen to shift to the new
proposed facility if it provides efficient cargo handling and storage facility. According to
230
Fertilizer and FRM
major importers in the hinterland, for attracting fertilizer imports, Vizhinjam should provide
the following:
Deep draft of around 13-14 meters to facilitate handling of Panamax vessels.
A dedicated bagging plant on in the port area.
Good storage facilities.
Adequate rail and road connectivity for speedy evacuation of cargo.
Adequate cargo handling equipments to achieve a daily discharge rate of around 1012 thousand tonnes.
Ensuring that no contamination/damage takes place due to other dirty cargoes.
Table 12.7
Fertiliser imports forecasts for Vizhinjam
(Million tonnes)
Consumption
Year
Production
Share of imports
in Immediate
and Secondary Installed
Utilisation Production
Capacity
Hinterland
Deficit
%
Share
Quantity
Vizhinjam's Share in Total
Vizhinjam's
Imports in the Hinterland
Import Volume
Low
Base
High
Low
Base High
2008-09
3.1
4.0
31.0%
1.2
1.9
60%
1.1
0.0%
0.0%
0.0%
0.00
0.00
0.00
2009-10
3.3
4.0
31.0%
1.2
2.0
50%
1.0
0.0%
0.0%
0.0%
0.00
0.00
0.00
2010-11
3.4
4.0
31.0%
1.2
2.2
50%
1.1
0.0%
0.0%
0.0%
0.00
0.00
0.00
2011-12
3.6
4.0
40.0%
1.6
2.0
50%
1.0
0.0%
0.0%
0.0%
0.00
0.00
0.00
2012-13
3.7
4.0
50.0%
2.0
1.7
50%
0.8
0.0%
0.0%
0.0%
0.00
0.00
0.00
2013-14
3.8
4.0
70.0%
2.8
1.0
50%
0.5
0.0%
0.0%
2.0%
0.00
0.00
0.02
2014-15
3.9
4.0
80.0%
3.2
0.7
40%
0.3
0.0%
0.0%
2.0%
0.00
0.00
0.01
2015-16
4.0
4.0
85.0%
3.4
0.6
40%
0.3
0.0%
0.0%
5.0%
0.00
0.00
0.03
2016-17
4.2
4.0
85.0%
3.4
0.8
40%
0.3
0.0%
2.0%
5.0%
0.00
0.02
0.04
2017-18
4.3
4.0
85.0%
3.4
0.9
40%
0.4
0.0%
2.0%
5.0%
0.00
0.02
0.04
2018-19
4.4
4.0
85.0%
3.4
1.0
40%
0.4
0.0%
2.0%
5.0%
0.00
0.02
0.05
2019-20
4.5
4.0
85.0%
3.4
1.1
40%
0.4
0.0%
2.0%
5.0%
0.00
0.02
0.05
2020-21
4.5
4.0
85.0%
3.4
1.1
40%
0.5
0.0%
2.5%
5.0%
0.00
0.03
0.06
2021-22
4.6
4.0
90.0%
3.6
1.0
40%
0.4
2.0%
5.0%
10.0%
0.02
0.05
0.10
2022-23
4.7
4.0
90.0%
3.6
1.1
40%
0.5
2.0%
5.0%
10.0%
0.02
0.06
0.11
2023-24
4.8
4.0
90.0%
3.6
1.2
60%
0.7
2.0%
5.0%
10.0%
0.02
0.06
0.12
2024-25
4.9
4.0
90.0%
3.6
1.3
60%
0.8
2.0%
5.0%
10.0%
0.03
0.07
0.13
2025-26
5.0
4.0
90.0%
3.6
1.4
60%
0.9
2.0%
5.0%
15.0%
0.03
0.07
0.21
2026-27
5.1
4.0
90.0%
3.6
1.5
60%
0.9
2.0%
10.0%
15.0%
0.03
0.15
0.23
2027-28
5.2
4.0
90.0%
3.6
1.6
60%
1.0
5.0%
10.0%
15.0%
0.08
0.16
0.24
2028-29
5.3
4.0
90.0%
3.6
1.7
60%
1.0
5.0%
10.0%
15.0%
0.09
0.17
0.26
2029-30
5.4
4.0
90.0%
3.6
1.8
60%
1.1
5.0%
10.0%
15.0%
0.09
0.18
0.28
2030-31
5.5
4.0
90.0%
3.6
1.9
60%
1.2
5.0%
12.5%
20.0%
0.10
0.24
0.39
2031-32
5.7
4.0
90.0%
3.6
2.1
70%
1.4
5.0%
12.5%
20.0%
0.10
0.26
0.41
2032-33
5.8
4.0
90.0%
3.6
2.2
80%
1.7
5.0%
12.5%
20.0%
0.11
0.27
0.43
2033-34
5.9
4.0
90.0%
3.6
2.3
90%
2.1
5.0%
12.5%
20.0%
0.11
0.29
0.46
2034-35
6.0
4.0
90.0%
3.6
2.4
90%
2.2
5.0%
12.5%
20.0%
0.12
0.30
0.48
2035-36
6.1
4.0
90.0%
3.6
2.5
90%
2.3
5.0%
12.5%
20.0%
0.13
0.32
0.50
2036-37
6.2
4.0
90.0%
3.6
2.6
90%
2.4
5.0%
12.5%
20.0%
0.13
0.33
0.53
2037-38
6.4
4.0
90.0%
3.6
2.8
90%
2.5
5.0%
12.5%
20.0%
0.14
0.35
0.55
2038-39
6.5
4.0
90.0%
3.6
2.9
90%
2.6
5.0%
12.5%
20.0%
0.14
0.36
0.58
2039-40
6.6
4.0
90.0%
3.6
3.0
90%
2.7
5.0%
12.5%
20.0%
0.15
0.38
0.60
2040-41
6.8
4.0
90.0%
3.6
3.2
90%
2.8
5.0%
15.0%
20.0%
0.16
0.47
0.63
2041-42
6.9
4.0
90.0%
3.6
3.3
90%
3.0
5.0%
15.0%
20.0%
0.16
0.49
0.66
2042-43
7.0
4.0
90.0%
3.6
3.4
90%
3.1
5.0%
15.0%
20.0%
0.17
0.51
0.69
2043-44
7.2
4.0
90.0%
3.6
3.6
90%
3.2
5.0%
15.0%
20.0%
0.18
0.54
0.71
3.00%
1.83%
1.13%
2.98%
CAGR
2.36%
231
Fertilizer and FRM
Assumptions for Low case scenario
The average annual growth rate for fertiliser consumption in the hinterland over the
forecast period would remain at 2.3%. It is assumed that the existing plants will have
limited additional capacity to increase the production.
No major Greenfield projects would come up in the region, however, increase in

production may still be lagging growth in consumption thus increasing the demand for
fertiliser imports in the hinterland.
Market share of Vizhinjam port would remain at 5%, whilst the remaining traffic will be
handled at Kochi, Tuticorin and New Mangalore.
Assumptions for Base case scenario
No major Greenfield projects would be implemented, however, increase in production

may still be lagging growth in consumption thus increasing the demand for fertiliser
imports in the hinterland.
Market share of Vizhinjam port would increase to 15%, whilst the remaining traffic will
be handled at Kochi, Tuticorin and New Mangalore.
Assumptions for High case scenario
No major Greenfield projects would be implemented, however, increase in production

may still be lagging growth in consumption thus increasing the demand for fertiliser
imports in the hinterland.
Market share of Vizhinjam port would increase to 20%, whilst the remaining traffic will
be handled at Kochi, Tuticorin and New Mangalore.
232
Chemicals and Petro Products
13. Chemicals and Petro products

This chapter looks at the over all scenario of seaborne trade in chemicals and petro
products in India. It also takes a closer look at the demand for chemicals and petro
products in southern states of India, especially in Kerala. Then the chapter tries to project
chemical and petro products traffic at the proposed Vizhinjam port under three scenarios
low base and high.
Key findings
Chemical absorption as well as supply points in Kerala has been found to be limited.
Kochi Port is meeting the demand of Kerala at present.
Chemical traffic at Vizhinjam Port is expected to be 6,000 tonnes in the base case in
2013-14. During final years of the forecast, it is expected to be around 72,000 tonnes
reflecting a CAGR of 8.7% for 2013-14 to 2043-44.
Kochi Port is serving the Kerala for petro products. However, LPG is imported largely
at Mangalore Port and is moved to different consumption points in Kerala by rail
and/or by road.
On account of well developed storage and handling infrastructure at competing ports

and lack of industrial consumption centres in the narrow hinterland of the Vizhinjam
Port, POL traffic forecast for Vizhinjam Port has been more on the conservative side.
Under the base case scenario, POL traffic, excluding LPG, at Vizhinjam Port is
expected to be around 64,000 tonnes in 2013-14, which is expected to touch
1,051,000 tonnes in 2043-44.
It is expected that LPG storage and handling facilities would be operational at Kochi
Port by 2012; LPG inflow at Vizhinjam Port has not been taken into account. Industry
sources revealed that they would prefer rail/road movement from Kochi Port to
different consumption points down south from Kochi Port rather than to spend on
building LPG storage and handling infrastructure at Vizhinjam Port.
A few of the worlds leading tank farm owners have expressed interest in building
tank farms at Vizhinjam Port once basic infrastructure comes up at the Port.
233
13.1
Chemicals
13.1.1 Historical analysis
Indias Chemical Industry is concentrated largely in the western part of the country,
mainly in the states of Maharashtra and Gujarat, while on eastern part it is
concentrated in West Bengal and Tamil Nadu.
The Indian chemical sector accounts for about 17.6% in the output of manufacturing
sector, around 14.0% in total exports and 8.0-9.0% in total imports of the country.
However, India constitutes a relatively small portion of the global market with 1.9% of
global sales and 1.5% of international trade.
Though India is the 12th largest chemical producer, low per capita consumption and
infrastructural bottlenecks have prevented the full realization of the existing potential.
The Chemicals industry in India is fragmented with few large companies dominating
the market play, which is plagued by regional imbalances.
The Indian chemical and petrochemicals industry produces a wide range of products.
Due to their price competitiveness and large domestic market, this sector has
tremendous potential for growth in the coming years and given facilitative
environment, it could emerge as a major foreign exchange earner.
The snapshot of the Indian chemical and petrochemicals industry is illustrated in the
Table 13.1.
It can be observed, that the production of petrochemicals is growing at a CAGR of

7.6%, as compared to chemical production which has been growing at a CAGR of
5.8% from 1999-00 to 2005-06.
On the contrary, chemical consumption is growing at a CAGR of 7.1% as compared to

the petrochemical consumption, which is growing at a CAGR of 6.1%.
Petrochemical exports have shown an impressive growth rate of 27.0% over the
period 1999-06. However, more than 90% of these exports occur on the west coast of
India, with Reliance alone accounting for the major chunk.
Expressed in Rupee terms, while Indias exports reflected a CAGR of 20.8% p.a.
during 2002-2009, chemical exports surged by 20.1% p.a. During the same time
period, petrochemical exports witnessed a CAGR of 14.7% p.a.
Share of chemicals in total exports expressed in Rupee terms was 9.2% in 2008-09,
while it was 1.7% for petrochemicals.
234
Table 13.1
Performance of Indian Chemicals and Petrochemicals Industry (000 tonnes)
Production
Chemicals
Imports Exports
Consumption
Production
Petro Chemicals
Imports Exports
Consumption
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
5,455
5,709
5,963
6,612
7,066
7,375
7,641
464
370
743
725
930
914
1,530
233
327
277
435
478
1,201
581
5,686
5,752
6,429
6,902
7,518
7,088
8,590
4,817
5,663
6,235
6,553
7,006
7,349
7,467
772
423
689
714
818
828
1,167
239
544
702
972
1,037
1,270
1,005
5,350
5,542
6,222
6,295
6,787
6,907
7,629
CAGR
5.8%
22.0%
16.4%
7.1%
7.6%
7.1%
27.0%
6.1%
Source: Ministry of Chemicals and Fertilisers
Kerala accounted for 2.8% of Chemical production in India in 2005-06, while only
0.6% of petrochemical production. Tamil Nadu, on the other hand, accounted for 6.0%
of the total chemical production and approximately 2.5% in petrochemical production
in the same fiscal year.
Table 13.2
State wise share of Chemicals Industry (2006-07)
States
Share
Gujarat
Maharashtra
Uttar Pradesh
Tamil Nadu
Punjab
Rajasthan
Madhya Pradesh
Andhra Pradesh
Kerala
Other states and Union Territory
51.4%
7.5%
7.5%
6.0%
4.3%
4.2 %
3.8%
3.6%
2.8%
8.8%
Table 13.3
State wise share of Petrochemical Industry (2006-07)
States
Share
Gujarat
Maharashtra
West Bengal
Uttar Pradesh
Tamil Nadu
Haryana
Andhra Pradesh
Dadar & Nagar Haveli
Punjab
Kerala
Other states and Union Territory
61.9%
14.8%
10.7%
4.2%
2.5%
1.7%
0.8%
0.7%
0.6%
0.6%
5.1%
235
13.1.2 Hinterland mapping
Chemical and petrochemical industries in Tamil Nadu are located primarily in

Chennai, Cuddalore and Tuticorin. Major upcoming projects are also either located at
these locations or are clustered around these major manufacturing hubs.
Major chemical and petrochemical manufacturing units are located in and around
Kochi and Ernakulam in Kerala. Planned capacity additions are also being envisaged
primarily in and around port city of Kochi.
Figure 13.1
Primary and secondary hinterland mapping
Kochi
Tuticorin
Vizhinjam
Primary hinterland
13.1.3 Key Findings
In India, the major sea ports used for importing chemicals are Visakhapatnam,
Kakinada, Chennai, Cochin, Kandla, Mumbai and Nhava Sheva.
It is noted that the majority of chemical imports for industries in the hinterland are
coming at Kochi, Chennai and Tuticorin.
236
The quantum of traffic at competing ports (Kochi, Chennai and Tuticorin) and inputs
from industry sources suggest that only chemical imports are significant, while exports
are insignificant relatively.
Chemical imports at Chennai are largely meant for consumption at local industries
near Chennai (like Manali Petrochemical Ltd.), with a small share being transported to
Drug and Pharmaceutical companies near Hyderabad. But imports are mainly in
containerised form.
Manali, in the outskirts of Chennai, has emerged as a major petrochemical complex in

Tamil Nadu. Chennai Refinery Limited has given rise to many petro-based units using
refinery feedstock for the manufacture of a large number of petrochemicals like
polyols, nylon chips, and polybutanes as well as fertilizers in and around Chennai.
Major chemicals and fertilizer plants have also been established at Cuddalore and
Tuticorin. Upcoming projects like, Nagarjuna Refineries at Cuddalore, Ennore LNG
terminal and Petchem Park being developed by TIDCO, etc., are also close to
Chennai, Ennore or Tuticorin port(s). It is unlikely that the existing or planned projects
in this region shift their port base to any other port than they are currently using.
Imports into as well as exports of chemicals from Kerala has been very limited
historically. Most of the refineries and petrochemical units (such as HOCL, Kochi
Refinery, Fertilizer and Chemicals Travancore Limited, etc.) are located in and around
Kochi and/or Ernakulam, which are being served by Kochi port at present. In fact,
major upcoming projects in this sector can easily be served by Kochi port because of
their close proximity. Even quantity demanded by Kerala Metals and Minerals Limited
located near Kollam are not sizeable (like 24,537 tonnes per annum of Hydrochloric
Acid, 8,043 tonnes of liquid chlorine in containers, etc.), and are being met through
containerised cargoes largely.
Manufacturing sector in Kerala is being dominated by rubber, coir and agroprocessing industries. Key thrust areas for future development for Kerala government
is on services sector in general and IT/ITES and tourism sectors in particular. At the
same time, tourism is a major revenue earning source for the Kerala government, and
so there seems to be clear policy hindrance in developing chemical and petrochemical
industries in the State. Land availability and environmental issues also seem to be a
big hindrance in the development of large scale industries.
13.1.4 Traffic at competing ports
It can be observed from Table 13.4 that over the period of six years chemical imports
from Kochi port has shown a CAGR of 20.8% (though with yearly fluctuations), while
exports reflect a CAGR of 16.1%. Chemical cargo unloaded at Kochi Port constituted
a mere 0.9% of the total cargo imported (including coastal cargoes) at the Port; while
cargo loaded was 1.4% of the toal outflow.
Chemical traffic at Chennai Port, on the other hand, has shown CAGR of 6.3% in
chemical imports during 2001-08, while exports declined over the years to nil in 200708. In spite of healthy CAGR, chemical imports accounted for only 0.6% of the total
import at the port (including coastal traffic) in 2007-08; while exports from the Port
came down to zero. Coastal traffic inflow at Chennai port was 0.4% of the total coastal
traffic in 2007-08, but loading was nil during the same year.
237
Chemical imports at Tuticorin has been declining since 2001-02 and was nil during the
last two reported years in Table 13.4. Exports picked up slowly to peak in 2008 with
zero imports in between during 2005-07.
In 2007-08, Chennai had the highest import volume followed by Kochi, while Tuticorin
led in exports among competing ports, including coastal movements.
Chemical exports and imports at competing ports, including coastal movements, have
been less than 1.0% of the total cargo imported on these ports during 2001-08; except
for exports touching 1.2% of the total cargo exported from these ports in 2007-08.
Table 13.4
Chemical traffic at competing ports*
(000 tonnes)
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
Import Export Import Export Import Export Import Export Import Export Import Export Import Export
Kochi
37
20
54
22
18
33
23
64
26
46
181
115
Chennai
139
56
169
54
151
205
22
275
42
261
25
200
49
0
Tuticorin
156
57
102
37
101
82
78
70
73
367
*Including coastal movements.

Source: Transport Research Wing, Department of Shipping; Ministry of Shipping, Road Transport and Highways.
Table 13.5
Competing ports chemical traffic as compared to Indias traffic
(000 tonnes)
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
Total Import
2,342
1,193
2,713
3,047
3,121
3,657
5,958
Total Export
309
370
320
444
457
934
1,215
2,651
1,563
3,033
3,491
3,578
4,591
7,173
Total Imports at competing ports
332
325
270
306
306
261
315
Total Exports at competing ports
133
113
115
156
161
206
416
Total Traffic at competing ports
465
438
385
462
467
467
731
Import Share
14%
27%
10%
10%
10%
7%
5%
Export Share
43%
31%
36%
35%
35%
22%
34%
Total Share
18%
28%
13%
13%
13%
10%
10%
Total India traffic
Share of competing ports
Source: Basic Port Statistics of India, IPA and Port Websites
238
13.1.5 Competitive port infrastructure

Port side storage and dispensing facilities are of utmost importance for handling both
chemical and petrochemical traffic. Kochi, Chennai and Tuticorin ports have extensive tank
storage facilities, with various private operators maintaining the facility. Indian Molasses
Company (IMC) is a leading operator of tank storage facilities at these ports. Kochi Port
has a separate pipeline laid for handling chemicals at tanker berths.
Kochi Port Trust has floated a tender for allotment of water front land of 9.6 hectare (~23.6
acres) situated in Puthuvypeen SEZ area for construction of tank farms as well as for
petroleum and petro-products, including gases, storage facilities on 30 years lease basis.
Chennai Port can cater to tankers with draft up to 16.0 meters with two dedicated allweather berths.
Apart from the existing facilities, the Tuticorin Port Trust has planned to create additional
infrastructural facilities for the port-based industries and services such as thermal power
station, oil refinery, container terminal and cold storage plant. It has planned to allot
around 150 acres of land at Hare Island located within the port for companies to set up
large facilities.
Table 13.6
Comparison of infrastructure details at competing ports
Ports
Number of
Berths
Available
Kochi
Type
All-weather natural
Maximum
Permissible Road
Draft
Connectivity
(m)
10.0
Port
Chennai
Deep Draft Port-All
1 (temporary Deep Draft Port
Approx.
Storage
Capacity
(Tons.)
Connected to NH-49, Connected to South and

NH-47A and NH-17. Central Railways
16.0
Weather
Ennore
Rail
Connectivity
Connected to NH-4
Broad gauge connection
141,600
Connected to NH-4,
Connected to Chennai-
NH-5 and NH-45
Kolkata broad gauge
and NH-5
15.0
facility)
line
Tuticorin
Artificial deep-sea
harbour
10.9
Connected to NH-
Well connected by
45B and NH-7A
broad gauge rail
Source: Port Statistics
All of the competing ports are well connected by rail. All of the competing ports are well
connected by road to national highways.
239
Table 13.7
Road distance matrix
(KMS)
Vizhinjam
Tiruvananthapuram
Kollam
Pathanamthitta
Kottayam
Thrissur
16
Tuticorin
(Thoothukudi)
Kochi
Chennai
218
204
798
80
570
737
135
139
522
129
658
62
260
666
172
86
503
632
293
Kozhikode
206
595
684
414
Madurai
137
356
290
282
Dindigul
200
324
258
281
Sivaganga
176
306
240
330
Virudhunagar
104
435
369
316
65
541
474
280
Kanyakumari
134
541
548
295
Ramanathapuram
129
359
209
384
Tirunelveli
The distance matrix above explains that Vizhinjam Port has limited distance
advantage over Kochi, Tuticorin and Chennai Ports for supply points in Kerala and
Tamil Nadu. Any chemical cargo required by Tiruvananthapuram, Kollam, Tirunelveli
and Kanyakumari will be served better by Vizhinjam Port which however are having
very few players requiring chemicals to be imported and distributed from Vizhinjam
Port.
For the purpose of study, it will be suffice if the transportation cost (for the most
economical mode of transportation available) is compared at some selected consumption
centres from normal sources of supply vis--vis Vizhinjam port. To avoid cumbersome
calculations, it can safely be assumed that the basic c.i.f. price, taxes and insurance are
the same for all of the port locations considered here.
A comparison has been made in transportation costs (not the absolute price) for
chemical supplies by road ex Vizhinjam port compared with road supplies ex Kochi,
Chennai and Tuticorin ports. Road loading/unloading charges have not been
considered for this comparison as they are likely to be the same at various junctions.
Road freight is considered to be an average Rs.2.50/mt/km in Southern India.
Inter-state sales tax issues have not been considered since they are likely to be
rationalised and may not have an impact on the subsequent analysis.
240
Table 13.8
Comparison of road transportation costs
(Rs. /mt)
Delivery Point
Available Ports
Tiruvananthapuram
Vizhinjam
Tiruvananthapuram
Tiruvananthapuram
Distance
(Km)
Mode
Cost
(Rs/mt/km)
16
Road
39
Kochi
204
Road
509
Tuticorin
218
Road
544
Tiruvananthapuram
Chennai
798
Road
1,996
Kollam
Vizhinjam
80
Road
200
Kollam
Kochi
135
Road
337
Kollam
Tuticorin
210
Road
525
Kollam
Chennai
738
Road
1,844
Pathanamthitta
Vizhinjam
139
Road
347
Pathanamthitta
Kochi
129
Road
323
Pathanamthitta
Tuticorin
204
Road
510
Pathanamthitta
Chennai
658
Road
1,645
Allapuzha
Vizhinjam
164
Road
410
Allapuzha
Kochi
51
Road
128
Allapuzha
Tuticorin
294
Road
735
Allapuzha
Chennai
726
Road
1,815
Kottayam
Vizhinjam
172
Road
430
Kottayam
Kochi
62
Road
156
Kottayam
Tuticorin
260
Road
651
Kottayam
Chennai
666
Road
1,664
Tirunelveli
Vizhinjam
146
Road
365
Tirunelveli
Kochi
280
Road
701
Tirunelveli
Tuticorin
65
Road
163
Tirunelveli
Chennai
642
Road
1,604
Kanyakumari
Vizhinjam
81
Road
202
Kanyakumari
Kochi
295
Road
738
Kanyakumari
Kanyakumari
Tuticorin
134
Road
335
Chennai
715
Road
1,788
The transportation cost as mentioned in Table 13.8 shows that cost (Rs/mt/km) for
moving chemicals to various consumption centres in southern tip of India up to
Kanyakumari and Tirunveli in Tamil Nadu as well as northern districts in Kerala up to
Kottayam will be the cheapest from Vizhinjam Port as compared to Tuticorin and
Chennai Ports. However, due to cost advantages, Alappuzha will be better served by
Kochi port.
241
13.1.6 Forecast traffic for Vizhinjam Port
General Assumptions:
It is assumed that chemical traffic at competing ports (Cochin, Chennai and Tuticorin)
will grow at the present CAGR of 8.0% till 2015 in the base case.
Thereafter, chemical traffic at competing ports is likely to increase at a lower CAGR

(5.0% till 2024-25), given no new planned capacity additions for that period. It has
been assumed that Vallarpadam SEZ near Kochi and Manali chemical and
petrochemical complex near Chennai would have attained their full potential till then.
The growth in traffic at competing ports is likely to slow down further over the rest of
the forecast period with increases in the baseline, and so CAGR for rest of the period
has been toned down to 3.0%.
In the base case scenario, Vizhinjam has not been considered to be a source and/or
destinations for major chemical cargoes because the narrow hinterland has been
found to be devoid of any major supply or absorption points at present. Moreover,
there is no planned major industrial build-up in the near future. Therefore, share of
chemical traffic moving away from competing ports to Vizhinjam has been raised
gradually from 0.5% during initial years of forecast to 2.0% during final years.
In the high case scenario, it has been assumed that chemical traffic at competing
ports could grow at a rate of 10.0% till 2014-15. The rate of growth is expected to slow
down to 7.0% per annum thereafter till 2024-25. For the period 2025-44, CAGR is
assumed to be 5.0%.
In the high case scenario, it is expected that, at best, 4.0% of the chemical traffic at
competing ports could move to Vizhinjam Port that too during final years of forecast.
In the most pessimistic case, it is expected that traffic at competing ports would grow
at a CAGR of 6.0% till 2014-15, which is expected to slow down to 3.0% for the
forecast period 2015-16 to 2024-25. Thereafter, it has been assumed to grow at a
CAGR of 1.0% for the rest of the forecast period considered. In the low case scenario,
it is expected that not more than 1.0% of the total chemical traffic at competing ports
would move to Vizhinjam Port during final years of forecast.
Table 13.9
Forecast chemical and petrochemical traffic for Vizhinjam Port
Year
Forecast
Forecast
Forecast
Chemical Traffic
Chemical Traffic in
Chemical Traffic
at Competing
India
at Vizhinjam Ports
(in '000 tonnes) Base Case
('000 tonnes)
Base Case
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
11,383
12,293
12,908
13,553
14,231
14,943
15,690
16,474
17,298
1,160
1,253
1,315
1,381
1,450
1,523
1,599
1,679
1,763
6
6
7
7
7
8
8
13
14
Forecast
Chemical
Traffic at
Vizhinjam High Case
('000 tonnes)
Forecast
Chemical Traffic
at Vizhinjam Low Case
('000 tonnes)
6
7
8
8
9
9
10
17
18
5
5
6
6
6
6
6
10
11
242
Table 13.9 (contd)
Year
Forecast
Forecast
Forecast
Chemical Traffic
Chemical Traffic in
Chemical Traffic
at Competing
India
at Vizhinjam Ports
('000 tonnes)
Base Case
2022-23
2023-24
2024-25
2025-26
2026-27
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
2033-34
2034-35
2035-36
2036-37
2037-38
2038-39
2039-40
2040-41
2041-42
2042-43
2043-44
18,163
19,071
20,024
20,625
21,244
21,881
22,538
23,214
23,910
24,628
25,366
26,127
26,911
27,718
28,550
29,407
30,289
31,197
32,133
33,097
34,090
35,113
1,851
1,944
2,041
2,102
2,165
2,230
2,297
2,366
2,437
2,510
2,585
2,663
2,743
2,825
2,910
2,997
3,087
3,179
3,275
3,373
3,474
3,578
15
16
16
17
17
18
18
19
24
25
26
27
27
42
44
45
46
48
65
67
69
72
Forecast
Chemical
Traffic at
Vizhinjam High Case
('000 tonnes)
Forecast
Chemical Traffic
at Vizhinjam Low Case
('000 tonnes)
20
21
22
24
25
26
27
29
38
39
41
43
46
72
75
79
83
87
122
128
135
142
11
11
12
12
12
12
12
12
16
16
16
16
16
25
25
25
25
26
35
35
35
36
13.2
Petroleum products
13.2.1 Historical analysis

Historically, India has been a major importer of energy sources (primarily hydrocarbons).
This is to fulfil the huge gap between the domestic consumption of petroleum products and
domestic production of crude oil.
While India was a major importer of petroleum products till the year 2000, it became a
net exporter of petroleum products in 2001 as domestic product supplies outpaced
domestic demand. During the period 2000-08, consumption of petro products in India
increased at an average growth rate of 3.9% per annum. In contrast, crude oil
consumption increased at a CAGR of about 5.7% over the same period, suggesting
that new domestic refining capacity additions have resulted in higher throughputs, in
turn boosting product exports from the country.
Various refinery start-ups and capacity expansions of the existing refineries (like the
commissioning of Reliances 33.0 mtpa refinery at Jamnagar in Gujarat in 2001,
enhancing Kochi Refinery capacity by 2.0 mtpa, etc) have not only helped to bring
down the product import levels drastically since then, exports have picked up by a
CAGR of 20.3% during 2000-08.
243
Table 13.10
Growth of Indian petroleum industry at a glance
(Million tonnes)
Item
2000-01
2001-02
2002-03
2003-04
2004-05
732.0
741.0
733.0
739.0
2005-06 2006-07
2007-08
2008-09
CAGR
756.0
725.0
769.0
1.1%
Reserves (recoverable)
Crude Oil
703.0
786.0
Consumption
103.1
106.5
110.6
118.7
127.4
130.1
146.6
156.1
160.8
5.7%
100.1
100.4
104.1
107.8
111.6
113.2
120.8
129.0
133.4
3.7%
32.4
32.0
33.0
33.4
34.0
32.2
34.0
34.1
33.5
0.4%
99.6
104.3
108.7
117.6
118.6
119.8
135.3
144.9
150.5
5.3%
74.1
78.7
82.0
90.4
95.9
99.4
111.5
121.7
128.2
7.1%
9.3
7.0
7.2
8.0
8.8
13.4
17.7
22.5
18.3
8.9%
ii) Exports
Petroleum
Products
8.4
10.1
10.3
14.6
18.2
23.5
33.6
40.8
36.9
20.3%
iii) Net Imports

Crude Oil
Petroleum
Products
74.1
0.9
78.7
-3.1
82.0
-3.6
90.4
-6.7
95.9
-9.4
99.4
-10.0
111.5
-16.0
121.7
-18.3
128.2
-18.7
7.1%
i) Crude Oil1
ii) Petroleum
Products2
Production
i) Crude Oil
ii) Petroleum
Products
Imports & exports
i) Gross Imports
Crude Oil
Petroleum
Products
* Provisional, 1 In terms of refinery throughput, 2 excluding RBF, Reserves as on 1st April of initial year
Source: Basic Statistics, Ministry of Petroleum
Indias crude imports increased at an annual average rate of 7.1% during the period
2000-08 to 128.2 million tonnes.
During 2000-08, Indias recoverable oil reserves increased by about 66.0 million
tonnes (up 9.4% over 2000-01) and crude oil production was up 3.4% during the same
period, to 33.5 million tonnes.
Over the period 2000-08, consumption of petro products in India increased at an

average growth rate of 3.7% per annum.
Indias product exports have increased at an average rate of 20.3% over the past eight
years. With a total planned refining capacity of about 44.7 mtpa scheduled to be
added by 2013, petroleum product exports from the country are anticipated to rise
steadily over the next few years, with a similar trend projected in the case for crude
imports.
244
13.2.2 Petro products traffic at competing ports

Table 13.11 depicts the changing trend in the import and export of petro products at
various competing ports in Kerala, Tamil Nadu and Karnataka.
Table 13.11
Trends in petro products traffic at competing ports*
(000 tonnes)
Ports (Petroleum Import/
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
CAGR
Products)
Export
Kochi
Import
1,192
1,018
872
776
421
882
905
700
1,255
0.6%
Export
1,026
748
918
1,259
1,843
1,775
1,968
1,834
1,010
-0.2%
Subtotal
2,218
1,766
1,790
2,035
2,264
2,657
2,873
2,534
2,265
0.3%
Import
399
373
423
499
626
645
612
252
362
-1.2%
Export
13
15
87
88.4%
Subtotal
399
373
423
499
639
654
627
339
362
-1.2%
Import
209
578
774
523
376
589
493
377
334
6.0%
Export
3,370
2,758
4,411
6,238
7,842
8,403
7,831
7,168
6,970
9.5%
Subtotal
3,579
3,336
5,185
6,761
8,218
8,992
8,324
7,545
7,304
9.3%
Import
1,466
1,284
1,457
1,343
976
855
1,047
1,257
1,589
1.0%
Export
771
931
953
1,310
2,164
2,421
2,021
1,623
1,848
11.5%
2,237
2,215
2,410
2,653
3,140
3,276
3,068
2,880
3,437
5.5%
Import
104
244
188
319
241
23.4%
Export
Subtotal
104
244
188
319
241
23.4%
Import
3,266
3,253
3,526
3,141
2,503
3,215
3,245
2,905
3,781
1.8%
Export
5,167
4,437
6,282
8,807
11,862
12,608 11,835
10,712
9,828
8.4%
8,433
7,690
9,808
11,948
14,365
15,823 15,080
13,617
13,609
6.2%
Tuticorin
New Mangalore
Chennai
Subtotal
Ennore
Total petro
products on
competitor ports
Total petro products traffic

(Imports+Exports)
* Excluding LPG
Source: Major Ports of India, IPA
245
Table 13.12
Trends in LPG traffic at competing ports
(000 tonnes)
LPG
Import/Export
Kochi
Import
Export
Subtotal
10
14
Import
62
56
68
59
104
120
111
121
141
Export
62
56
68
59
104
120
111
121
141
Tuticorin
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 CAGR
Subtotal
Ennore
10.8%
10.8%
Import
Export
Subtotal
Import
Export
Subtotal
Import
960
1,004
945
1,026
1,231
1,200
1,241
1,443
1,567
Export
960
1,004
945
1,026
1,231
1,200
1,241
1,443
1,567
6.3%
Total LPG at Import

competing
ports
1,022
1,060
1,013
1,085
1,335
1,320
1,352
1,569
1,715
6.7%
Export
Chennai
New
Mangalore
Subtotal
Total LPG (Imports+Exports)
1,022
1,060
1,013
1,085
1,335
1,320
1,352
1,574
1,722
6.3%
6.7%
Total petro product traffic (excluding LPG) at competing ports increased at an average
annual growth rate of 6.2% during the period 2000-08, vis--vis the growth in product
exports which increased at a CAGR of 20.3% during 2000-08.
New Mangalore Port exported 65.2% of the total exports (excluding LPG) originating
from competing ports in 2000-01, which has increased to 70.9% by 2008-09.
According to industry sources, New Mangalore Port has been catering to various
markets down south, especially for LPG.
While product exports from Kochi Port increased at a CAGR of 11.5% during 2000-06,
volume declined thereafter sizeably. Imports, on the other hand, declined gradually till
2004-05, but gathered momentum thereafter showing a CAGR for 2000-08 at 0.2%.
Tuticorin Port has been engaged largely in importing petro products since 2000-01,
importing around 9.6% of the total imports exhibited by the competing ports.
Chennai Port has been witnessing a mixed trend in the trade pattern of petro products
(excluding LPG) while imports registered a CAGR of 1.0% during 2000-01 and 200809; CAGR witnessed in exports was 11.5%.
246
Ennore port started handling petroleum products in 2004-05, importing a total cargo of
241,000 tonnes in 2008-09 as against 104,000 tonnes imported during the first year.
LPG traffic at competing ports as well as inputs from industry sources reveal that only
New Mangalore and Tuticorin ports have been serving the major parts of Kerala,
Karnataka and Tamil Nadu. While imports of LPG at these ports are significant,
exports are nil during the time period considered. LPG imports at New Mangalore Port
showed a CAGR of 6.3% during 2000-01 and 2008-09, while Tuticorin registered a
CAGR of 10.8% during the same time period. New Mangalore Port has been handling
more than 90.0% of the total LPG imports at all competing ports taken together, while
export from the Port has been nil during the period under consideration.
Kochi Port has been importing and exporting petro products (excluding LPG) in almost
equal proportions. Only recently Kochi has been seen involved in LPG handling that
too in negligible amounts.
Kochi Refineries Ltd (KRL) has set up a Single Point Mooring System (SPM) as
captive reception for the import of Crude oil. The facility is capable of receiving very
large crude carriers (VLCCs) of 300,000 dwt or more as it is having a draft of 30
meters. The SPM is connected by a pipeline of 19.5 km to tank storage facilities at
Puthuvypeen. The SPM permits crude carriers to remain moored during virtually all
wind and wave conditions. The SPM is connected to the shore by a 48 inch pipeline
that runs to a 300,000 tonne storage facility. The total area of the facility is 70
hectares, which provides room for expansions up to the double of existing storage
capacity.
IOC is developing LPG storage facility at Panampilly village near Vallarpadam in Kochi
at a cost of Rs.170 crores. It will have a throughput of 600,000 tonnes per annum (two
tanks each of 15,400 tonnes to start with) and will be operational by 2012. Spread
over 37 acres, new tanks could be developed in future as and when required. This
could possibly enhance LPG imports at the Port sometime after 2012.
Chennai Petroleum Corporation Ltd (CPCL) has decided to put up a SPM for receiving
crude oil at Ennore, paving way for VLCCs to cater to their needs.
13.2.3 Hinterland mapping

13.2.3.1 Refineries along western coast of southern India
There are a total of two refineries installed along the western coast of southern India that
runs through the shores of Karnataka and Kerala.
Mangalore Refinery and
Petrochemicals Ltd. (MRPL) with current capacity of 9.7 mtpa was commissioned in 1988
in Mangalore. Kochi Refinery Limited (KRL), a unit of Bharat Petroleum Corporation
Limited (BPCL), was set up in 1966 at Kochi and is having a capacity of 7.5 mtpa, with
further 2.0 mtpa planned to be added soon.
There is no refinery in the hinterland of Vizhinjam Port at present, nor is there any planned
in the near future.
As of now, all the refineries in the region import crude through nearest dedicated ports and
have no incentives to bring in any cargoes from Vizhinjam port as it would be
uneconomical prima facie.
247
13.2.3.2 Product pipelines in southern India

Unlike crude oil, petroleum products can be transported using various means depending
on the volume and the distance over which it has to be transported. Bulk transportation of
petroleum products is either through pipelines or through rail wagons, while retail transport
i.e., from the depot to the selling point, is generally via road tankers. In India at present,
about 30.0% of the total transportation of petroleum products is through pipelines, about
40.0% move through rail, around 12.0% through coastal tankers and rest are moved by
road.
Table 13.13
List of existing product pipelines in Southern India
Company
Name
HPCL
IOCL
Petronet
Petronet
Visakhapatnam-Vijayawada-Secunderabad
Chennai-Trichy-Madurai
Kochi-Coimbatore-Karur
Mangalore-Hasan-Bangalore
Capacity
(Mtpa)
Length
(Km)
5.38
0.48
3.30
2.30
572
683
292
361
Table 13.14
List of proposed product/gas pipelines in Southern India
Company
Name
Capacity
(Mtpa)
Length
(Km)
Planned
Commission Date
IOCL
Chennai-Chittor-Bangalore
n/a
290
2008
GTICL*
Kakinada-Vijayawada
0.14
126
n/a
GTICL
Chennai-Vellore-Bangalore-
1.18
540
n/a
1.98
660
n/a
n/a
Cuddapah
GTICL
Goa-Hyderabad
Essar Oil
Goa-Hubli-Guntakkal
n/a
389
Essar Oil
Goa-Gulbarga
n/a
473
n/a
n/a
Chittor-Cuddapah-Kurnool
n/a
n/a
n/a
* GTICL: Gas Transport & Infrastructure Co. Ltd. (a wholly owned subsidiary of Reliance Industries
Limited)
No product pipeline projects are proposed in the hinterland as of now.
248
Figure 13.2
Product pipelines in Southern India
13.2.4 Competitive analysis for movement of petro products traffic

For the purpose of study, the economic supply zones for petro products from Vizhinjam
Port are considered to be the districts of ldukki, Kottayam, Allapuzha, Pathanamthitta,
Kollam and Tiruvananthapuram in Kerala; as also districts of Kanyakumari and Tirunveli in
Tamil Nadu. Demand in these regions is currently being met through supplies from Kochi,
New Mangalore and Tuticorin ports.
The secondary hinterland could be extended to Virudhunagar, Madurai,
Rammanathpuram, Sivaganga and Dindigul districts of Tamil Nadu and Palakkad as well
as Malappuram districts of Kerala. Though absence of industrial demand could possibly
deny any large scale pull from these districts, domestic as well as automobile demand
would still be there to cater.
249
Figure 13.3
Major economic supply zones for Vizhinjam Port
Kochi
Tuticorin
Vizhinjam
For the purpose of study, it would suffice if the transportation cost (for the most economical
mode of transportation available) is compared for rail and road movement of cargoes
unloaded at Vizhinjam Port. To avoid cumbersome calculations, it can safely be assumed
that the basic c.i.f. prices, taxes and insurance are same for all of the port locations
considered here.
A comparison has been made in transportation costs (not the absolute price) for product
supplies by road/rail ex Vizhinjam Port compared with rail supplies ex Kochi, and Tuticorin
ports. Transportation costs for such purpose of study have been calculated based upon
the below mentioned assumptions on road/rail/pipeline freights:
Rail loading charges at Kochi, Tuticorin and Vizhinjam ports have been considered to
be Rs.125/mt.
Freight charges for moving a tonne of petro products up to a distance of 100km has
been considered to be Rs.2.0/mt/km, for distances up to 200km to be Rs.1.6/mt/km,
and for distances up to 300km it has been considered to be Rs.1.5/mt/km.
250
Cost of pipeline transportation has been ignored in view of absence of pipelines in the
hinterland.
Rail/tanker unloading charges have not been considered.
Road freight ex Vizhinjam Port has been taken to be Rs.2.50/mt/km.
Tanker loading charges at Vizhinjam Port has also been considered as Rs.125/mt.
Inter-state sales tax issues have not been considered since they are likely to be
rationalised.
It has been assumed that loading point for rail transportation is adjacent to the
Vizhinjam Port.
Table 13.15
Comparison of transportation costs at supply points from normal sources vis-vis Vizhinjam Port
Distribution
Centres
Nearest
Port/
Terminal
Transportation Loading
Mode of
Distances
Transportation (in Km.)
Cost in
Charges
Rs./mt/km by in Rs./mt
Rail
by Rail
Transportation
Costs (in
Rs./mt) by Rail
Transportation Transportation
Cost in
Costs (in
Rs./mt/km by
Rs./mt) by
Road
Road
Tiruvananthapuram Kochi
Road/Rail
204
1.5
125
427
2.5
509
Tiruvananthapuram Tuticorin
Road/Rail
218
1.5
125
448
2.5
544
Tiruvananthapuram Vizhinjam Road/Rail
16
2.0
125
156
2.5
39
Kollam
Kochi
Road/Rail
135
1.6
125
334
2.5
337
Kollam
Tuticorin
Road/Rail
210
1.5
125
436
2.5
525
Kollam
Vizhinjam Road/Rail
80
2.0
125
283
2.5
200
Pathanamthitta
Kochi
Road/Rail
129
1.6
125
326
2.5
323
Pathanamthitta
Tuticorin
Road/Rail
204
1.5
125
427
2.5
510
Pathanamthitta
Vizhinjam Road/Rail
139
1.6
125
340
2.5
347
Allapuzha
Kochi
Road/Rail
51
2.0
125
226
2.5
128
Allapuzha
Tuticorin
Road/Rail
294
1.5
125
561
2.5
735
Allapuzha
Vizhinjam Road/Rail
164
1.6
125
380
2.5
410
Kottayam
Kochi
Road/Rail
62
2.0
125
248
2.5
156
Kottayam
Tuticorin
Road/Rail
260
1.5
125
511
2.5
651
Kottayam
Vizhinjam Road/Rail
172
1.6
125
392
2.5
430
Tirunelveli
Kochi
Road/Rail
280
1.5
125
540
2.5
700
Tirunelveli
Tuticorin
Road/Rail
65
2.0
125
254
2.5
163
Tirunelveli
Vizhinjam Road/Rail
146
1.6
125
352
2.5
365
251
Advantages
Road as well as rail supplies ex Vizhinjam port are expected to be competitive for
Tiruvananthapuram and Kollam due to its close proximity to the port.
Pathanamthitta could attract petro products from Vizhinjam, provided the port and
vessels related charges have cost advantages over Kochi Port.
Tirunelveli and Kanyakumari seem to be other two districts in the primary hinterland
which could have advantages in absorbing supplies from Vizhinjam Port by replacing
Tuticorin.
Close proximity to international shipping route could help in the development of

transhipment hub for crude and product cargoes at Vizhinjam Port. In fact, some big
international players have expressed interest in developing transshipment facilities in
the area. At the same time, one national player has showed interest in developing
bunkering facilities (or, multi utility liquid tanks, to be precise) if the port gets
developed.
Disadvantages
The biggest disadvantage of Vizhinjam Port seems to be its proximity to a well

developed Kochi Port. Having single point mooring facility where VLCCs can
discharge, crude cargo can be discharged directly into pipeline which runs to the
refinery. Handling as well as storage facilities are well developed which is being
expanded currently at Kochi Port. Presence of extensive tank farms also poses a great
challenge in attracting petro products traffic at Vizhinjam Port. Moreover, narrow
hinterland also poses a downside risk for the development of Vizhinjam Port.
Lack of refinery in the hinterland could restrict imports of crude petroleum into the
Port. This being said, exports of petro products would also have to be discounted till
the time any refinery comes up in the hinterland.
Due to close proximity to international shipping route, Vizhinjam Port could have been
an ideal location for very large crude carriers as well as very large gas carriers to
discharge cargoes. But delays in the development of the Port have jeopardised this
possibility. Until tank farms and adequate storage facilities are developed, this seems
a remote possibility. Moreover, industry sources indicated the lack of adequate
hinterland an additional bottleneck.
IOC seemed keen on developing LPG storage facilities at Vizhinjam Port earlier, but it
has shifted to Kochi due to delays in port development. This could possibly mean that
LPG imports could be discounted while calculating for future cargo potential for
Vizhinjam Port.
13.2.5 Key findings
As per Drewrys discussion with key industry players, the market for petro products
including LPG is growing at a rate of around 3.0% to 5.0% in the hinterland at present.
As per Drewrys discussions with industry officials, IOCL has Hospitality Agreements
under which they receive product supplies from KRL for distribution at their retail
pumps. Bulk of the product demand in southern region is met by such agreements
between oil majors. Moreover, IOCL is currently importing and exporting majority of
252
its products through Kochi and New Mangalore ports. Responses from BPCL (having
a share of 50.0%-55.0% in Kerala) also indicate hospitality agreements between
BPCL and other oil majors to cater demand in the southern region.
IOCL is importing LPG largely at New Mangalore Port for distribution to Tamil Nadu
and Kerala in addition to Karnataka. It is developing two tanks of 15,400 MT capacities
each (estimated throughput expected to be 600,000 MT per annum) for LPG storage
at Kochi which is expected to be operational by 2012. Capacity could be enhanced in
future as and when required.
Lack of catalytic cracker units could also prove to be a bottleneck in the growth of
traffic for petro products at the Port. Not much imports could be envisaged as
absorption points using petro products as feedstock would be almost nil in the region.
Also, current location of diesel/naphtha based power plants in Kerala can easily be
served by Kochi Port due to their close proximity to the Port.
One of the worlds leading international service providers of liquid bulk storage
facilities has expressed interest in setting up storage terminal at Vizhinjam Port. It is
expected that this terminal will be having storage facilities for petro products to start
with, and storage capacity as well as commodity basket could be enlarged as the
business expands. This seems to be in line with strong growth in demand for storage
facilities across the globe, as also it could be aimed at catering to large and rapidly
growing emerging economies in Asia-Pacific, including India. Also, one of the leading
domestic players in the petroleum sector has shown interest in developing bunkering
facilities at the Port, once it gets developed.
13.2.6 Traffic forecast

Three scenarios, namely base case, low case and a high case have been created to
estimate future petro products traffic for Vizhinjam port. The underlying assumptions with
key sensitivities are mentioned below:
Underlying assumption for traffic projections at Vizhinjam Port
Only hinterland demand has been considered for traffic forecast purposes.
CAGR for petro products traffic in India during the period 2000-08 stood at 6.7%. For
traffic forecast, however, weighted average of CAGR (equal to 8.7%) of imports and
exports was maintained for traffic forecast till 2015 weights being share of exports
and imports in the total traffic in 2008-09.
Forecast growth rate in total traffic handled at all ports in India has been mellowed
down after every five years, and brought down to 2.5% during last five years of
forecast.
Due to lack of refining capacity in the hinterland and no such plans envisaged so far,
only imports coming at Kochi and Tuticorin ports have been considered significant for
Vizhinjam Port traffic forecast (as Vizhinjam Port is not expected to attract New
Mangalore traffic in future).
Only domestic and automobile consumption of petro products have been found to be
significant in the hinterland.
253
Cumulative traffic at Kochi and Tuticorin has been found to grow at a CAGR of 0.05%
during 2000-08. For traffic forecast, weighted average has been used for forecast till
2015. Thereafter, due to higher refinery throughput in KRL as well as improved
infrastructure facilities at Kochi Port could see increased exports as well as imports at
the port. Beyond 2012, therefore, rate of growth has been escalated to 7.0% till 201415. For forecast beyond 2014-15, growth rates have been toned down after every five
years and brought down to 2.0% during final years of forecast.
It is expected that due to lack of infrastructure facilities and narrow hinterland, forecast
traffic handled at Vizhinjam Port could witness a slow start. For base case traffic
forecast, share of import traffic moving away from competing ports to Vizhinjam Port
could vary from a low of 3.0% during initial years of forecast to a high of 15.0% during
final years of forecast.
In the high case scenario, Vizhinjam Port has been assigned 5.0% of the import traffic
handled at competing ports during initial years of forecast to 20.0% of the traffic
handled at Kochi and Tuticorin ports by 2043-44.
In the most pessimistic scenario, share of import traffic handled by competing port
moving to Vizhinjam Port has been reduced to 1.0% during initial years of forecast,
which has been raised to 20.0% in 2043-44.
For the assessment of traffic forecast for Vizhinjam Port, possible development of tank
farms in the area has not been taken into consideration as these projects are yet to be
finalized.
Also, due to adequate development of LPG handling and storage facilities at Kochi
Port, LPG traffic has been discounted for traffic forecast for Vizhinjam Port as Kochi
Port would cater the hinterland quite easily once these facilities become on-stream.
Table 13.16
Total petro products sales across India
(000 tonnes)
Year
Total Sales
2000-01
106,974
2001-02
107,705
2002-03
111,776
2003-04
115,991
2004-05
120,171
2005-06
122,353
2006-07
131,669
2007-08
140,697
2008-09
145,312
CAGR
3.9%
254
Table 13.17
Total petro products sales across Kerala
(000 tonnes)
2007-08
2008-09
547
223
526
398
608
219
527
609
1,485
213
1
1,655
229
1
289
113
38
100
379
143
168
125
3,932
4,663
Light Distillates
Petrol
Kerosene
LPG
Naphtha
Middle Distillates
Diesel
ATF
LDO
Heavy ends
Black Oil
Bitumen
Lubes
Other Minor Products
Total
Table 13.18
Petro products traffic forecast for Vizhinjam Port
('000 tonnes)
Year
Forecast Total
Petro Product
Traffic at all
Ports
Forecast
Forecast
Forecast
Forecast Petro
Petroleum
Petroleum
Petroleum
Product Imports
Product Traffic at Product Traffic at Product Traffic at
at Competing
Vizhinjam Port - Vizhinjam Port - Vizhinjam Port Ports
Base Case
High Case
Low Case
2013-14
72,234
2,121
2014-15
78,543
2,269
2015-16
85,404
2,428
2016-17
92,865
2,598
2017-18
100,977
2,780
2018-19
109,797
2,974
2019-20
119,388
3,182
2020-21
124,761
3,373
2021-22
130,375
3,576
2022-23
136,242
3,790
2023-24
142,373
4,018
2024-25
148,780
4,259
2025-26
154,731
4,429
2026-27
160,920
4,606
2027-28
167,357
4,791
2028-29
174,051
4,982
2029-30
181,013
5,182
64
68
121
130
139
149
159
253
268
284
301
319
443
461
479
498
518
106
113
194
208
222
238
255
337
358
379
402
426
664
691
719
747
777
21
23
97
104
111
119
127
270
286
303
321
341
443
461
479
498
518
255
Table 13.18 (contd)

Forecast Total
Year
Petro Product
Traffic at all
Ports
Forecast Petro
Forecast
Forecast
Forecast
Petroleum
Petroleum
Petroleum
Product Imports
Product Traffic at Product Traffic at Product Traffic at
at Competing
Vizhinjam Port - Vizhinjam Port - Vizhinjam Port Ports
Base Case
High Case
Low Case
2030-31
187,349
5,311
2031-32
193,906
5,444
2032-33
200,693
5,580
2033-34
207,717
5,719
2034-35
214,987
5,862
2035-36
220,362
5,980
2036-37
225,871
6,099
2037-38
231,518
6,221
2038-39
237,306
6,346
2039-40
243,238
6,473
2040-41
249,319
6,602
2041-42
255,552
6,734
2042-43
261,941
6,869
2043-44
268,489
7,006
797
817
837
858
879
897
915
933
952
971
990
1,010
1,030
1,051
1,062
1,089
1,116
1,144
1,172
1,196
1,220
1,244
1,269
1,295
1,320
1,347
1,374
1,401
531
544
558
572
586
598
610
622
635
647
660
673
687
701
256
Edible Oil and DOC
14. Edible oil and DOC

This chapter looks at the over all scenario of edible oil imports and DOC exports by India.
It also takes a closer look at the demand of edible oil in southern states of India,
especially in Kerala and Tamil Nadu. Then we derive the edible oil traffic at the proposed
Vizhinjam port under three scenarios low, base and high.
Key findings
India is second largest edible oil importing country in the world after China. It
imported about 6.1m tonnes in the year 2008-09.
The edible oil import traffic of various competing ports in Vizhinjams immediate
hinterland contributes merely 3.3% of total Indian edible oil import traffic.
In 2008-09, Kerala Government banned the imports of all types of crude edible oil in
its effort to secure the interest of local coconut farmers. However, the ban had little
impact on the operations of edible oil refineries as they began importing cargo at New
Mangalore Port.
India is the fifth largest producer and fourth largest exporter of DOC. DOC export
volumes are largely governed by the global demand and price in competing countries.
Moreover, the monsoon along with input prices also affects the supply and of DOC.
In 2008-09, India exported 5.4m tonnes of DOC, recording a CAGR of 19% in the last
five fiscal years.
While Kandla is the most prominently used ports for DOC, export volumes at
competing ports in Vizhinjams hinterland have been nil over the last five years.
In the base case scenario, Vizhinjam port may attract 30,000 tonnes of edible oil
traffic in the terminal forecast year.
257
14.1
Edible Oil and DOC
Indian Edible oil and DOC Industry

India is second largest edible oil importing country in the world after China. India imported
about 6.1m tonnes in the year 2008-09. Crude edible oil has around 75% share in Indias
total edible oil imports. This is largely consumed by various edible oil refineries located
within port limits or in very close proximity of ports. The edible oil export in Indian primarily
includes castor oil.
Domestic oilseeds production in India has shown a very erratic growth and has recorded a
CAGR of 1.3% over the past decade. Income and population growth and key changes in
trade policies are important contributors to India's increasing edible oil consumption and
imports. Since there has been a continuous demand in excess over domestic supply of
edible oils, import of edible oils has been resorted to for more than two decades to make
this item of mass consumption easily available to consumers at reasonable prices.
Table 14.1
Historical analysis of Edible Oil and DOC trade
(Million tonnes)
Edible Oil
Year
Deoiled Cake
Oilseed
Edible Oil
Domestic
DOC
Domestic
DOC
Production
Production
Consumption
Edible Oil Edible Oil

Export
Import
Production
Consumption
Export
1998-99
24.8
8.0
11.6
0.2
4.4
6.8
3.4
3.4
1999-00
20.7
6.8
10.7
0.2
4.5
6.3
3.6
2.6
2000-01
18.4
6.3
10.6
0.2
4.8
6.2
3.8
2.3
2001-02
20.7
7.0
10.8
0.2
4.4
6.7
3.7
3.0
2002-03
14.8
5.6
10.1
0.2
5.1
6.1
4.2
1.9
2003-04
25.2
7.1
12.4
0.3
4.4
7.2
3.9
3.3
2004-05
34.4
7.2
11.8
0.3
5.0
6.3
3.7
2.7
2005-06
28.0
8.3
12.6
0.2
4.4
7.8
3.4
4.4
2006-07
24.3
7.4
12.1
0.2
4.7
7.4
2.3
5.2
2007-08
29.8
8.7
14.3
0.2
5.6
8.1
2.3
5.4
2008-09
28.2
8.0
15.1
0.3
6.1
8.6
2.3
5.4
CAGR
1.3%
0.1%
2.7%
4.1%
3.3%
2.4%
-3.9%
4.8%
Source: Ministry of Consumer Affairs and The Solvent Extractors Association of India
Table 14.2
Per capita edible oil consumption
(Kg/Annum)
2003-04
2004-05
2005-06
2006-07
2007-08
CAGR
India
World
11.1
11.4
11.7
11.9
12.5
3.0%
20.11
21.08
22.18
23.03
23.57
4.0%
Source: Minstry of Consumer Affairs, Govt of India
258
Edible Oil and DOC
Table 14.3
Edible Oil Imports at various Ports
(000 tonnes)
Chennai
Cochin
Haldia
JNPT
Kandla
Kolkata
Mumbai
New Mangalore
Paradip
Tuticorin
Vizag
Total
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
CAGR
571
131
225
546
338
607
740
234
20
114
0
456
125
275
600
506
497
549
263
17
116
0
410
146
371
575
745
512
395
332
43
119
0
471
90
388
502
524
511
325
314
68
140
0
518
43
513
582
618
461
322
374
12
121
0
821
0
669
485
659
524
420
477
32
198
13
7.5%
-100.0%
24.4%
-2.3%
14.3%
-2.9%
-10.7%
15.3%
9.9%
11.7%
-
3,526
3,404
3,648
3,333
3,564
4,298
4.0%
Source: The Solvent Extractors Association of India
The edible oil import traffic of various competing ports in Vizhinjams immediate
hinterland contributes merely 3.3% of total Indian edible oil import traffic.
In 2008-09, Kerala Government banned the imports of all types of crude edible oil in
its effort to secure the interest of local coconut farmers. However, the ban had little
impact on the operations of edible oil refineries as they began importing cargo at New
Mangalore Port.
For most oilseeds, Deoiled cakes (DOC) are a by-product of vegetable oil production
(soybeans are an exception, DOC being the more valuable end-product). DOC is used
mainly as a protein supplement in animal feeds and Soya DOC accounts for around 75%
of total world consumption. DOC is also used as fertilisers and soil conditioners in some
countries. India is the fifth largest producer and fourth largest exporter of DOC. DOC
export volumes are largely governed by the global demand and price in competing
countries. Moreover, the monsoon along with input prices also affects the supply and of
DOC.
Table 14.4
DOC exports from various Ports
(000 tonnes)
2004-05
2005-06
2006-07
2007-08
2008-09
CAGR
Bedi
Mumbai
Porbander
Bhavnagar
Kandla
Kakinada
Vizag
Pipavav
Kolkata
Chennai
Mundra
Others
338
502
0
113
1,432
57
210
0
0
0
52
30
446
715
1
87
2,620
127
433
0
0
0
0
28
773
1,082
0
0
2,760
270
279
7
0
0
0
9
736
978
0
0
3,240
180
271
7
31
0
0
21
554
1,051
0
0
3,142
93
290
0
80
9
202
5
13%
20%
-100%
22%
13%
8%
40%
-37%
Total
2,734
4,457
5,180
5,463
5,426
19%
Source: The Solvent Extractors Association of India
259
Edible Oil and DOC
The Table 14.1 depicts, that the average DOC production in India over the last decade
has been steadily increasing at a CAGR of 2.4%, while it has shot up in the last five
years to approximately 19%. On the contrary, the consumption of DOC over the same
period has been going downhill, registering a negative CAGR of 3.9%.
The DOC export has been hovering around 5.5m tonne mark over the last three years
and a CAGR of 4.8% is a testimony to growing production and diminishing domestic
consumption.
While Kandla is the most prominently used ports for DOC, export volumes at
competing ports in Vizhinjams hinterland have been nil over the last five years.
There are no refining units in the immediate hinterland of Vizhinjams hinterland. All the six
refineries of note in Kerala are either located in Ernakulam or Kozhikode district which is
closer to Kochi port and Beypore port, respectively.
However, with ban on imports of edible oil in Kerala, there is no point discussing the
present traffic scenario at ports in Kerala. Unless the state government thinks positively
about the revenue potential of ports operating in Kerala, the ban is likely to remain in force,
more to please the coconut farmers than to actually safeguard their interest.
14.2
Edible oil traffic in Kerala

Figure 14.1
Change in Edible oil traffic after ban in Kerala
Edible oil imports ('000 tonnes)
800
600
400
200
0
Before Ban (2007-08)
Cochin
After Ban (2008-09)

New Mangalore
Tuticorin
Source: IPA
Figure 9.1 shows how the share of Cochins edible oil traffic has been distributed
predominantly to Tuticorin port and to a smaller extent to New Mangalore port in 2008-09.
With ban in force, Tuticorin and New Managlore port have become the natural choice for
refiners to import crude edible oil in Kerala.
260
14.3
Edible Oil and DOC
Table 14.5
Location
Kochi
Tuticorin
New Mangalore
Vizhinjam
Ernakulam
422
450
221
Kozhikode
206
537
252
414
Tiruvananthapuram
204
218
655
16
Kollam
135
210
585
80
Pathanamthitta
129
204
568
139
Allapuzha
51
294
501
164
Kottayam
62
260
512
172
Idukki
99
311
552
244
Tirunelveli
280
65
730
146
Kanyakumari
295
134
750
81
Source: mapmyindia.com
The Table 14.5 shows that Vizhinjam port does not provide significant distance advantage
over competing ports and various solvent extractors and edible oil refineries will find it
advantageous to shift their traffic to Kochi once the ban is lifted. The region where
Vizhinjam port offers a distance advantage Tiruvananthapuram, Kollam and
Kanyakumari - does not have any edible oil refinery or any allied units of note.
14.4
Edible oil traffic and DOC Traffic Forecast for Port till 2043-44
Key issues
Edible oil imports in Vizhinjams hinterland during the last four years of import before
ban had increased steadily to around 50,000 tonnes in 2007-08. However, ever since
the ban had been imposed, there has been no edible oil traffic in the region.
Therefore, considering the government policies to safeguard the interest of local
coconut farmers, under low case scenario it is assumed that the edible oil imports in
Kerala would remain nil.
Even if the ban is revoked, existing refineries in Ernakulam and Calicut would continue
importing edible oil through Kochi and the volume may increase in the future, with
increase in refining capacities.
Vizhinjams may attract edible oil traffic if new crude edible oil refineries come up in its
proximity i.e., Tiruvananthapuram, Kollam, Kanyakumari and Pathanamthitta.
However, as of now Drewry is not aware of any such plans which may come to fruition
in the near future.
DOC production in Vizhinjams hinterland, primary and secondary combined, is

consumed locally for cattle feed manufacturing. There havent been any DOC exports
from the region in the recent past.
261
Edible Oil and DOC
Table 14.6
Edible oil import traffic forecast for Vizhinjam Port
(Million tonnes)
Projected all
Import at
India imports Competing Ports
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
2033-34
2034-35
2035-36
2036-37
2037-38
2038-39
2039-40
2040-41
2041-42
2042-43
2043-44
CAGR
5.61
6.09
6.33
6.59
6.85
7.13
7.41
7.71
7.94
8.18
8.42
8.67
8.93
9.11
9.29
9.48
9.67
9.86
9.96
10.06
10.16
10.26
10.37
10.52
10.68
10.84
11.00
11.17
11.34
11.51
11.68
11.85
12.03
12.21
12.39
12.58
12.77
2.3%
Assumptions
Edible oil
0.54
0.68
0.69
0.70
0.72
0.73
0.75
0.76
0.78
0.79
0.81
0.82
0.84
0.86
0.87
0.89
0.91
0.93
0.95
0.96
0.98
1.00
1.02
1.03
1.03
1.04
1.04
1.05
1.05
1.06
1.06
1.07
1.08
1.08
1.09
1.09
1.10
2.0%
Share of Vizhinjam
Traffic at Vizhinjam
Low
Base
High
Low
Base
High
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.0%
1.0%
1.0%
1.0%
1.0%
1.0%
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.0%
1.0%
1.0%
1.0%
2.0%
2.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.01
0.01
0.01
0.01
0.01
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
Nominal growth of 2% assumed for edible oil imports in Vizhinjams hinterland.
In high case it is assumed that Vizhinjam port may have around at least one
edible oil refineries, generating a combined demand of around 50,000 tonnes of
edible oil imports.
262
Edible Oil and DOC
Even in the high case Vizhinjams share in immediate hinterland traffic is unlikely
to exceed 10% subject to commissioning of an edible oil refinery in the proximity
of the port.
Base case and high case forecasts have been done on the assumption that at
some point in the next quinquennium Kerala Government will revoke the ban on
import of edible oil.
DOC
We do not expect any DOC traffic from the proposed port.
263
Timber
15. Timber
This chapter looks at the over all scenario of timber imports in India. It also takes a closer
look at the demand of timber in southern states of India, especially in Kerala and Tamil
Nadu. Then we derive the timber traffic at the proposed Vizhinjam port under three
scenarios low base and high.
Key findings
India is the second largest importer of timber logs in the world after China with
imports of 3.5 million tonnes in the calendar year 2008. About 85% timber imported in
India is in the form of logs.
Of the Keralas total timber demand, 75% is currently met through imports, sourced
primarily from Myanmar, Indonesia and Malaysia. Despite about 28% of Keralas total
land being forests, state regulations limit harvesting of these forests.
Timber is imported at New Mangalore, Tuticorin and Cochin ports. Due to lack of
ample storage space and high storage cost importers prefer New Mangalore and
Tuticorin ports. In 2008-09, together these three ports imported 625,000 tonnes of
timber. In the last five years timber imports in the hinterland port have been steady at
best, fluctuating between 600,000 to 700, 000 tonnes.
Timber demand in Kerala for domestic consumption is unlikely to increase drastically

over the next couple of decades. In terms of infrastructure, Kerala is one of the most
advanced states in the country and domestic consumption may remain steady.
However, a host of timber processing units in the state may prosper in the wake of
high demand of furniture manufactured in India across the world.
Under the base case scenario, timber traffic at Vizhinjam port is expected to touch
104,000 tonnes. Since there is not much of an exclusive hinterland for the port, we
expect this traffic will mainly be diversion from existing ports on account of better and
competitive cargo handling and storage capacity.
264
15.1
Timber
Overview
The consumption of timber and timber products in India has been increasing with
increasing population and urbanization, improving standards of living and rising personal
disposable incomes, especially in the last decade. At the same time, there is an increasing
scarcity of domestic supply and motivation for substitution by non-timber products,
especially in some joinery items, given that the production of timber for the market from the
largely publicly owned forests has declined over the years.
Even though India is endowed with over 250 commercial varieties of timbers including
tropical hardwoods like Teak, Rosewood, Padouk, Red Sanders, Sandalwood, a strict
conservation policy prohibits harvesting which makes it a net importer of wood and woodbased panel products. As per The International Tropical Timber Organization (ITTO)
estimate Indian industrial demand for wood jumped from 58 million cubic meters (mcm) in
2000 to 85 mcm in 2008 and expected to cross 150 mcm by 2018.
India is the second largest importer of tropical logs with imports of 1.8 mcm in 2007,
increasing to nearly 2 mcm in 2008, only behind China. India, among producers, is the
largest importer of logs accounting for over 91% of total producer imports of 1.9 mcm in
2007.
Indian manufacturers prefer to import timber in log form to feed the domestic industries.
Imports are mostly from Malaysia, Myanmar, Indonesia, Nigeria, Ivory Coast, Ghana,
Togo, Gabon, Brazil, Panama, Costa Rica, Ecuador and New Zealand. The major ports
used for imports are Kandla, Mumbai, Mangalore, Tuticorin, Chennai, Vizag and Kolkata
as well as many internal container depots.
Timber is primarily imported in the form of logs, while some portion of it is imported in the
form of Sawn Wood and Veneer. Table 15.1 shows the break up of production, trade and
consumption of all timber by India. As per the Table below, timber log form the largest
chunk of timber imports into India with a share of 77% in 2007 followed by sawn (16%),
plywood (7%) and veneer (1%). Domestic consumption has been calculated as the
difference of sum of imports & production and exports. Indias production of timber
products has grown at the average rate of 8%, while its overall domestic consumption at a
higher rate which is 9%. Therefore, its evident that timber imports into India have growth
at a healthy 15% over the past six years primarily led by log imports. However, sawn
timber imports have increased during past couple of years registering an average growth
rate of 36% over past six years. Sawn Wood and veneer is transported in containers due
to its good quality and high cost.
265
Timber
Table 15.1
Production, trade and consumption of all timber by India
(In 000 tonnes)
Production
Product Species 2004
Logs
All
C
NC
Sawn
Ven
Domestic Consumption
2007 2008* CAGR 2004 2005 2006 2007 2008* CAGR 2004 2005 2006 2007 2008* CAGR 2004
16,293 16,565 16,566 16,566 16,566 0.4% 1,855 2,640 2,787 3,323 3,536 17.5%
1,787 2,056 2,057 2,057 2,057 3.6%
287
323
357
566
13
2005
2006
2007 2008* CAGR
5 -5.1% 18,142 19,197 19,340 19,882 20,097 2.6%
566 18.6%
0 -57.3% 2,070 2,376 2,412 2,623 2,623 6.1%
14,506 14,509 14,509 14,509 14,509 0.0% 1,569 2,318 2,430 2,757 2,970 17.3%
11
5 19.3% 16,072 16,821 16,928 17,259 17,474 2.1%

23 22.6% 9,815 10,607 10,704 10,812 10,781 2.4%
9,758 10,564 10,564 10,564 10,564 2.0%
67
54
155
263
241 37.5%
10
11
14
15
6,643 7,071 7,071 7,071 7,071 1.6%
38
20
13
40
17 -18.0%
NC
3,115 3,492 3,492 3,492 3,492 2.9%
29
34
142
224
224 66.2%
13
13
22 23.6% 3,135 3,517 3,621 3,703 3,694 4.2%
All
NC
All
C
NC
Note:
2006
Exports
All
C
Ply
2005
Imports
7.6% 6,680 7,090 7,084 7,109 7,088 1.5%
191
200
200
204
207 2.1%
11
12
17 56.0%
12
13
16
19
27 22.7%
182
193
195
196
11
14 18.9%
5 31.4%
12
18 20.5%
197 2.1%
1 57.3%
184
193
193
193
193 1.2%
13 73.8%
9 27.6%
181
191
193
195
196 2.0%
1,398 1,553 1,539 1,539 1,539 2.4%
14
28
22
38
46 33.8%
35
78
76
84
51 10.1% 1,378 1,503 1,485 1,492 1,534 2.7%
17 3.4%
12
27
17 40.4%
26
16
22
13 35.3%
1,383 1,521 1,521 1,521 1,521 2.4%
10
22
10
11
29 30.6%
31
52
60
62
38
15
31
17
17
15
11
14
22
21 8.1%
5.3% 1,362 1,492 1,471 1,470 1,513 2.7%
C Coniferous, NC Non-Coniferous
Source: ITTO
266
Timber
The market for timber is mainly driven by the construction and furniture industry.
Construction business gives While India has had sustained economic growth over the past
decade and a large population, Indias rate of growth in total and tropical log imports has
not matched that of Chinas. Indias wood processing sector is unlikely to match Chinas
highly competitive export oriented sector. A number of factors limit Indias wood processing
competitiveness including poor infrastructure and barriers to foreign investment.
Major timber handling ports in India on the west coast are Kandla, Mumbai and New
Mangalore. On the east coast timber is handled at Calcutta, Chennai, Vizag and Tuticorin.
The share of ports in handling Timber volumes in India is stated in Figure 10.1. The
furniture industry, one of the prime consumers of timber in India, is highly fragmented and
there are no bigger players. Major demand is from the North West clusters of India.
Figure 15.1
Share of timber traffic by ports in the hinterland
(import in '000 tonnes)
800
600
400
200
0
2004-05
Cochin
2005-06
2006-07
Tuticorin
2007-08
2008-09
New Mangalore
Since 1996 timber imports in India has grown consistently due to Supreme Court ban on
felling of timber in north east region.
Kandla is the leading timber importing port on the west coast. It handles nearly 51% of
total Indian timber import. High volume of timber traffic at Kandla is attributed to good
handling facilities available at the port along with a well developed trade centre in the
vicinity of the port. Additionally, the location of saw mills around Gandhidham, near Kandla
has further contributed to increase in imports at Kandla. The services of saw mills are
utilised by importers to remove the outer pulp and to convert wood logs into plank.
15.2
Hinterland mapping
Consumption of timber is not concentrated in one area in Kerala. There are at least 200
saw mills which are served through the Tuticorin, Cochin and New Mangalore ports. Table
15.2 gives the timber traffic at these ports during the last five years. While Cochins share
has been increasing in the last five years, New Mangalores has been on decline primarily
due to shifting of traffic at Cochin port as it is more cost effective for saw mills in Kerala to
import timber at Cochin Port. Despite high cargo handling cost and lack of ample storage
space, Cochin provides sufficient cost saving to importers based in Central and Northern
Kerala.
267
Timber
As per Drewrys discussion with industry players in the region, the biggest disadvantage
that Cochin port has is its high crane cost and lack of storage space. Currently, besides
40,000 square metres of timber storage space provided by the port, a leading timber
handling agency at the port is also using 12 acres of Food Corporation of Indias stackyard.
Table 15.2
Timber traffic at ports in the hinterland
(000 tonnes)
Cochin
Tuticorin
New Mangalore
Total
2004-05
2005-06
2006-07
2007-08
2008-09
CAGR
5
400
265
670
8
425
270
703
31
452
230
713
34
428
197
659
51
458
116
625
78.7%
3.4%
-18.7%
Source: IPA
15.3
Traffic forecast
Log imports are expected to keep increasing due to increase in domestic consumption
of timber.
The demand for timber is growing consistently. Even though timber is facing some
competition from substitutes like iron, plastics, stones, etc, this is not likely to change
the demand pattern of timber products in the long term. However, slow growth in
housing sector is also likely to stabilise timber consumption in the hinterland.
Currently, containerized shipment of logs and Sawn Wood makes around 15% of the
total timber imported in India and this share is unlikely to increase due to high duty
structure applicable to Sawn Wood and other value added wood products.
268
Timber
Table 15.3
Timber traffic forecast for Vizhinjam
(000 tonnes)
Forecast
Year
Projected
Hinterland
Traffic
Projected Market Share
Projected traffic at Vizhinjam
Low
Base
High
Low
Base
High
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
2033-34
2034-35
2035-36
2036-37
2037-38
2038-39
2039-40
2040-41
2041-42
2042-43
2043-44
625
641
657
673
690
707
725
739
754
769
785
800
812
824
837
849
862
871
879
888
897
906
915
924
934
943
952
962
971
981
991
1,001
1,011
1,021
1,031
1,042
0.0%
0.0%
1.0%
2.0%
2.0%
2.0%
2.0%
2.5%
2.5%
2.5%
3.0%
3.0%
3.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
0.0%
2.0%
2.5%
2.5%
3.0%
3.0%
3.0%
5.0%
5.0%
5.0%
7.5%
7.5%
7.5%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
3.0%
4.0%
5.0%
7.5%
7.5%
7.5%
7.5%
10.0%
10.0%
10.0%
10.0%
10.0%
12.5%
12.5%
12.5%
12.5%
12.5%
12.5%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
0
0
7
15
15
16
16
20
21
21
25
26
26
44
44
45
45
46
46
47
47
48
48
49
49
50
50
51
51
52
52
0
14
18
19
23
24
24
41
41
42
64
65
65
88
89
90
91
92
92
93
94
95
96
97
98
99
100
101
102
103
104
21
29
37
57
58
59
60
81
82
84
85
86
109
110
111
112
113
114
139
140
141
143
144
146
147
149
150
152
153
155
156
269
Timber
Low Case Assumptions
The hinterland traffic is expected to grow at the rate of 1.5%.
Vizhinjam port will provide good timber handling facilities and ample storage space at
competitive rates.
Share of Vizhinjam over the forecast period is expected to go up to 5% of the

hinterland by the end of forecast period, owing to general port development and
increase in timber trade in the hinterland.
Base Case Assumptions
The hinterland traffic is expected to grow at the rate of 1.5%.
Vizhinjam port will provide good timber handling facilities and ample storage space at
competitive rates.
The share of Vizhinjam over the forecast period is expected to go up to around 10% of
the hinterland by the end of forecast period owing to capacity addition and
development of organised timber processing units in the hinterland.
High Case Assumptions
Vizhinjam is expected to improve its own infrastructure and cargo handling facilities,
thereby improving its operational performance. Saw mill owners are expected to shift
to Vizhinjam port, mainly from Tuticorin, on account of advanced timber handling
facilities and vast storage spaces at competitive prices, consequently leading to
increase in timber traffic through the port.
The potential traffic is assumed to grow at a CAGR of 1.5% over the forecast period.
Vizhinjams share in the hinterland traffic is expected to increase up to 15% of the

hinterland by the end of forecast period owing largely to commissioning of new units in
the port proximity.
Vizhinjam would provide state of the art timber handling facilities at competitive rates.
It would also be able to provide adequate storage space and easily accessible custom
clearance windows on the port site.
270
Raw Cashew
16. Raw Cashew

This section explores raw cashew traffic potential for Vizhinjam port.
Key findings
India is the largest producer, processor and exporter in the world. India has a share of
above 40% in total world export.
Raw cashew is imported in break bulk vessels as well as containers, whereas

cashew kernels are exported primarily through container ships.
The cashew industry is concentrated in Kerala with around 700 registered processing
units, employing around 0.3 million workers. At present, only around 50 per cent of
the raw nut requirement of the industry in the country, estimated at over 1.2 million
tonnes is produced indigenously. On the other hand, only one-third of the nut
requirement for the processing units in Kerala is met by local production. Remaining
is imported from the African countries like Ivory Coast, Guinea Bissau, Benin and
Tanzania.
At all India level, Kerala has a share of over 50% in raw cashew imports.
Vizhinjam is very strategically located for raw cashew imports. It has Kollam to its
north at a distance of 80 kms and Nagercoil to its south at a distance of 63 km.
Currently, most of the requirements of raw cashew imports of Nagercoil and Kollam is
met through Tuticorin and Cochin respectively.
By virtue of its location on the west coast near cashew processing centres in Kollam
and Nagercoil district, Vizhinjam can be an attractive location if it offers discount to
such break bulk vessels.
In a base case scenario, it is estimated that Vizhinjam port can attract raw cashew
traffic of around 133,000 tonnes in 2043-44 in break-bulk vessels.
271
16.1
Raw Cashew
Introduction
India imports raw cashew primarily from the West African countries to meet the needs of
cashew processing units. On the other hand, it exports cashew kernels and cashew
nutshell liquid. India is the largest producer, processor and exporter in the world. India has
a share of above 40% in total world export.
Raw cashew is imported in break bulk vessels as well as containers, whereas cashew
kernels are exported primarily through container ships.
Table 16.1
Import of Cashews: India
(tonnes)
Partner
Country
Cote d Ivoire
Guinea-Bissau
Benin
Tanzania
Indonesia
Ghana
Mozambique
Gambia
Nigeria
Other countries
Region
Western Africa
Western Africa
Western Africa
Eastern Africa
Asia
Western Africa
Southern Africa
Western Africa
Western Africa
Total World
2003
2004
2005
2006
2007
2008
77,802
70,841
47,084
66,638
50,252
31,864
35,689
5,595
22,006
28,976
117,685
81,444
48,611
66,924
42,914
30,600
42,508
8,968
18,821
23,059
138,151
89,078
55,215
46,959
77,737
31,503
32,213
12,498
16,415
24,878
196,160
57,670
67,391
67,652
43,878
47,781
27,309
22,873
21,793
21,864
194,543
111,247
57,479
39,901
49,109
31,080
22,279
22,521
17,804
23,145
219,088
85,444
84,568
65,395
61,182
43,117
34,785
24,095
13,907
24,994
436,747
481,534
524,647
574,371
569,108
656,575
%
Share
5-Year
CAGR
33%
13%
13%
10%
9%
7%
5%
4%
2%
4%
23%
4%
12%
0%
4%
6%
-1%
34%
-9%
-3%
8%
Source: GTIS
Total cashew import in India recorded 656,575 tonnes in 2008. In the last five year it grew
at a CAGR of 8%. On the other hand, cashew kernels export totalled 118,540 tonnes in
2006-07, growing at a CAGR of 3.8%.
Table 16.2
Export of cashew kernels from Kerala and India
Kerala*
Year
India
Kerala's Share (%)
Quantity
(MT)
Value
(Rs. Crores)
Quantity
(MT)
Value
(Rs. Crores)
Quantity
(MT)
Value
(Rs. Crores)
49874
54717
66859
68119
79950
74376
72860
1152.36
971.11
1216.96
1204.56
1715.94
1622.82
1504.87
89155
98203
104137
100828
126667
114143
118540
2049.6
1788.7
1933.02
1804.43
2709.24
2514.86
2455.5
55.04
55.72
64.2
67.56
63.12
65.16
61.46
56.22
62.96
62.96
66.76
63.34
64.53
61.29
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
* Export through Cochin port,

272
16.2
Raw Cashew
Hinterland analysis
Kerala and Tamil Nadu put together contribute 21% of total cashew production and 23% in
terms of area cultivated in India.
Table 16.3
Cashew area, production, and yield
2006-07
2007-08
2008-09
2008-09
State
A
APY
APY
APY
%
Share
%
Share
Kerala
Karnataka
Goa
Maharashtra
Tamil Nadu
Andhra Pradesh
Orissa
West Bengal
Gujarat
NE States
Others
80
102
55
164
123
171
125
10
4
15
5
72
52
29
197
60
99
84
10
4
11
2
900
700
690
1,500
670
890
860
1,000
900
700
500
84
103
55
167
123
171
131
10
4
15
5
78
56
31
210
65
107
90
10
4
12
2
900
710
700
1,500
700
900
860
1,000
1,000
750
500
70
107
55
170
131
182
137
11
6
16
8
75
60
30
225
68
112
95
11
4
12
3
90
720
700
1,500
710
920
865
1,000
700
750
460
8%
12%
6%
19%
15%
20%
15%
1%
1%
2%
1%
11%
9%
4%
32%
10%
16%
14%
2%
1%
2%
0%
Total
854
620
820
868
665
860
893
695
900
100%
100%
Note:
A - Area in '000 Ha.
P - Production in '000 MT.
APY - Average Productivity in Kg per Hectare
Source: Directorate of Cashew nut and Cocoa Development
Table 16.4
Cashew processing units in India - 2005-06
Processing
Utilization (000 MT)
Processing
Units (Nos.)
Capacity
Kerala
Karnataka
Goa
Maharashtra*
Tamil Nadu
Andhra Pradesh
Orissa
West Bengal
Chhattisgarh
NE States
432
266
45
2,200
4,17
175
60
30
3
22
Total
3,650
States
Indigenous
Import
Total
700
65
21
20
565
95
11
8
-15
67
45
21
20
294
92
11
8
-15
320
20
--225
------
387
65
21
20
519
92
11
8
-15
1,500
573
565
1,138
Note: * Includes 1850 small scale cottage industry

Source: Directorate of Cashew nut and Cocoa Development
273
Raw Cashew
The cashew industry is concentrated in Kerala with around 700 registered processing
units, employing around 300,000 workers. At present, only around 50 per cent of the raw
nut requirement of the industry in the country, estimated at over 1.2 million tonnes is
produced indigenously. On the other hand, only one-third of the nut requirement for the
processing units in Kerala is met by local production. Remaining is imported from the
African countries like Ivory Coast, Guinea Bissau, Benin and Tanzania.
At all India level, Kerala has a share of over 50% in raw cashew imports.
Table 16.5
Keralas share in cashew import
(%)
% Share
Year
Quantity
Quantity
Value
2000-01
152,508
61.2
57.5
2001-02
191,574
53.9
52.9
2002-03
249,931
62.4
62.5
2003-04
294,511
65.1
64.9
2004-05
283,132
48.9
48.3
2005-06
306,730
54.3
52.5
2006-07
322,441
55.0
53.6
Note: Import through Cochin Port,

Vizhinjam is very strategically located for raw cashew imports. It has Kollam to its north at
a distance of 80 kms and Nagercoil to its south at a distance of 63 km (See Figure 16.1).
Currently, most of the requirements of raw cashew imports of Nagercoil and Kollam is met
through Tuticorin and Cochin respectively. Table 16.6 reveals that Vizhinjam has a distinct
distance advantage from the two most important cashew processing units - Kollam in
Kerala and Nagercoil in Tamil Nadu.
Table 16.6
Distance matrix for Cashew processing units
(Km)
Road
Kollam
Nagercoil
Kochi
Tuticorin
Cuddalore
Vizhinjam
135
278
210
124
636
579
80
63
Source Drewry
274
Raw Cashew
Figure 16.1
Hinterland of Vizhinjam port for Raw Cashew
16.3
As there is locational advantage, using proposed Vizhinjam port may offer cost savings to
the raw cashew importers. The current cost of raw cashew imports is as follows:
Table 16.7
Inland Logistics cost of raw cashew import
Kochi
Kollam
Nagercoil
10,000
27,000
Container Transportation Cost INR per Container

Tuticorin
Vizhinjam (estimate)
26,000
9,000
4,000
3,200
Source: Drewry Research Market Survey
Table 16.8
Inland Logistics cost of raw cashew import
Kochi
Kollam
Nagercoil
588
1,588
Container Transportation Cost INR per Tonne

Tuticorin
Vizhinjam (estimate)
1,529
529
240
189
Source: Drewry Research Market Survey
275
Raw Cashew
As it is evident from the above Table 16.7 and 16.8, it is amply clear that raw cashew
importers will benefit tremendously from the Vizhinjam port.
16.4
Raw Cashew import forecast

As a result of market survey following issues emerged with regard to raw cashew import.
There has been shift away from break bulk vessels to container vessels for raw
cashew import because
there has been tight supply and high chartering cost of break bulk vessels.
there is increased pilferage in break bulk vessels.
containers can be used even for a small volume of cargo (under 100 tonnes)
whereas around 5-6000 tonnes of cargo has to be consolidated for break bulk
vessels.
There is a loss in break bulk vessels as raw cashew is generally packed in second
hand jute bags.
Going forward containers are expected to be used for import of raw cashew.
As per raw cashew importers, they will be keen to use Vizhinjam Port provided following
issues are taken care of by the port authorities:
There is not much unionisation of labour
Availability of local transport
Speedy custom clearance
Availability of storage facilities of containers
Level of terminal handling charges
Assumptions
Ratio of domestic production in Kerala to the total Requirement
Raw cashew per container (tonne)
On an average cashew kernel produced is one fourth of raw
0.3
17
0.25
cashew nut processed

Capacity utilisation
80%
No. of days of operation
330
Raw cashew weight in a bag (kg)
85
Level of containerization
90%
It is not a profitable venture to plant cashew as any other cash crops are more lucrative. Therefore, it
is expected that there will be increased reliance on imports from Africa
276
Raw Cashew
Table 16.9
Raw cashew import forecast
Share of Break
Share of
Bulk Vessels
Container
(tonnes)
Ships (tonnes)
Year
% Growth
Imported Raw
Cashew (tonnes)
Raw Cashew Import

Volume (teu)
FY14
489,740
48,974
440,766
25,927
FY19
601,573
60,157
541,415
31,848
FY24
731,905
73,191
658,715
38,748
FY29
856,716
85,672
771,045
45,356
FY34
993,169
99,317
893,852
52,580
FY39
1,151,355
115,136
1,036,220
60,954
FY44
1,334,736
133,474
1,201,263
70,663
Raw cashew is imported from east and West Africa through Cochin, Mangalore and
Tuticorin ports. By virtue of its location on the west coast near cashew processing centres
in Kollam and Nagercoil district, Vizhinjam can be an attractive location if it offers discount
to such break bulk vessels. In the past, ports have given conditional offers to such vessels.
A case in point is Tuticorin port. It offered 50 per cent rebate in wharfage to the whole
quantity of imported raw cashew as break bulk cargo. The concession was extended for
storage of raw cashew nut allowing free days from 5 to 10 days. In addition, Tuticorin port
offered 10% rebate in the Marine charges to container vessels carrying raw cashew nuts,
which make direct calls to Tuticorin Port from Africa provided 80% of container carrying
raw cashew nuts are destined for Tuticorin Port, which should be the first Port of Call.
277
Coastal Shipping
17. Coastal Shipping
This chapter focuses on the potential of Vizhinjam port in attracting coastal traffic.
Coastal traffic has been mainly explored considering demand of construction materials
like cement, marbles, and tiles.
Key findings
Coastal shipping in India has remained at a low level. In 2006-07, the share of
coastal traffic in total throughput of Indian ports was 20%.
Dismal growth in coastal shipping and decline in its share in national throughput is
the consequence of constraints that it faces in terms of operational, fiscal,
institutional and legislative issues.
marbles and tiles, these commodities are imported from northern part of the
country.
Fragmented market, Multiple handling, More time taken in transit, Requirement of

door to door services, and Lack of return cargo are some of the factors which may
hinder surge in coastal shipping.
According to the Drewry estimate, coastal traffic of cement is expected to grow at a

CAGR of 7% from 51.8 thousand tonnes in 2007-08 to 505.5 thousand tonnes in
2043-44.
278
17.1
Coastal Shipping
Introduction
Exim cargo registered a CAGR of 14% from 2002-03 to 2006-07. During the same period
costal traffic has increased at a CAGR of 2%. In this period the share of coastal traffic in
total throughput of Indian ports has declined from 28% in 2002-03 to 20% in 2006-07. It is
evident from the following figure.
Millions
Figure 17.1
Development of traffic : Coastal vs Exim
800
30%
600
25%
400
20%
200
15%
10%
2002-03
2003-04
Coastal Cargo
2004-05
Exim Cargo
2005-06
2006-07
% share of coastal cargo
Source: IPA
Dismal growth in coastal shipping and decline in its share in national throughput is the
consequence of constraints that it faces in terms of operational, fiscal, institutional and
legislative issues (See Figure 17.2).
Figure 17.2
Indian coastal shipping Constraints & Impediments
Operational
Fiscal
Institutional
Legislative
Higher manning scales, duty paid

bunkers, stores, spares etc.
No duty concessions imported spares

(40%) bunker (35%)
No independent governing
body
No specific legislation
No economies of scale, obsolete

tonnage, shortage of Officers
No concessional finance for ship

acquisition & developing minor ports
No common regulation /
procedure especially for
minor ports
Low productivity at ports high time

spent
Insufficient budget allocations

shipping
Competition from road & rail

services
No infrastructure status / tax holidays
Needless stringent requirements for

design/construction
Lack of low cost ship repair facilities
Inadequate facilities at Ports &

Road/Rail Connectivity & high Costs
Repair problems acute for passenger

vessels small / confined space
Documentation similar to
overseas shipping
Tardy implementation of
various study group /
committees suggestions &
recommendation
Low integration with

IWT/Minor Ports
Source: Ministry of Transport, Government of India
Coastal shipping regulation in India

Coastal vessel means a vessel exclusively engaged in the carriage by sea of passengers
or goods from any port or places in India to any other port or places in India subject to
production of Coasting license issued under the Merchant Shipping Act, 1958 by the
279
Coastal Shipping
Competent Authority. Such vessels include the vessels pertaining to Coastguard / Indian
navy.
Cabotage Law
The coasting trade of India is exclusively reserved for Indian ships and for this purpose a
ship chartered by a citizen of India or a company which satisfied the requirements laid
down in section 21 of the Merchant Shipping Act, 1958 will be deemed to be an Indian
ship. A foreign ship is not allowed to ply in the coasting trade of India except under a
license granted by an officer authorized to issue it.
Any party involved in coastal trade in India can employ foreign flag vessels subject to
clearance by Indian National Shipowners Association (INSA) that no suitable Indian flag
vessels are available. Further it should be approved by DG Shipping.
17.2
Existing coastal/rail/road movement in the hinterland of Vizhinjam port

marbles and tiles, these commodities are imported from northern part of the country (See
17.3 for pictorial representation). The existing movement from the northern part of the
country to Kerala has been presented in Table 17.2 to 17.4. Our analysis shows that total
logistics cost of transportation will be less if it is moved by coastal shipping. But there are
bottlenecks in terms of more time taken and loss in cargo volume because of multiple
handling. Moreover, there is also paucity of return cargo. These cargoes can be tapped if
considerable cost advantage is given to the break bulk vessels. Rice and wheat
Table 17.1
Existing coastal/rail/road movement in the region
Key Commodities
Corridors
Cement
Pipavav New Mangalore

Pipavav-Cochin
Kishangarh Cochin
Kishangarh Bangalore
Morbi Cochin
Morbi Bangalore
Vadodara Cochin
Vadodara - Bangalore
Delhi Cochin
Marbles
Tiles
Chemicals
Car
Current Modes of
Transportation
Sea/Rail/Road
Shipping/Rail/
Road
Shipping/Road
Road
Shipping/Road
280
Coastal Shipping
Figure 17.3
Coastal Shipping potential
281
Coastal Shipping
Table 17.2
Movement of cement into Kerala
Financial Year
Maharashtra-Rail
Total* (Rail + Road)
(tonnes)
FY05
16,385
32,770
FY06
14,863
29,726
FY 07
22,308
44,616
* Estimated
Source: DGCIS
Table 17.3
Movement of rice into Kerala
(tonnes)
Financial year
Maharashtra
Haryana
Punjab
Total-Rail
Total* (Rail +
Road)
FY05
40,846
51.504
116,518
157,416
524,720
FY06
27,247
80,296
151,758
259,301
864,337
FY 07
7,909
22,303
64,946
95,158
317,193
* Estimated
Source: DGCIS
Table 17.4
Total movement of wheat into Kerala
(tonnes)
Financial
Maharashtra
Haryana
Punjab
Rajasthan
Delhi
year
Total-
Total*
Rail
(Rail +
Road)
FY05
7,026
108,830
55,550
21,180
FY06
7,422
141,534
252,008
23,765
FY 07
2,502
29,032
38,165
28,067
192,586
641,953
424,729
1,415,763
97,766
325,887
* Estimated
Source: DGCIS
17.3
Coastal traffic forecast

It is anticipated that there will be a growth in coastal shipping but at a slow pace due to
factors mentioned above. Specifically, shipping has following bottlenecks especially for the
transportation of marble and tiles.
Fragmented market so making large consignment is a difficult task, which may be prerequisite for shipping.
282
Coastal Shipping
Multiple handling may lead to breakage as domestic cargo is transported in loose

(whereas export cargo is transported in wooden crate).
Time taken may be more than other modes of transportation.
Nearest port is over 700 km from the production region. The maximum distance
between any two points is around 2,500 km. Coastal shipping may not present great
benefits.
Every customer is looking for door to door services. Shipping alone will not be able to
provide such a service.
Lack of return cargo
With the growth in housing sector and industrial development in Kerala, demand for
cement, marbles and tiles is expected to be growing. Therefore it is expected that
Vizhinjam may be able to attract bulk vessels carrying cement and container vessels
carrying marble and tiles.
According to the Drewry estimate, coastal traffic of cement is expected to grow at a CAGR
of 7% from 51.8 thousand tonnes in 2007-08 to 505.5 thousand tonnes in 2043-44. The
detailed analysis of container trade including marble and tiles have been done in Part I of
this report.
Due to dynamic and differential regulation in the transportation of foodgrains across
various states, it is difficult to anticipate coastal shipping of rice and wheat. Moreover, the
problems with shipping remain the same as that of the tiles and marbles.
283
Coastal Shipping
Table 17.5
Coastal traffic forecast: Vizhinjam port
Year
2007-08
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
2033-34
2034-35
2035-36
2036-37
2037-38
2038-39
2039-40
2040-41
2041-42
2042-43
2043-44
Market Size in the Coastal Areas of

Maharashtra, Karnataka and Kerala
and ('000 tonnes)
Cement
Marble
Tiles
2,032
3,459
3,600
3,747
3,900
4,062
4,265
4,478
4,702
4,937
5,184
5,443
5,715
6,001
6,301
6,616
6,947
7,294
7,659
8,042
8,444
8,866
9,309
9,775
10,264
10,777
11,316
11,881
12,475
13,099
13,754
14,442
1,056
1,901
2,053
2,218
2,395
2,587
2,742
2,906
3,081
3,265
3,461
3,669
3,889
4,123
4,370
4,632
4,910
5,205
5,517
5,848
6,199
6,571
6,965
7,383
7,826
8,295
8,710
9,146
9,603
10,083
10,587
11,117
324
617
679
733
791
855
915
979
1,047
1,120
1,199
1,283
1,360
1,441
1,528
1,620
1,717
1,820
1,929
2,045
2,167
2,297
2,435
2,557
2,685
2,819
2,960
3,108
3,263
3,427
3,598
3,778
% Market Share of Coastal Shipping
Total Volume of Coastal Shipping

('000 tonnes)
Total Volume at Vizhinjam Port

000 tonne
000 teu
Cement
Marble
Tiles
Cement
Marble
Tiles
Cement
Marble
Tiles
51%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
70%
17%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
22%
10%
18%
18%
20%
22%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
1,036.7
2,421.6
2,519.8
2,622.6
2,730.3
2,843.1
2,985.3
3,134.6
3,291.3
3,455.8
3,628.6
3,810.1
4,000.6
4,200.6
4,410.6
4,631.2
4,862.7
5,105.9
5,361.2
5,629.2
5,910.7
6,206.2
6,516.5
6,842.3
7,184.5
7,543.7
7,920.9
8,316.9
8,732.8
9,169.4
9,627.9
10,109.3
180.0
414.9
448.1
483.9
522.7
564.5
598.3
634.2
672.3
712.6
755.4
800.7
848.8
899.7
953.7
1,010.9
1,071.5
1,135.8
1,204.0
1,276.2
1,352.8
1,434.0
1,520.0
1,611.2
1,707.9
1,810.3
1,900.8
1,995.9
2,095.7
2,200.5
2,310.5
2,426.0
32.4
111.0
122.1
146.6
174.1
213.7
228.7
244.7
261.8
280.1
299.7
320.7
339.9
360.3
382.0
404.9
429.2
454.9
482.2
511.2
541.8
574.3
608.8
639.2
671.2
704.8
740.0
777.0
815.8
856.6
899.5
944.4
51.8
121.1
126.0
131.1
136.5
142.2
149.3
156.7
164.6
172.8
181.4
190.5
200.0
210.0
220.5
231.6
243.1
255.3
268.1
281.5
295.5
310.3
325.8
342.1
359.2
377.2
396.0
415.8
436.6
458.5
481.4
505.5
0.4
0.8
0.9
1.0
1.0
1.1
1.2
1.3
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.3
2.4
2.6
2.7
2.9
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
4.6
4.9
0.1
0.4
0.4
0.5
0.6
0.7
0.8
0.8
0.9
0.9
1.0
1.1
1.1
1.2
1.3
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.5
2.6
2.7
2.9
3.0
3.1
284
Cruise Market
18. Cruise market
This section intends to understand the potential for developing a cruise terminal at
Vizhinjam port and assess the potential traffic which could be targeted.
Key findings
Kovalam is a major tourist destination in India. This can be leveraged to attract cruise
vessels at Vizhinjam
High port dues and inadequate cruise vessel and passenger handling facilities are
seen as a major deterrent for cruise operators in India
A marketing and promotion strategy along with world class specialised cruise facilities
at competitive port charges can promote cruise tourism at Vizhinjam
Average passenger spend per port is around USD 100-120. This could bring in
revenue of around USD 80-96,000 per vessel call
Collaborative effort of State government, players in the hospitality industry and cruise
operators are a prerequisite
285
18.1
Cruise Market
Overview
Tourism has a very important role in Keralas economy and is one of the major tourism
economies of the country. Kerala state provides multiple and diverse tourist destinations,
which includes beaches, backwaters, hill stations and wildlife sanctuaries. Vizhinjam port is
in Kovalam, which is known for its beaches and is very popular among tourists.
Table 18.1
District wise break-up of tourists in Kerala in 2008
No.
Districts
Foreign
Annual Growth
Domestic Annual Growth
ALAPPUZHA
49,866.0
23.2%
234,700.0
37.5%
ERNAKULAM
193,013.0
16.9%
1,509,686.0
36.1%
IDUKKI
KASARAGODE
5
6
7
51,025.0
9.8%
531,970.0
5.3%
825.0
-5.0%
135,581.0
0.3%
KOLLAM
8,728.0
-1.4%
180,943.0
24.3%
KANNUR
3,143.0
2.5%
395,121.0
5.3%
KOZHIKODE
9,966.0
-0.5%
595,985.0
4.4%
KOTTAYAM
27,230.0
-0.5%
230,831.0
21.9%
MALAPPURAM
10,166.0
4.1%
323,448.0
3.3%
10
PALAKKAD
785.0
27.6%
324,399.0
2.8%
349.0
-36.2%
59,832.0
-1.9%
3,398.0
-26.8%
1,671,174.0
8.1%
234,797.0
21.1%
1,102,115.0
16.2%
5,638.0
37.7%
295,465.0
15.3%
598,929.0
16.1%
7,591,250.0
14.3%
11
PATHANAMTHITTA
12
THRISSUR
13
THIRUVANANTHAPURAM
14
WAYANAD
Total
Source: Government of Kerala-Tourism Department
The total tourist arrival in Kerala shows that almost 0.6 million foreign tourists arrived in
Kerala in 2008, while domestic tourists were close to 7.6 million. Tiruvananthapuram
districts share in foreign and domestic tourist is around 21% and 16% respectively. It is
quite evident that Tiruvananthapuram district is a major foreign and domestic tourist
destination in Kerala. Vizhinjam is part of Tiruvananthapuram district, and considering the
tourism activity and geographical location, Vizhinjam port is well placed to attract cruise
vessels.
286
Cruise Market
Figure 18.1
Break-up of foreign tourist arrival in 2008
23.6%
43.9%
8.7%
7.3%
3.5%
U.K
FRANCE
GERMANY
5.9%
U.S.A
7.2%
MALDIVES
SWEEDEN
Others
Source: Government of Kerala-Tourism Department
Broader mix of tourists in Kerala shows that Kerala has potential to attract and serve
varying tourists needs. However, despite its prominence on the tourist map of India, Kerala
is yet to make progress in order to increase its share in Cruise market. Kerala offers a
window of around 5-6 months (November to April) for cruise vessel operations and can
leverage its climate and culture to promote itself as future cruise destination. Kerala has
advantage that it can offer diverse option to interest tourists along with shopping options
for handicrafts. Further, Kovalam is also known for its traditional ayurvedic treatment,
which is quite popular among foreign and domestic tourists.
18.2
Advantages for local economy

Cruise tourists have high disposable income and propensity to spend on leisure activities
and shopping. As per industry estimates, average passenger spend per port is around
USD 100-120. The economic benefit from cruise ships would in the form of expenditure
made by passengers and crew on various goods and services. This would primarily
include:
Shore excursion
Restaurants and hotels
Local transport
Duty free shop
Ship Supplies
Ancillary services i.e. Telephone, internet, medical, customs, etc.
This is likely to create new job opportunities and provide boost to the local economy, which
is primarily dependent on tourism industry. In addition to this crew of the ship also spend at
18.3
Potential for Vizhinjam

Cruise industry had recorded an annual average passenger growth rate of 7.4% per
annum between 1990 and 2008. Major players in the cruise industry focus on America and
European markets. However, they are increasingly looking for alternate destinations in off-
287
Cruise Market
season (winters). India, with its vast coast line and tourist attractions can provide good
alternate to global operators, particularly looking at short-duration cruise (3-6 days).
Cruise tourism in India holds a good opportunity, as increasing number of Indians are
going for international cruises. As per market estimates, around 70,000 Indians went for
international cruises in 2008-09, compared to around 35,000 in 2003-04. The Y-o-Y growth
in the traffic is expected to be around 20-25%. Particularly, first timers from India go to
Singapore or Malaysia due to proximity and shorter cruises, compared to America and
Europe.
As a cruise destination, Vizhinjam has commercial potential provided it develops an
efficient and world class cruise terminal. Currently, Kovalam region has been focusing on
general tourism and resort based facilities. However, this could be changed by developing
a passenger terminal to attract cruise vessel traffic. It is very important to convince cruise
lines that port is committed to develop and provide the required infrastructure and
passenger facilities.
It is expected that good infrastructure supported by favorable policies and tariffs can assist
in attracting cruise vessels in India. Further, bunker prices in India are almost 33% higher
than international prices. To avoid this cruise vessels tend to include Colombo in itinerary.
Vizhinjam, being a minor port have the flexibility of setting up tariff as per the market
dynamics and can provide the required infrastructure at competitive tariff. There are
number of factors, which a cruise company will consider before committing to a particular
port. This primarily includes:
Safe access for the vessel
A protected berth
Large passenger terminal facilities
Transport facilities for excursions
Shopping (Duty free shops) and recreational facilities
Ship chandler for supplies
18.3.1 Market Estimation

In 2008-09 Kochi port handled 36 cruise ships, compared to 43 in the previous year. In
fact, Kochi has been handling cruise vessels despite having limited facilities for
passengers and vessel handling. However, to take advantage of increasing number of
Indian tourists, cruise line operators have shown interest in Kochi port and have been
trying to include it in their itinerary. In 2009, Louis Cruises made Kochi its home port in
India for providing weekly cruise itineraries from Kochi to Maldives and Colombo. As per
the initial estimate around 60,000 Indian tourists are expected to cruise between
December 2009 and April 2010. The first voyage from Kochi commenced on December
02, 2009 to Maldives. Louis Cruises has deployed MV Aquamarine, having a capacity of
1,200 passengers.
However, in January 2010, Louis Cruises India, decided to pull out of Kochi due to high
port charges, which were putting immense pressure on operating costs and profitability of
the company. As per Louis Cruises, in Colombo, the charge for a day is USD 4,000, while
288
Cruise Market
at Cochin Port per day charges are USD 12,500 (As per CHPT). This is despite Kochi port
offering 33.33 % discount on the charges approved by the TAMP. Further, Kochi port was
also not levying a passenger fee. It is reported that Louis cruises suffered a losses of
around USD 3.5 million due to higher tariff. As per the Louis Cruise, India lacks a proper
policy to encourage cruise shipping, which results in higher cost of operations, poor port
infrastructure and uncoordinated embarkation procedures. The company had announced
to lay-off and relocate 200 crew members hired especially for the cruise operations in
India.
Figure 18.2
Potential cruise routes
In the past, Star Cruises faced a similar situation and decided to pull out of Indian market
in 2007 after operating for two seasons. Star cruises had deployed Superstar Libra with
total capacity of more than 1,400 passengers. In 2007, Indian Ocean Cruises, Indian arm
of the Foresight Group launched a new service connecting Lakshadweep, Malabar Coast
and Sri Lanka. The vessel deployed MV Ocean Odyssey had a limited capacity of around
250 passengers and 120 crew. However, Indian Ocean Cruises also had to stop the
services due to high operating costs.
Despite the market potential, Vizhinjam port needs to have a marketing plan to promote
Vizhinjam as a cruise destination. This could be achieved through cooperation between
various the following agencies:
1.
Kerala Government- Tourism department
2.
Hospitality industry- Major hotels and resorts
3.
International Travel agencies
4.
Cruise terminal operators
5.
Cruise operators
289
Cruise Market
Considering the past trends and the market potential, Vizhinjam port can expect to handle
around 30-35 cruise vessel calls/ annum in the initial years of operations, which could
eventually increase to around 120-130 calls per annum in the long run. Further, if
Vizhinjam can develop adequate port and supporting infrastructure then it may be
considered by some of the big operators also and that can assist in attracting some of the
larger ships having capacity in the range of 2,000-3,000 passengers. The estimated cruise
vessels call has been presented in Table 18.3.
Table 18.2
Cruise vessels traffic forecast
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
2033-34
2034-35
2035-36
2036-37
2037-38
2038-39
2039-40
2040-41
2041-42
2042-43
2043-44
Cruise Vessels (no. of sailings)
No. of Passengers
30
30
60
60
60
60
60
90
90
90
90
90
90
90
90
90
90
120
120
120
120
120
120
120
120
120
120
120
120
120
120
24,000
24,000
48,000
48,000
48,000
48,000
48,000
72,000
72,000
72,000
72,000
72,000
72,000
72,000
72,000
72,000
72,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
96,000
290
Ship Repair Market
19. Ship repair market

This section intends to understand key drivers for ship repair market and potential for
developing a ship repair yard at Vizhinjam.
Key findings
The key determinant of shiprepair demand is the shipping that is active within the
vicinity of the proposed yard. Vizhinjam location means that it potentially will benefit
from traffic calling at ports on the lower west coast of India. Additionally, Vizhinjam
will have considerable shipping passing through main East West shipping route.
Vizhinjam is between two already established repair facilities i.e. Dubai and
Singapore.
To compete with established repair facilities Vizhinjam will have to establish trained
and motivated workforce with superior independent inspection /quality control
department.
Typically a yard might expect to capture up to 10% of its target market. However, this
could vary according to the trading routes, calling frequency, deviation distances,
ownership and competition.
Conclusions
With increasing global fleet size demand for ship-repairs is expected to grow thus
providing new opportunities for existing and new ship-repair yards. However, the
competition is quite intense. Yard which can offer shorter repair duration at a competitive
price will enjoy a competitive advantage. To effectively compete with the existing facilities
in the region and to provide a good alternate for the vessels in the target market,
Vizhinjam may have to opt for at least 2 graving docks capable of handling Panamax
vessels along with 4 land berths.
291
19.1
Ship Repair Market
Overview
The key determinant of shiprepair demand is the shipping that is active within the vicinity of
the proposed yard. Vizhinjams location means that it potentially will benefit from traffic
calling at ports on the lower west coast of India. Additionally, Vizhinjam will have
considerable shipping passing through main East West shipping route. However,
Vizhinjam is between two already established repair facilities. Tanker traffic heading into
the AG will probably have completed repairs in Singapore but the dry cargo vessels
coming from the AG will probably be in ballast and possible candidates for docking /repairs
Thus Vizhinjam could play a role subject to having the required facilities and very
competitive rates, comparable to Chinese ship repair facilities.
Tankers upon completion of cargo discharge require between 3-5 days to conduct tank
cleaning /gasfreeing. Usually having discharged in Japan/Korea/China the passage to
Singapore allows adequate time for cleaning and post repair as they head for AG the
passage provides time to test out the system.
Vizhinjam could also similarly position itself and although the passage to loading port is
shorter but enough for testing post repairs. But the considerations will be the provision of
tank farm and tanker repair reputation. Ship operators decide on the basis of earlier
experience, if any, and would like to feel assured that yard is able to keep to and deliver on
schedule and budget. For this reason although Japanese yards rates are high but their
reputation for delivery on time and per quotation bring in many repeat customers. Other
benefit at Japanese yards is that they have highly efficient inspection and quality control
department therefore the intensity of supervision requirement is less demanding and the
finished product is always excellent. Vizhinjam should emulate the Japanese model,
establishing a trained and motivated workforce with superior independent inspection
/quality control department.
19.2
Ship Repair Market

Shiprepair opportunities arise from the vessels that trade within the vicinity of the repair
yard, however it is the number of different vessels rather than journeys made that are the
primary basis for assessing the potential demand. The catchment fleet for the proposed
yard therefore has to be estimated through analysis of the shipping traffic statistics to
determine a population of vessels trading. The trading patterns of these vessels will have
to be examined to form the basis of determining the likely market share that the facility
should be able to attract.
A rigorous analysis of the catchment traffic will be to estimate potential capture rates for
dockings for a repair yard at Vizhinjam. This could vary and depend on the following
factors:
Ship type
Age distribution
Trading patterns
Call frequency
292
Deviation times
Future trade growth
Docking requirements.
Ship Repair Market
19.2.1 Market drivers

Demand for ship repair is driven by a number of factors:
Global ship fleet age profiles and class requirements.
Damage and incidents repairs.
Port state control and other inspections.
Freight market.
Sale drydockings.
Reactivation.
Trade growth, fleet growth and the regional disposition of trade.
Diversion considerations.
Vessel newbuilding quality.
Demolition market.
Owners'/managers' attitude to R&M.
Ship conversion.
Non-merchant shiprepair yard activities, e.g. the offshore oil industry.
19.2.2 Scheduled and unscheduled demand

Scheduled repairs to merchant ships provide the largest work element. They derive from
the need to undertake routine maintenance work and any other work necessary to keep
the vessel in a satisfactory, seaworthy condition. The main requirements for this work are
set out by the ships classification society.
Class Rules require the vessel to undertake periodic surveys the conditions of which
become more demanding as the vessel ages. This work involves drydocking and so,
clearly, is a major determinant of shiprepair demand. For most commercial ships today the
interval between drydockings averages 2 years. Owners requirements may exceed
those of the class society requirements, and hence repair demands reflect class
requirements, owners maintenance regimes and wear and tear arising from the ships
operation.
293
Ship Repair Market
Unscheduled repairs are obviously less predictable. Primarily, they are damage-related
arising from collisions, groundings, etc. or resulting from the effects of some form of
mechanical failure with varying degrees of seriousness. Less serious repairs may be
completed by the crew, deferred until the next docking, undertaken in port or carried out by
riding squads at sea. The main examples are:
19.3
Casualties
Port state control
Sale drydocking
Reactivation
Factor influencing capture rates for a yard. Scheduled and unscheduled

demand
Typically a yard might expect to capture up to 10% of its target market however this could
vary according to the trading routes, calling frequency, deviation distances, ownership and
competition. Additionally certain ship types have operational criteria or technical
complexities that influence their docking decisions. Distances from terminal or calling ports
is a key factor, and specifically the deviation distance that would be required to bring the
ship from its last port of call (or off its ballast leg routing) into any particular repair yard.
Ships that generally operate in sectors that have one-way cargoes will tend to have ballast
return journeys or will tend to operate on a tramp basis. Both of these factors increase the
level of competition that may be expected. During ballast journeys the ship will be in an
unloaded condition and hence ready for repair at any yard conveniently located to the
ballast leg and vessels that are tramping in order to minimise long ballast journeys without
income will tend to have a wider geographic coverage and can generally pick up a cargo to
discharge and reload close to the selected repair location. Ships operating on liner
services are most likely to repair close to terminal ports as they do not have ballast
voyages and will be partially loaded at intermediate ports. Container ships, car carriers and
some RoRo services are typical of this.
19.4
Types of repair dock

For small ships, there may be repair options using marine lifts, marine railways or slipways
but for the larger tonnage -primarily, the ocean-going vessels there are three primary
alternatives, namely:
Graving docks are large, excavated docks built on land and with a gate at the seaward
end. The ship enters the dock, the gate is closed and the dock is then pumped dry.
Floating docks are large, open ended, rectangular steel structures which have the
capability to lift ships out of the water. They are a saleable asset there is a sale and
purchase market for floating docks and they tend to be the cheapest and quickest means
by which a facility can expand its docking capacity.
Shiplifts comprise docking cradles (for ship transfer) on large, normally articulated steel
platforms (or marine elevators) which are able to lift ships out of the water and lower them
294
Ship Repair Market
back in again. Once lifted, the ship is then manoeuvred to one of the several shore
positions. The docking cradle and block arrangement has to be prepared specifically for
each vessel handled.
Each type of facility is constrained by its dimensions and/or available land area. This will
have a bearing on how well the facility can cope with more than one vessel at a time. In
addition, there will be a whole host of managerial and logistical elements that will
determine the efficiency of the yard or repair facility.
19.5
Repair yard basic needs

The following are some basic needs and issues for an efficient ship repair yard operation:
Water depth in the approaches and in the dock area that allows the handling of the target
vessel size.
Deep-water piers are a necessity for alongside repairs. The piers will need to be
supplied with appropriate cranage, power, water, access, etc.
Good access to workshops within which tasks such as steel fabrication, machining,
pipework and electrical fabrication can be undertaken either for the production of
new/replacement elements or to undertake repairs. The capacity for engine and other
equipment/gear repairs will be a further consideration.
Good access to storage areas. There will be a further need for outdoor areas for working
on ship structures and equipment, dismantling, assembling or re-assembling modules, etc.
There will be other miscellaneous physical requirements including offices, amenity areas,
car parks, vehicle loading/holding/unloading areas, cranes, lighting equipment, power
distribution facilities, security fencing, etc.
Facilities such as power, etc. need to be readily available and not subject to disruptions.
In addition to the physical factors, the repair facility will need the following capabilities and
characteristics:
The planning and timetabling of ship stemming the balance between one-off
owners and owners looking at block booking arrangements.
Good relationships with agents, etc.
Workloads in the fabrication shops and the implications for outside assembly
spaces.
The supply of steel and other inputs to the workshops.
Store levels, minimum stockholding levels and the speed/ability to re-stock.
Owners inputs and/or the need to bring in obscure parts (probably sourced from
overseas).
Transportation considerations to the site and within the site.
295
19.6
Relationships with sub-contractors.
Quality control, audit and information flows.
Accounting procedures.
Ship Repair Market
Opportunities for Vizhinjam

India lacks in good ship-repair facilities and a number of yards in India are predominantly
shipbuilding or naval yards, which also undertake some repair of merchant ships. Such
yards are not generally preferred by international ship-owners. Many ship-owners in India
still prefer to go to yards located outside India e.g. Dubai, Singapore, Colombo. With
increasing global fleet size demand for ship-repairs is expected to grow thus providing new
opportunities for existing and new ship-repair yards. However, the competition is quite
intense. Price is clearly an important criteria but so is duration of repair, as this represents
the amount of lost earnings for ship-owners. Therefore, a yard which can offer shorter
repair duration at a competitive price will enjoy a competitive advantage. The technical
competence and capacity of a yard to undertake different volumes and complexities of
repair work will also be significant factors in terms of competition.
Advantages for Vizhinjam
Proximity to main shipping route.
Increasing vessel traffic on the west coast particularly for coal and iron ore.
Passing vessel traffic.
Expected limited cost of capital and maintenance dredging.
Disadvantages for Vizhinjam
Strong competition from existing ship repair yards in Arabian Gulf, Sri Lanka and
Singapore.
Limited availability of trained manpower.
Very humid climate conditions, not very suitable for painting, particularly during
monsoon.
Kerala state perceived as prone to labour problems.
Needs to upgrade its international air connectivity for prompt imports of machinery and
spares.
19.6.1 Infrastructure requirement

To effectively compete with the existing facilities in the region and to provide a good
alternate for the vessels in the target market, Vizhinjam may have to opt for at least 2
graving docks capable of handling Panamax vessels along with 4 land berths. Table 19.1
provides the summary of the proposed infrastructure along with expected revenue and
capital costs.
296
Ship Repair Market
Table 19.1
Ship repair infrastructure, revenue and direct expenses
Facility Type -Graving Docks
No. Docks
No. of land Berths
Capital cost US$ mn
No. of vessels docked/year
Revenue US$ mn
Direct Costs US$ mn
2
4
70-80
100
40-50
35-40
The estimated capital cost for developing ship-repair infrastructure largely depends on land
acquisition costs and dredging costs. Therefore, any increase in these two cost
components can significantly inflate the total project cost.
297
Tariff and Revenues Forecast & Port Strategy
Part III
Tariff and Revenues Forecast & Port
Strategy
298
Competitive Positioning and Marketing
20. Competitive positioning and marketing

This section intends to understand the competitive environment of Vizhinjam port and its
likely impact on its positioning, port development and marketing strategy.
Key findings
Vizhinjam ports hinterland is shared by two existing major ports i.e. Cochin and
Tuticorin, therefore inter port competition is quite intense. Similarly, Colombo is
expected to provide stiff competition for transhipment traffic.
Vizhinjam port could act as catalyst in development of local economy. However, port
development at Vizhinjam would entail significant investment in breakwater, dredging
and land reclamation.
In addition to containers, Vizhinjam has potential to attract limited volume of general

cargo traffic.
Potential for developing cruise terminal at Vizhinjam port.
Conclusions
In view of the market uncertainties and competition, it is suggested that port opts for a
phased development plan. This provides flexibility for expansion as per the market
demand and helps in limiting initial capital investment. Further, a Multi-purpose port at
Vizhinjam could assist in attracting bulk and general cargo thus providing additional
revenue for port. Similarly, common port infrastructure can be used for developing a
cruise terminal, which could add to port income and also provide stimulus to local
economy.
299
20.1

Assessment of port
characteristics
Location
Hinterland
Identification
Marine Access
Hinterland
Connectivity
Assessment of
business environment
Identification of
competitive advantage
Existing hinterland
economic activity
Target markets
Competitive positioning
Developing
hinterland economic
activity
Development of strategy
content
Services required
Competition and
capacity
Business models
Partnerships and
alliances
Potential
opportunities
20.2
Formation of
core strategy
Port master plan
Port characteristics
Figure 20.1
Existing Fishing Harbour at
Vizhinjam
Figure 20.2
Proposed Vizhinjam port
location
20.2.1 Proposed port infrastructure (Based on Techno-economic feasibility

report prepared by L&T Ramboll)
Port facility
New break-water of around 3.9 kms to be built in phase 1.
20m draft after 1 nm from existing shore.
1km stretch of coast will be reclaimed for the port.
Container yard 6 km inland from the port.
Warehouse 4 km inland from the port.
Rail connectivity
Nearest railhead 10 km away: Balrampur.
Initially single track connectivity, which is to be expanded to double track later.
Three alternatives available for providing last mile rail connectivity to port.
300
Road connectivity
Road connectivity (NH-47) upto Kovalam.
Bypass under construction.
2km stretch to be developed to provide last mile road connectivity.
60m wide stretch of land to be acquired connecting port to bypass.
Initially two lanes, which will be expanded to four lanes.
Land availability:
15 hectares of backup land is available. Additional 105 hectares to be acquired for

Road and Rail development, warehousing, container terminal, truck terminal and
resettlement & rehabilitation.
460 acres (173 hectares) will be reclaimed in Phase1 of port development.
Other information
Main East-West shipping route 13nm away from Vizhinjam Port.
Minor port development in process eg. Azheekkal, Beypore, Ponnani, Alappuzha

and Thankasserry.
20.2.2 Hinterland of Vizhinjam port

District
Sector
Industries
Kottayam
Agriculture, Manufacturing
Rubber, food products, engineering
Kollam
Mining
Minerals and Mining
Thiruvananthapuram
Textile
Handlooms
Allepey
Handicraft
Coir products
Primary Hinterland
Secondary Hinterland
Kannur
Handloom, Power
Handlooms, Power, Bedi
Idukki
Agriculture
Agriculture and Forest Based
Thrissur
Textile, Ceramics
Power Looms, Handlooms, textile, Timber, tile
Palakkad
Textile
Power Looms, sericulture
Kozhikode
Agriculture
Rubber
Wayanad
Mining
Minerals and Mining
Ernakulam
IT
301
Figure 20.3
Hinterland of Vizhinjam
Kochi
Tuticorin
Vizhinjam
Primary hinterland
20.3
Business environment: Emerging opportunities
Policy adopted for setting up of SEZs in Kerala. Twenty-four new SEZs have been
approved.
Policy to attract investments in manufacturing, agro-processing and knowledge based

industries and services.
Support to strengthen and promote traditional industries.
Incentives to facilitate growth of IT sector through incentives.
Development of industrial parks and industrial corridors.
Considering the current thrust areas and policies, it seems that traditional industries will
continue to play vital role in Keralas manufacturing sector. In addition to this, services
sector is likely to witness increased investments and growth primarily led by IT sector.
302
20.4
20.4.1 Porters Analysis

Like other industries, port sector have also become very competitive over the years. Ports
are competing at global and regional scale. This has resulted in improved efficiency, lower
port tariffs, value added services like warehousing, increased automation and use of IT for
managing documentation and transportation of cargo, etc.
Porters Five Forces Model is useful in understanding the key parameters, which shape the
competitive scenario for the industry and helps in understanding the impact of each
variable. Following are the key market forces, which play an important role in developing a
competitive scenario in the port industry.
Figure 20.4
Porters Frame Work
303
Vizhinjam port will face intense competition from existing ports in the region and will have
to adopt proactive strategies to attract cargo from its immediate and secondary hinterland.
Similarly, for container transhipment traffic, Vizhinjam port will face very stiff competition
from Colombo port along with other transhipment hubs outside Indian subcontinent region.
1
Rivalry among the existing players
Inter port competition ports -: Vizhinjams shares a very large common secondary
hinterland with two existing ports i.e. Cochin and Tuticorin port. Therefore, the likely
competition for Vizhinjam for hinterland traffic is expected to be very intense. Further,
these ports have the advantage of existing supporting infrastructure, which is very
important for facilitating trade through any port. Similarly, for container transhipment
traffic, Vizhinjam has a strong competition from the Colombo port. Colombo is a
traditional transhipment hub on East West Shipping route and primarily serves the
Indian sub continent (ISC) market. It is also well positioned to serve the increasing
transhipment volumes from the ISC region. All major container shipping lines are
already using the Colombo port and see no major advantage in shifting hub port
activities to any new port in South India. In absence of any inherent advantage over
Colombo, the Vizhinjam port will have to compete very aggressively on price.
Intra port competition -: Intra port competition is primarily seen when port has
multiple terminals and operators for handling similar cargoes. In India this is quite
obvious in ports like JNPT, where three container terminals are in direct competition
and are targeting the same hinterland and cargo.
Threat of new entrant
Any new entrant adds to the existing competition, therefore, it is important to identify the
threat of possible new entrants. For a port a new entrant can be in form of a new port in
the region, competing for the same cargo or augmentation of facilities and cargo handling
capacities at the existing ports. The degree of threat depends on the following key
elements:
Capital Investment: - New port development requires heavy capital investment in civil
construction, equipments and development of supporting infrastructure coupled with
long gestation period. This acts as a strong entry barrier because any new entrant in
the port sector will have to have strong financial resources along with capability to
compete with the existing players. Typically, a new entrant is expected to provide
efficient services at lower costs.
Switching costs: The threat of a new entrant increases if the switching costs for
various users and service providers are not very high. In such a scenario existing ports
can register significant loss in the market share. This is very evident from the example
of JNPT, which has taken away the business from Mumbai port.
Cost advantage: If the new entrant is in a position to provide cost advantage in the
form of reduced inland costs, shipping costs, transportation time, higher efficiency i.e.
faster turnaround of vessels, deep draft, etc. then the threat of a new entrants
increase. However, the existing ports have the advantage of sunk costs, developed
supporting infrastructure, investments made by users in the form of warehouses, ICD,
CFS, etc. A new entrant would find it difficult to replicate this over short and medium
term.
304
Considering the above points, it can be said that Vizhinjam port faces relatively strong
threat of a new entrant is quite strong for both hinterland and transhipment traffic.
Commissioning of Vallarpadam terminal in 2010, may assist Vallarpadam in attracting
some new main line calls. This could result in partial shift of traffic from common
secondary hinterland to the new terminal, as some shippers will prefer direct service,
even if it results in marginal increase in inland haulage cost. Similarly, transhipment
traffic is also quite price sensitive and the shipping lines can easily shift from one hub
to another if it results in reduction in the overall network cost. Colombo is planning to
expand its capacity and can increase its overall container handling capacity to around
15-16 million TEUs. In addition to this, development of a Greenfield port in
Hambantota is likley to provide scope and infrastructure for developing additional
container handling capacity in southern Sri Lanka.
3
Threat of substitute: - Ports are vulnerable to changing production and demand

patterns. Vizhinjam port also faces limited threat of substitutes because the demand
for various containerised cargo generated in its hinterland can fluctuate with changes
in the commodity prices and production and consumption patterns. Importers of food
products, garments, handicrafts, tea, coffee, etc., enjoy strong bargaining power and
flexibility to buy from alternate suppliers from other competing countries. Further,
changing production patterns increases the threat of substitute for any port.
Manufacturing units in the hinterland can shift to new locations or regions to take
advantage of tax incentives, lower cost of production and availability of raw material.
This could lead to slower growth in hinterland traffic and underutilization of port
infrastructure. Change in technology could also lead to change in demand for certain
products. Like synthetic fibers can replace natural fibers i.e. jute, coir, cotton etc.
Similarly, transhipment container traffic growth can get adversely affected by
increasing volume of container traffic handled by direct mainline services. It is
expected that with growing traffic and improved port infrastructure, Indian ports will be
in a better position to attract increasing number of main line calls, thus reducing
dependence on feeder operations.
Bargaining power of users

Vizhinjam port is expected to operate in a very intense competitive environment thus
leading to strong bargaining power of various users i.e. carriers, shippers and tenants.
In a competitive environment, users will have alternative facilities and they will be in a
position to demand higher efficiency and lower tariffs. This is quite evident at various
transhipment hubs where major shipping lines are in a position to negotiate significant
volume discount. The changing industry dynamics have also resulted in stronger
bargaining power for some of the players. Recent mergers and acquisition in the liner
shipping industry has provided significant market share to some players. Thus putting
them in a very strong bargaining position with ports and other service providers like
transporters, rail operators etc. However, ports can limit the bargaining power of
users by entering into strategic partnership with users. Users, having equity stake or
strategic partnership in the port tend to invest in the port facilities thus making it
difficult for them to shift from the port or terminal.
Bargaining power of service providers

Currently bargaining power of service providers at ports is moderate. The most
influential lobby is the port labour union because they have a direct control over day to
305
day vessel and cargo related operations. However, private terminal operators have
limited bargaining power because no operator would like to disrupt the normal terminal
operations, as it would lead to lower efficiency and can lead to loss of business in the
medium and long run. However, if the service providers in the port have a significant
market share then they are able to influence users and enjoy relatively stronger
bargaining power. In case, individual service providers have a limited market share
then they tend to form an association to safeguard their interest and to negotiate with
port operators and authorities. These associations can be seen generally at various
ports i.e. Association of Custom House Agent, Ship agents Association, Transporters
Association, etc.
20.5

Considering the tough competition which Vizhinjam port is expected to witness from ports
in India and regional hubs like Colombo, it should adopt a suitable positioning strategy to
differentiate its services from competitors and to develop an optimum infrastructure to
handle available cargo and resulting vessel traffic. Positioning is how you differentiate your
product or service from that of your competitors and then determine which market niche to
serve. However, ports are part of the service industry where differentiation of the offerings
becomes quite difficult and the perceived advantages result in marginal gains. Therefore,
Positioning would have to focus more to the perception of the customers than to the
product or service differentiation. Some of the key differentiating factors for ports are:
Proximity to hinterland
Good rail and road connectivity
Adequate infrastructure for efficient operations
Experience of operators
Potential for expansion to handle future increase in traffic
20.5.1 Competitive advantage/disadvantage for Vizhinjam

Advantages
Proximity to International (East West) trade lane
Water depth of 20 m within 1 nm from the coast
Limited maintenance dredging
Tariff not regulated by TAMP
Scope of development of tourism infrastructure i.e. cruise terminal
New capacity; congestion free
Disadvantages
Limited immediate hinterland traffic
Large contested hinterland
306
Need for development of supporting infrastructure
Intense competition from ports in South India and Colombo
High initial capital outlay required for construction of breakwater
Limited land availability leading to significant dredging for land reclamation for port
and associated development
Limited potential for expansion of manufacturing sector in the immediate

hinterland
Total investment including FDI in Kerala state is lower as compared to the other
southern states i.e. Tamil Nadu, Karnataka, Andhra Pradesh
Therefore, considering the overall traffic potential in the hinterland and the likely
competition and infrastructure limitations, Vizhinjam port will have to consider a new
positioning strategy to maximise cargo throughput and to limit the initial capital expenditure
on berths and superstructure. To mitigate market and financial risks Vizhinjam Port should
differentiate its services by developing a modern and efficient Multipurpose Port for
handling container and general cargo traffic along with non-cargo vessels. The port
development plan should provide the flexibility of expansion in the future on the
basis of the growth in traffic and demand from various users.
20.6
Potential opportunity and core strategy
20.6.1 Potential opportunity for Vizhinjam port

The market feasibility study has shown potential for container traffic and limited break-bulk
traffic at Vizhinjam port. However, the competition is very intense and to tap the potential
traffic, Vizhinjam port will have to provide efficient infrastructure at very competitive tariff.
Vizhinjam port can also leverage its locational advantage and tap Cruise market, which
has a good potential to grow in Southern Kerala. Further, strategic partnerships with key
players like cement companies in Gujarat, tank farm companies, cashew processing units
in neighbouring districts, etc. can assist new port in attracting additional cargo traffic and to
compete with various ports in the region.
20.6.2 Core Strategy

The proposed positioning strategy of developing a Multi-purpose port at Vizhinjam port
would address some of the following key issues:
Kerala has a long coastline but is primarily served by just one major port in the state
i.e. Cochin. The proposed new port could serve the local economy and provide an
alternate gateway port to shippers in the hinterland. However, considering the inter
port competition and limited availability of traffic in the immediate hinterland; it is
suitable to have a port which provides the flexibility to handle optimum cargo mix to
maximize traffic volumes and revenue.
A new port development could act as a catalyst for economic development in the
Southern Kerala hinterland by providing infrastructure for efficient handling of import
and export cargo.
307
Tourism industry has an important role in the local economy of Southern Kerala. A
multi-purpose port with a Cruise terminal is expected to boost tourism industry in the
region, resulting in generation of additional direct and indirect employment
opportunities for the local population.
Multi-purpose port development in a phased manner, compared to a mega

container/bulk terminal can allow port planners to limit the initial capital expenditure on
port infrastructure and superstructure thereby reducing project risk. This could assist
in attracting potential investors for Vizhinjam port development.
Considering both obvious and latent traffic potential, Vizhinjam Ports core strategy could
include the following:
Phase wise development of an efficient multi-purpose port to provide container and

bulk/general cargo handling infrastructure.
Attracting container traffic and general cargo traffic being generated in the immediate
and secondary hinterland by delivering reliable efficient cargo handling services and
infrastructure at competitive price.
Strategic partnership with key players like shipping lines, terminal operators, service
providers and shippers.
Leveraging proximity to East-West shipping route for attracting transhipment container

traffic at Vizhinjams container terminal, subject to profitability.
Establishing a new cruise terminal to attract potential cruise vessel traffic.
A similar strategy has been adopted by some of the Greenfield ports in India. Mundra and
Pipavav port are two good example of such phased development.
Port Development strategy- Mundra Port
Phase1
Promoting direct port connectivity through own 64Km railway siding
Leveraging deep draft port to attract larger vessels
Developing 4 multipurpose berths in Phase 1
Mechanised break bulk handling equipment
Promoting coast based industries
Development of supporting infrastructure like tank farms, warehouses
Phase 2
Development of dedicated container terminal
International container terminal operator
308
Tie up with international shipping lines to promote container volumes
Investment in logistics infrastructure i.e. CFS, ICDs, container trains
Port based steel and power plants
Port based SEZ
Single point mooring for handling of liquid bulk
Investment in RO-RO terminal
Port Development strategy- Pipavav Port
Phase 1
Initially started with multipurpose berths
Handled coal, liquid bulk, break-bulk and containers
Joint Venture with Indian Railways for gauge conversion
Phase 2
Sold stake to A P Moller and now promoting Pipavav as deep draft container port
Dredging to have vessel acceptance draft of 14.5 m
New quay cranes and gantry cranes added to handle containers
Construction of a new jetty
Development of supporting infrastructure i.e. CFS, rails sidings, reclamation of

additional 70 hectare of land
20.6.3 Port configuration for Vizhinjam multipurpose port

In view of the limited hinterland container and bulk traffic and intense competition for
container transhipment business, it is suggested that the new port at Vizhinjam should be
developed in phases. This provides the flexibility of adding new capacity as per the market
demand and user requirements. Typically, a 30 year port development plan could include 3
phases of development. Phase 1 and 2 will primarily cater to the short and medium term
demand, while phase 3 can be designed and developed to handle long term demand.
For assessing the port configuration and development plans for each phase, one has to
estimate the requirements of berths and cargo handling equipments to cater to the
expected cargo and vessel traffic. The number and size of vessels for different types of
cargo would depend on expected parcel size and dimensions of the various types of
vessels deployed for handling various types of cargo.
309
The proposed new Multi-purpose port at Vizhinjam could adopt the following development
plan to tap the potential hinterland and container transhipment market.
Table 20.1
Port configuration and estimated cost of berths and cargo
handling equipments
No. of Units
Length
(m)
Approximate Cost Estimates

(USD Million)
2
1
1
600
250
250
33.1
13.2
13.2
Phase 1 (FY 14-FY 20)

Container Berths
General Cargo Berth
Cruise Berth
Equipments
Quay Cranes (Post Panamax)
Quay Cranes (Super -Post Panamax)
Mobile Harbour Cranes
Rubber Tyred Gantry Cranes (RTG)
Reach Stacker
Tractor Trailers
3
4
2
21
3
42
18.2
33.1
13.2
39.4
1.7
4.6
Sub Total
169.7

Container Berths
Liquid Berth
Equipments
Quay Cranes (Post Panamax)
Quay Cranes (Super -Post Panamax)
Reach Stacker
Tractor Trailers
2
1
600
250
3
4
21
3
42
47
19
26
47
19
55
2
Sub Total
214

Container Berths
Cruise Berth
Equipments
Quay Cranes (Super Post Panamax)
Reach Stacker
Tractor Trailers
Sub Total
Total
3
1
8
21
3
42
800
250
123
36
91
36
108
5
400
782.9
310
The suggested port configuration is based on the traffic forecast, which shows that
container traffic would account for almost 90% of the port traffic. The remaining traffic will
include bulk and general cargo like coal, fertilizer, timber, petroleum products and edible
oil. In addition to this port will have to develop a dedicated cruise terminal to attract
potential passenger traffic. The proposed general cargo berth design should provide the
flexibility of converting them into container berths in the future.
Proposed container handling capacity in Phase 1 is adequate to handle 1 million TEU per
annum, which is more than the expected traffic in the first 5 years. However, this is
necessary to build confidence in the market and to attract major shipping lines and
shippers. Deployment of cargo handling equipments can be staggerd for each phase. This
could be decided on the basis of expected growth in traffic and other operational and
financial considerations.
Similarly, a dedicated cruise terminal in Phase 1 is important to promote Vizhinjam as an
alternate port for cruise vessels calling Indian coast. Further, a dedicated facility offering
efficient service at competitive tariffs would encourage cruise operators who are interested
in exploring Indian market but have been reluctant due to absence of a good dedicated
cruise terminal.
In Phase 2, a liquid berth has been proposed. However, this will be required only if there
are some key users like oil companies, Tank farm companies or private
importers/exporters involved in trading and marketing of chemicals and petro products.
In addition to the estimated investment in berths and cargo handling equipments port will
also require significant investment in development of the following common user
infrastructure for efficient and safe port operations.
Construction of breakwater
Dredging
Land Reclamation
Navigational aids
Port Craft
Utilities
Land acquisition for development of rail and road linkages along with support
infrastructure
Table 20.2 provides revised costs based on L&T Ramboll (Techno commercial Feasibility
Report) and IFC estimates for developing common user infrastructure and superstructure
at Vizhinjam.
311
Table 20.2
Summary of revised cost estimates by L& T Ramboll (USD Mn)
Infrastructure*
Phase 1
Phase 2
Phase 3
Break Water
Dredging
Other
Sub Total
Superstructure**
Internal Transport Linkages
Storage Yards
Utilities
Others
Sub Total
Land Reclamation
99.5
1.8
9.0
110.3
37.4
2.5
6.3
46.2
152.1
6.1
20.5
178.8
1.4
3.6
7.4
1.6
14.0
43.1
1.0
3.8
2.6
2.2
9.6
30.3
3.3
28.9
17.0
3.6
52.7
98.7
Total
167.3
86.1
330.2
Note: * Excluding berthing structures, ** Excluding equipment

Source: L& T Ramboll-Techno Commercial Feasibility Report-Development of Vizhinjam Port, IFC
L& T Ramboll cost estimates were based on the original plan of developing a mega
container transhipment terminal at Vizhinjam. However, the proposed new port
development and positioning strategy is quite different and therefore these cost estimates
could be reviewed and adjusted as per the new port configuration.
20.7
Ownership model
There are different structures of port ownership, which are influenced by number of factors
like socio-economic structure, type of cargo to be handled, location of the port. As per the
World Bank definition, port ownership can be divided into following broad categories:
Public Service Port: These ports are managed by a Port Authority generally working
as part of the Ministry i.e. Ministry of Transport and shipping, Ministry of
communications etc. Port Authority offers entire range of services required for the port
operations. The port owns and operates every asset and employs labour for cargo
handling. Most of the major ports in India are still working on the basis of service port
model.
Tool Ports: In case of tool port ownership model, the port authority owns, develops
and maintains the port infrastructure and superstructure, including equipments. Port
authority usually employs staff to operate all port authority owned equipments.
However, cargo handling activities is generally undertaken by licensed private cargo
handling agencies by using port infrastructure and equipments.
Land Lord Port: Land Lord port is a mix of public private ownership. Under this
ownership structure, port authority acts as a regulatory body and as landlord, while
port operations are managed by private entities. Many of the big ports across the
globe have adopted this model quite successfully. Under this model, port infrastructure
is developed by the port authority and is leased to private port operators and users.
The port authority invests in dredging, construction of breakwater, quay etc. Private
312
operator invest in developing and maintaining superstructure required like, quay

cranes, fork lifts, mobile harbour crane, support infrastructure like CFS, warehouse,
office building etc. In some case private operators may invest in construction of berth
also.
Private Service Port: Under this ownership model, port land and other infrastructure
and superstructure are owned by private entity. In some cases, private port owners
could also take the responsibility of a port regulator.
Table 20.3
Comparison of port ownership models
Type
Public Service Port
Tool Port
Landlord Port
Private Service Port
Infrastructure
Superstructure
Port Labour
Other Functions
Public
Public
Public
Private
Public
Public
Private
Private
Public
Private
Private
Private
Public
Public/Private
Public/Private
Private
Source: World Bank
20.7.1 Ownership Model for Vizhinjam

Landlord port model has gained popularity and have proved to be quite successful. Some
of the leading ports like Rotterdam, Antwerp and Singapore have adopted this structure
and have benefited from public-private partnership. In India also, most of the Greenfield
ports are being developed on this concept. Even all major ports in India, which are
governed by Major Port Trust Act, are adopting this model for future development and
expansion. This assists in attracting necessary private investments in port development
and also results in higher efficiency in port operations. Considering this, Vizhinjam port can
also adopt a Landlord model for development of a proposed multi-purpose port.
Figure 20.5
Key Landlord functions
20.8
Partnership and alliance

In addition to the landlord functions, there are number of other port related infrastructure
and services which could be developed and offered by private entities. These
infrastructure and services could be provided within the port limits and also extending to
port hinterland. Figure 20.6 provides a set of services and infrastructure requirements,
which are beyond landlord functions. Increasing number of ports are now transferring key
tasks to private service providers/contractors. This has helped in achieving the following
objectives.
313
Improved infrastructure and better utilisation of capacity.
Increased operational efficiency.
Better allocation of limited public funds.
Figure 20.6
Port related activities beyond landlord function
New Greenfield ports are now being developed as Joint Venture between private
investors, port operators and government entities. A very good example of this model is
Salalah port in Oman. Salalah Port is operated by Salalah Port Services Company which is
a joint venture between A P Moller-Maersk Group and Omani Government. Currently, AP
Moller-Maersk Group holds 30% of the equity, through its subsidiary APM Terminals, while
Omani Government holds 20%. The remaining shares are with institutional investors and
pension funds.
Vizhinjam port can also adopt a similar strategy and opt for a strategic partnership with
International port operators, shipping lines, State Government, financial institutions and
multilateral funding agencies. Some of the potential partners for Vizhinjam port
development could include the following:
Industry Players
Container shipping lines looking for investment opportunities in port sector
Port operators and managers
Logistics companies
Major shippers
314
Government
Kerala State Government
Central Government
Banks and Financial Institutions
Indian Commercial Banks
Indian Financial institutions
International Development and multilateral financial institutions
20.8.1 Role of Government
Financial support
Government has an important role in facilitating and developing a Greenfield port

particularly in a scenario, where cargo volumes are low and the inter port and inter
regional competition is quite intense. In such circumstances, interest level of private
investors and developers is expected to be low. In a low volume strong competition
scenario, the expected revenues from port operations may not be sufficient for full cost
recovery and profit margins. In such a scenario, Government may require to provide
subsidies and viability gap funding to cover part of the capital expenditure and operating
costs.
Considering, the expected low traffic at Vizhinjam port particulary in the initial years of
operations, coupled with intense competition, Government may have to consider investing
in port infrastructure including construction of berths to attract private port operators.
Policies to boost economic activity in the hinterland
In a bid to stimulate economic activities in the port hinterland, government can take
proactive measures to attract investments in the existing and new industries. One of such
measures could be to develop port based SEZs. SEZs in India have shown strong growth
in exports over the last 6 years. Traditionally SEZs are created as open markets within an
economy that is dominated by distorted trade, exchange regulation and other regulatory
controls. SEZs are expected to create conducive environment to promote investment and
exports. Many developing countries are promoting SEZs with the expectation that they will
provide the engines of growth for their national and regional economies Thus the purpose
of SEZs are to achieve three-fold objectives of attracting FDI, increase in exports and
boost to the regional and national economy.
315
Figure 20.7
Exports from functioning SEZs
25,000.0
100%
USD Million
80%
70%
15,000.0
60%
10,000.0
50%
40%
5,000.0
Annual Growth
90%
20,000.0
30%
0.0
20%
FY 2004
FY 2005
FY 2006
Series2
FY 2007
FY 2008
FY 2009
Series1
Source: Ministry of Commerce
Vizhinjam has limited manufacturing base in its immediate hinterland and the local
economy is primarily dependent on service sectors. In such a scenario, a multi-product
Special Economic Zone near Vizhinjam could provide boost to the container and breakbulk traffic volumes in the immediate hinterland.
Kerala government has a policy in place to develop SEZs and this can be leveraged to
promote a multi-product SEZ at Vizhinjam. Typically a SEZ of around 500 hectares could
developed to cater to the following industries
Textile
Engineering
Electronics
Rubber & Plastics
Food Processing/Agro Based industries-Cashew processing, Fish Processing,

coir
A port based SEZ can generate additional traffic (both container and general cargo) and
this can be treated as captive business for the port. This could also lead to growth in other
sectors like bonded warehousing, Free Trade Zones, etc.
20.9
Marketing strategy
Target Market
Based on the core strategy, Vizhinjam ports target market would include:
Container traffic generated in the immediate hinterland
Shipping lines for transhipment container business
Timber merchants and saw mills in immediate and secondary hinterland
316
Fertilizer importers considering alternate ports to serve Vizhinjams immediate

hinterland
Cashew processing units in Kollam an other neighbouring districts
Cruise vessel owners and operators
Tank farm companies looking to develop petro-product distribution hub in south India
Cement plants in Gujarat looking for bagging and cruising facility in south India
Objectives
Communicating to target groups
Enlarging the general renown of the port
Highlighting the key advantages and core development plan
Highlighting the government support and commitment to the project
Promotion
International shipping conference and exhibitions
Media advertising
Port Trips
Networking with potential strategic partners
317
Tariff and Revenue Forecast
21. Tariff and Revenue forecast
This chapter discusses the tariff and revenue related issues for container and bulk
handling operations. Further, revenue forecast has also been done in this chapter.
Key findings
In India, there are primarily three components of port tariff, namely vessel related
charges (Port Dues, Berth Hire, Pilotage and Towage and Light Dues), cargo related
charges (Wharfage, Stevedoring/cargo handling charges), and miscellaneous
charges (lighthouse charges etc.).
Colombo port provides a minimum of 20% discount on its published tariff rates to the
shipping lines. Drewry has assumed any cost deviation in terms of shifting call from
Colombo to Vizhinjam based on the premise that the shipping lines are being offered
20% discount on the published tariff rate for both vessel and container handling
charges.
Network cost estimates suggest that in order to provide 10% cost benefit for a
shipping line to shift its transhipment hub from Colombo to Vizhinjam, the port has to
further provide 30% discount on the Colombo tariff. This implies that Vizhinjam has to
offer 60% of the current published tariff for port and container handling charges
currently being levied for container operations at the Colombo port.
Drewry estimates that once the traffic builds up at the Vizhinjam port, then the port
can reduce the margin of discount offered vis--vis Colombo port.
318
21.1
Indian port tariff overview

Ports in India are classified as major or minor on the basis of ownership. The Government
of India wholly owns the 12 major ports. While the Major Port Trust Act of 1963 governs
the eleven Major Ports, the 12th port (Ennore), is the only corporate port that is
administered by the provisions of Companies Act. The ownership of the minor (also called
nonmajor ports) is essentially under the jurisdiction of the respective Maritime Board of the
State Governments.
All services rendered by the Major Ports are payable in accordance with the rates
approved by Tariff Authority for Major Ports (TAMP). Minor ports are allowed to fix their
own tariff.
TAMP attempts to ensure that pricing systems of a port or terminal are both competitive
and efficient. At present, TAMP is primarily following a cost based formula (which
generates an assured rate of return) although the overall objective of the regulator is to
continue to shift towards market driven competitive pricing.
Unfortunately, TAMP currently does not have sufficient mechanisms to quantify the impact
of port inefficiencies, under utilisation of assets including port workers etc. and to estimate
its impact on the final total cost, but with continued development it is hoped its structure
and mechanism would allow computation of such variables in time.
In 1998 TAMP formed a set of broad guidelines for tariff regulation at major ports which
must be adhered to. These consist of the following:
Port pricing based presently on cost plus basis, with an assured rate of return (RoR).
Notification of uniform rates for different ports to be avoided.
Application of a differential tariff structure, using the marginal cost principle.
Tariff charges are used for improving the efficiency of port operations.
Tariff proposals are initiated by the port trusts or by private operators, bulk operators,
representative bodies of port users, directly or through the port trust.
There is consultation with other ports when determining tariffs.
Tariff revisions are applicable for every two years.
Therefore, the jurisdiction of TAMP covers port operators tariffs related to vessel, cargo
and leasing of property across port trust and private operating companies. Yet a perceived
lack of port competition in the past is one of the main factors that led to highly inefficient
port operations and increases in port tariffs which were not justified considering the
relatively low value of service delivered by some ports. However, this situation has
improved to some degree, mainly through the introduction of private operators and
investors at ports and terminals such as NSICT and Pipavav. Hence the chances of
creating public monopolies gets reduced and with private terminal operators there is a
greater degree of market forces dictating prices with each port fixing its own tariff schedule
and accounting procedures.
319
However, as at present TAMP decides the tariff ceiling for each terminal by allowing for 16
percent return on capital employed. This port tariff-setting methodology has been a
contentious issue with terminal operators saying that the present norms do not reward
those operators who bring in efficiency.
21.1.1 Upfront tariff setting for PPP projects

The TAMP issued guidelines in 2008 to set tariff for all PPP (Public Private Partnership)
projects under BOT/BOOT or any other arrangement for private sector participation under
Major Port Trusts Act, 1963.
As per the new methodology proposed, the tariffs charged at major ports would be linked
to the efficiency of services provided by the terminal operators or port authorities. The
tariffs ceilings would be fixed upfront and then competitive bids invited from companies
wanting to operate terminals.
The methodology for arriving at a tariff ceiling would be, initially each of the major port
authorities would prepare a normative project report specifying the desired key
performance indicators for port services and the costs normally associated with such
parameters. The port regulator i.e. Tariff Authority for Major Ports (TAMP), based on these
cost norms, would decide the tariff ceilings for terminals of a port.
Tariff caps will be reviewed once in five years to adjust for any extraordinary events.
Before reviewing the tariff caps, the norms relating to performance shall be set at
progressively higher levels and would take into account the technological developments.
Tariff caps will be indexed to inflation but only to an extent of 60% of the variation in
Wholesale Price Index occurring between 1 January 2008 and 1 January of the relevant
year. Such automatic adjustment of tariff caps will be made every year and the adjusted
tariff caps will come into force from 1 April of the relevant year to 31 March of the following
year.
The important point to note here is that this new tariffs/tariff mechanism are not be
applicable for operators on already operational terminals because contracts of the earlier
operators had different methodology for fixing tariffs.
The minor ports remain free from any intervention of national regulator. However, the
port/terminal has to pay the state government or maritime board a water front usage fee.
21.2
Tariff for Container handling

Generally, there are two types of charges that need to be considered, those applicable to
the vessel and those relating to the cargo i.e. container itself. However, rather than simply
giving a total estimated cost for calling at a facility and discharging/loading container cargo,
Drewry has researched some of the components that comprise cost of a port call in India.
As such, the following is an indication of some of the type of charges that are levied:
Port dues
Berth hire
Wharfage
320
Pilotage
Cargo handling charges
Storage charges
Ancillary charges and services
21.2.1 Vessel related charges (VRC) for container vessels

Table 21.1 to 21.4 provide an overview of the range of port dues, berth hire and pilotage &
towage fee applicable at competing ports for Vizhinjam in India. In order to draw some
useful comparison, Drewry has estimated the cost for port dues, pilotage & towage and
berth hire fee using the following data to reflect six different, yet typical, container vessel
sizes:
500 teu 5,000 grt
1,500 teu 16,000 grt
2,500 teu 28,000 grt
3,500 teu 42,000 grt
5,500 teu 68,500 grt
6,500 teu - 80,000 grt
These vessel size wise calculations have been based on port charges as mentioned in
ports website, which provide overall charges per vessel size to be paid for each vessel call
on these ports. In this report, tariffs have primarily been mentioned for loaded 20 feet
equivalent units (TEU). However, the tariff conversion for 40 feet containers can be safely
assumed as 1.5 times of the 20 feet tariff while tariff for loaded containers (20/40) as 1.2
times of the empty containers (20/40) tariff.
321
Table 21.1
Port dues at Vizhinjams competing ports
(US$ per entry)
Port
Port Due Fee at Indian Ports (US$/GRT)

500 teu
1,500 teu
2,500 teu
3,500 teu
5,500 teu
6,500 teu
Nonmajor Port
Mundra/Adani
778
2,489
4,356
6,533
10,656
12,444
Pipavav
540
1,728
3,024
4,284
6,576
7,680
Average Fee
659
2,108
3,690
5,409
8,616
10,062
Major Port
Kandla Port
1,150
3,680
6,440
9,660
15,755
18,400
Mumbai
1,055
3,376
5,908
8,862
14,454
16,880
15210
JNPT
951
3042
5324
7985
13024
Mormugao
562
1800
3149
4724
7705
8998
New Mangalore
715
2,288
4,004
6,006
9,796
11,440
Cochin
1,280
4,096
7,168
10,752
17,536
20,480
Tuticorin
1,007
3,222
5,639
8,459
13,796
16,112
Chennai
1,150
3,680
6,440
9,660
15,755
18,400
Visakhapatnam
1,255
4,016
7,028
10,542
17,194
20,080
Kolkata /Haldia
1,500
4,800
8,400
12,600
20,550
24,000
Average Fee
1,063
3,400
5,950
8,925
14,556
17,000
Source: Various Port websites
Table 21.2
Berth hire charges at Vizhinjams competing ports
(US$ per entry for 24 hrs berth stay)
Port
Berth Hire Fee at Indian Ports (US$/GRT/8 Hrs)

500 teu
1,500 teu
2,500 teu
3,500 teu
5,500 teu
6,500 teu
2,240
3,653
4,267
Nonmajor Port
Mundra/Adani
267
853
1,493
Pipavav
252
806
1,411
1,999
3,069
3,584
Average Fee
259
830
1,452
2,120
3,361
3,925
Major Port
Kandla Port
124
397
694
1,042
1,699
1,984
Mumbai
300
960
1,680
2,520
4,110
4,800
JNPT
148
474
829
1,243
2,028
2,368
Mormugao
157
1,346
2,355
3,532
5,761
6,728
1,344
New Mangalore
Cochin
84
269
470
706
1,151
259
445
780
1,169
2,170
2,534
76
397
941
1,680
2,740
3,200
Tuticorin
Chennai
116
370
647
971
1,584
1,850
Visakhapatnam
184
275
482
1,210
1,973
2,304
Kolkata /Haldia
100
320
560
840
1,370
1,600
Average Fee
155
525
944
1,491
2,458
2,871
322
Table 21.3
Pilotage & Towage fee at Vizhinjams competing ports
(US$ per entry)
Port
Pilotage Fee at Indian Ports (US$/GRT)

500 teu
1,500 teu
2,500 teu
3,500 teu
5,500 teu
6,500 teu
Nonmajor Port
Mundra/Adani
2,022
6,471
11,324
16,987
27,704
32,356
Pipavav
2,270
7,264
12,712
19,068
31,099
36,320
Average Fee
2,146
6,868
12,018
18,027
29,402
34,338
Major Port
Kandla Port
1,940
6,208
10,864
35,386
47,181
52,300
Mumbai
1,733
5,546
9,705
22,040
29,386
32,574
JNPT
1,191
3,810
5,342
8,014
11,433
13,352
New Mangalore
1,600
5,120
8,960
20,352
27,136
30,080
Cochin
2,782
8,902
15,579
35,386
47,181
52,300
Tuticorin
1,364
4,515
916
13,574
22,139
25,856
Chennai
1,345
5,712
14,196
21,294
40,210
46,960
Visakhapatnam
2,786
8,914
15,599
42,921
56,078
61,788
Kolkata /Haldia
3,218
10,296
18,018
24,660
32,875
36,440
Average Fee
1,995
6,558
11,020
24,848
34,847
39,072
Pan India Average
2,023
6,614
11,201
23,607
33,857
38,211
Table 21.4
Total Port disbursement fee at Vizhinjams competing ports
(US$ per entry for 24 hours of berth stay)
Port
Port Disbursement Fee at Indian Ports (US$/GRT)

500 teu
1,500 teu
2,500 teu
3,500 teu
5,500 teu
6,500 teu
25,760
42,013
49,067
Nonmajor Port
Mundra/Adani
3,067
9,813
17,173
Pipavav
3,062
9,798
17,147
25,351
40,744
47,584
Average Fee
3,064
9,806
17,160
25,556
41,379
48,325
Major Port
Kandla Port
3,214
10,285
17,998
46,088
64,635
72,684
Mumbai
3,088
9,882
17,293
33,422
47,950
54,254
JNPT
2,289
7,325
11,495
17,242
26,484
30,930
New Mangalore
2,399
7,677
13,434
27,064
38,082
42,864
Cochin
4,321
13,444
23,527
47,307
66,887
75,314
Tuticorin
2,447
8,134
7,496
23,713
38,675
45,168
Chennai
2,611
9,762
21,283
31,925
57,548
67,210
Visakhapatnam
4,225
13,205
23,108
54,673
75,245
84,172
Kolkata /Haldia
4,818
15,416
26,978
38,100
54,795
62,040
Average Fee
3,268
10,570
18,068
35,504
52,256
59,404
Pan India Average
3,231
10,431
17,903
33,695
50,278
57,390
323
Table 21.4 shows the total port disbursement fee for various vessel types. The port
disbursement fee is sum of port dues; pilotage & towage and berth hire charges paid by a
vessel owner for a single port call at the mentioned ports.
Charges have been calculated basis vessel sizes varying from 500 to 6,500 TEU, it is
expected that this would be initial portfolio of container vessels likely to call Vizhinjam in
the first five years.
Port disbursement fee has been calculated as the sum of port due, berth hire and pilotage
& towage fee paid by a vessel for any port call in selected ports in India. As per Table 21.4
above, overall tariff at JNPT, which is the premier container handling port in the country, is
lowest amongst other container handling facilities in the country.
21.2.2 Ports - container related tariffs

Tariff levels and operating costs are an essential component in the competitiveness of a
port. It is important to offer a competitive tariff that may attract potential customers. Since,
competitive price provides the impetus to overcome inertia in terms of switching ports.
Although, higher tariffs are a hindrance to the growth of traffic but offering much lower
tariffs do not necessarily attract a significantly greater volume growth.
The best gauge of the level of charges that the port should levy is available by looking at
what other major container handling ports in the region are currently charging. At the same
time, it is also essential that the new facility should be able to provide competitive rates for
all ancillary and storage charges that are common at any modern container handling
facility.
Thus, the overall container handling charges at Indian ports is in range of Rs. 1,900 to Rs.
4,000. Almost all the ports in the vicinity of planned development are charging almost
similar rates of container handling. However, as these charges are just a small percentage
of overall costs to the shipper. Therefore, the decision to use a particular port depends
upon the other logistic cost i.e. inland logistic cost and shipping freight available from a
particular port.
324
Table 21.5
Comparative container handling charges
(Rs. /Teu)
Service
Major Ports
JNPT
NSICT
GTI
Mumbai
Vizag.
Ship-yard loaded
2,210
2,788
2,761
2470
Ship-yard empty
1,785
2,252
2,230
1970
Ship- rail yard/ICDloaded
3,315
4,182
4,142
Ship- rail yard/ICDempty
3,315
4,050
3,611
Yard to truck loaded
340
428.94
Yard to truck empty
340
Ship-road loaded
Minor Ports
Kolkata
Chennai
Cochin
3,200
1,827
2,240
1,437
3,770
1,250
3,270
1,150
424.8
2,470
428.94
424.8
2,550
3,217
Ship-rail loaded
3,315
4,182
Ship-road empty
2,125
Ship-rail empty
3,315
Tuticorin
Avg Fee
Mundra
Pipavav Avg Fee
3,656
2,702
3,910
3,000
3,455
2,651
2,081
3,680
2,500
3,090
1,319
3,977
3,136
4,370
3,640
4,005
653
2,936
2,712
4,140
3,190
3,665
1,351
684
814
1,970
351
285
543
3,186
2,470
3,200
5,927
3,179
4,340
3,374
3,910
3,000
3,455
4,142
3,770
4,450
5,940
3,147
4,661
4,201
4,370
3,000
3,090
2,681
2,655
1,970
2,240
752
1,789
2,865
2,134
3,680
2,600
4,005
4,050
3,611
3,270
3,390
765
1,773
2,824
2,875
4,140
2,600
3,665
1,774
1,774
3,407
2,953
3,200
2,800
4,050
2,700
3,625
2,750
Normal-gateway boxes
Total box cost

2,300
3,540
1 - 3,000 teu - empty
2,210
2,380
2,040
2,210
1,870
2,040
1,700
3,068
3,304
2,832
3,068
2,596
2,832
2,360
3,001 - 6,000 teu loaded

3,001 - 6,000 teu empty
6,001 - 9,000 teu loaded
6,001 - 9,000 teu empty
Thereafter - loaded
Thereafter empty
3,115
2,700
2,940
2,540
3,780
3,780
662
662
across ports
2,550
Not Calculated due
1 - 3,000 teu - loaded
charges in various slabs
Transshipment charges (consolidated ship to CY and CY to ship charges)
* Pipavav consolidated charges for ship-yard-rail/road

325
As per Table 21.5, it is evident that container handling charges at nonmajor port are higher
compared to major ports. This is due to the reason that minor ports do not fall under the
purview of TAMP, hence their charges are not regulated. Unlike major ports in India which
are governed by TAMP, as a general case of port pricing strategy, port dues are aligned
with tariff published by competing ports. In fact, published tariff rates are an effective and
flexible marketing tool. These rates are often a starting point for negotiation of a time/
volume agreement, a first or last port of call status agreement, or an increase in throughput
from a carrier or shipper. For e.g., in 2005, Chennai Port Trust and Hyundai Motor India
Ltd agreed on the terms and conditions for concessional wharfage and marine charges for
export of automobiles through the port for a period of 10 years.
Also evident from Table 21.5, the demand seems to be relatively price inelastic (Chennai,
JNPT, NSICT, & GTI having a high THC are able to attract considerable traffic at their
terminals as they have over a million container throughputs.
With the exception of Pipavav and Mundra all other terminals are on the major ports in
India hence their tariff is regulated by TAMP, which constraints them to price beyond the
stipulated ceiling. The vessel and cargo related rates have been regulated by TAMP,
hence even though there is a tight supply/demand scenario for container handling in India,
JNPT has been unable to price accordingly. A request by Chennai Container Terminal
operated by DP World for an increase of 14.0% in tariff over the three-year period 2007 to
2009 and to consider an interim relief by giving a hike of 7.5% with an option of coming for
a review prior to the end of tariff cycle in case there is drop in volumes was rejected by
TAMP. However, the regulator approved of a 10% increase in tariff applicable from August,
2008 which was to be valid till 2009 end. Similarly, Tuticorin had to curtail its container
handling capacity in 2008 as its request to increase port tariffs were rejected by TAMP,
instead the regulatory body decreased its existing tariff by nearly 34%.
21.2.3 Royalty terms

With participation from private players another factor comes into picture which plays an
important role in overall tariff level. This is revenue sharing among the port authority and
the private terminal operator. Table 21.6 shows the royalty terms agreed between landlord
ports and container terminal operators for some of the concession agreements awarded to
private terminal operators. The figures are based on information collected by Drewry from
secondary sources.
326
Table 21.6
Royalty terms for major container terminals
Port
Revenue Share
Terminal Operator
Remarks
Start up year
NSICT
Tuticorin
INR 47*
-
DP World
PSA-SICAL
Royalty (per teu )

Royalty (per teu)
1999
1999
Mundra
10.000%
DP World
2002
Chennai (CCTL)
37.128%
DP World
VCTPL
INR 50*
JM Baxi-DP World
Revenue Share plus

Upfront Payment
Revenue Share (on
Gross
revenue)+Payment of
lease rentals to CHPT
Royalty (per teu)
Vallarpadam (ICTT)
33.330%
DP World
Revenue Share plus

upfront payment
2005
JNP (GTI )
Kandla
Mumbai Offshore
(ICTPL)
35.503%
48.997%
35.000%
Maersk India/CONCOR
ABG
Gammon/Dragados
Revenue Share
Revenue Share
Revenue Share (on
Gross revenue)
Chennai (CITPL)
45.801%
PSA-SICAL
Revenue Share
2006
2007
2008 (BPS) 2012
(Offshore
Terminal)
2009
Tuticorin-Berth 8
Bidding in process
Upfront tariff
2013
JNPT
Bidding in process
Upfront tariff
NMPT
Chennai Mega Terminal
Bidding in process
In process
Upfront tariff
Upfront tariff
2013- 15
(expected)
2013 (expected)
2016 (expected)
2002
2003
It can be seen that there is a wide variation in the revenue share that have been offered by
the winner operators to their respective landlord ports. Quite naturally, container terminals
that have promised a high revenue share would be less profitable than the others which
might have some impact upon competitiveness. Another point to note is that the royalty
payments on gross revenue in some cases are based on the higher of actual or
guaranteed traffic and TAMP notified tariff. This, in one way, is disadvantageous to the
terminal operator, as even if they are charging a lower tariff rates than the TAMP ceiling
rates, they would still have to give royalty on the TAMP rates.
21.2.4 Terminal storage charges

All ports generally offer a period of free storage (of a varying length of time) before
applying a daily rate (or part thereof) to cover storage of the container. The movement (or
indeed lack of movement) of containers is a major problem at ports and terminals in many
areas throughout the globe and can be a major cause of congestion (although inefficient
handling operations should not be forgotten). Moreover, if a terminal is already busy then
the prospect of a number of boxes lingering at the facilities can cause major operational
problems for the operator and this fact is often reflected in the rent charges applied.
Therefore, storage rent is not only a method of generating revenue but also a deterrent for
laggard who intends to use the precious container yard space as a warehouse. Indirectly it
also provides impetus to the movement of container by rewarding the efficient shippers.
327
Table 21.7
Free periods and storage rates for export teu at selected ports
(US$/day)
Period of
Occupation
Kandla
Mumbai
Jawaharlal
Nehru Port
First 7 days
Free
Free
0.143
Free
Free
8 - 15 days
0.5
0.143
2.5
2.5
16 - 30 days
0.143
4.9
31 - 45 days
1.5
+ 50% rise
10
9.9
46 - 60 days
+ 75% rise
10
9.9
61 - 90 days
+ 100% rise
10
9.9
After 91 days
+ 200% rise
10
9.9
Mormugao
New
Cochin
Mangalore^
Tuticorin
0-3 Days
Free
0.214*
Free
Free
4-5 Days
2.7625
0.214
Free
6-7 Days
2.7625
0.214
0.75
8-9 Days
2.7625
0.214
0.75
10-15 Days
2.7625
0.214
0.75
16-20 Days
5.525
0.214
21-30 Days
5.525
0.214
5.8
After 30 days
11.05
0.214
12
5.8
Chennai
Vizag
1. Figures are based on per day rate or part thereof for laden export box.
2. * - 1 day free period Ports providing
Source: Individual port websites, TAMP/Compiled by Drewry
Table 21.7 compare the free periods and storage rents applied at some ports in India.
Almost all the ports on the western coast of India provides some time of free storage
specifically for the purpose of customer relations. After the initial period, storage charges in
all these ports rises significantly with time. The CCTL facility at Chennai has the highest
rate for storage of containers in their yard which reflects their strong opposition to usage of
container yard as storage space practice. It is interesting to note that a container that
remains at a port after free period will generate a high storage cost irrespective of its
contents. Nevertheless, with stress on landside space, terminal operators have little choice
other than to charge higher storage rents in order to ensure smooth facilitation of trade.
At present because of excessive demand and competition CCTL evacuates containers
from its terminal by rail to Concors facility; if the container remains in the yard for more
than 3 days, thereby, enhancing CCTLs relationship with Concor to provide better service
at their terminal. A container which goes to the Concors yard becomes revenue
generating equipment for Concor as well. New Mangalore and Mormugao have no free
period for container storage although these ports do not handle significant container
volumes.
328
21.2.5 Terminal pricing & container volume demand

Terminal tariff is not a significant factor in various decision variables which determine the
choice of a container terminal by a shipper/consignee. There are other major factors like
rail & road connectivity, range of liner services, service levels at the terminal and
availability of soft infrastructure around the terminal. This is primarily due to the reason that
terminal handling charge (THC) form a minuscule portion of the entire supply chain cost.
This point can be explained in greater detail with help of analysis of supply chain cost for
an apparel shipment from New Delhi, India to a port on the US East Coast, say, Long
Beach. The analysis in Table 21.8 provides in detail the break-up of cost for shipment of a
container load of apparel (in a forty feet box) from New Delhi to Long Beach. The figures
are based on an analysis conducted by Drewry which shows that the terminal handling
charges ( tariff set by a terminal operator) is only 0.07% of the overall cost of a product
shipped from India on CIF (Cost, Insurance & Freight) basis.
The change is value of the shipment wouldnt drastically change the share of terminal
handling charges. It might increase it to one percent of the CIF value, however it still
remains a very small value in overall supply chain cost which would affect the choice of
terminal for a shipper/consignee.
Table 21.8
Cost analysis for export shipment from India to US East Coast
Value Chain Stages
Raw Material Cost

Manufacturer's inventory cost
US$/FFE of Apparel
% of CIF Cost
$150,000
49.21%
$3,750
1.23%
Labour Cost, profit, overheads (excluding FOB cost)
$145,850
47.85%
Ex Factory Product Value
$299,600
98.28%
$125
0.04%
$65
0.02%
Inland trucking charges to ICD

ICD handling charges
Inland transportation cost from ICD to Port by train
Custom Clearance Charges
Terminal Handling Charge (THC)
FOB Export Product Value

Cargo Insurance Cost
Ocean Freight
CIF Export Product Value
$820
0.27%
$25
0.01%
$200
0.07%
$300,835
98.69%
$602
0.20%
$3,400
1.12%
$304,837
100.00%
Note: ICD Inland container depot at Delhi

Container volume throughput at the GTI terminal (Nhava Sheva Port / JNPT) and Mundra
International Container Terminal (Mundra Port) corroborate this fact. Its primarily the
efficiency, connectivity, range of services, location and infrastructure availability at these
terminals which have driven container volume growth. GTI had the highest terminal
handling charges amongst three existing terminals at the Nhava Sheva port; however the
terminal has managed to attract more than a million teu traffic within first three years of
329
commencing its operation at the port and has reached its container traffic handling
capacity ceiling. Similarly, MICT which has the second highest THC amongst the container
terminal operators in India is one of the fastest growing container terminals in the country.
Thus, the container volume demand at a container terminal is relatively price inelastic and
is determined by other major factors for port and terminal attractiveness. Drewry estimates
that in such scenario, Vizhinjam container terminal too can have the same THC as
charged by the market. However, overall port dues and turnaround time would be a critical
factor.
21.3
Revenue forecast for Vizhinjam from Container operations

This section provides estimate revenue forecast from the container traffic operations at the
proposed Vizhinjam port. The revenue forecast has been estimated for traffic generated in
the base case scenario from FY14 to FY44.
A detailed analysis of the estimated network cost for shipping lines has been discussed in
Section 6. Salient points discussed in that section are reiterated as below:
As per market reports, Colombo port provides around 20% discount on its published
tariff rates to the shipping lines. Drewry has assumed any cost deviation in terms of
shifting transhipment hub from Colombo to Vizhinjam based on the premise that the
shipping lines are being offered 20% discount on the published tariff rate for both
vessel and container handling charges.
Network cost estimates suggest that in order to provide 10% cost benefit for a
shipping line to shift its transhipment hub from Colombo to Vizhinjam, the port has to
further provide 30% discount on the Colombos tariff. This implies that Vizhinjam has
to offer atleast 60% of the current published tariff for port and container handling
charges currently being levied at the Colombo port.
As per primary survey and Drewry estimates, 10% cost benefit is the minimum criteria
for Vizhinjam to attract mainline vessel calls at its facilities.
In addition to the take-away from the network cost analysis, following are the assumptions
for vessel & container handling forecasts for the Vizhinjam port.
Vessel Related Tariff
The currently published vessel related tariff charged at Colombo port is

USD 0.147 / GT (light dues, entering dues, pilotage (in & out), anchorage)
+ 0.0022 / GT / hr (berth hire)
Drewry estimates that as discussed in the network cost analysis above, the Vizhinjam
port has to offer 40% discount on the card rate published by the Colombo port.
It is assumed that the escalation factor for the tariff rate would be 60% of the
Wholesale Price Index increase for each year.
An estimated 5% y-o-y increase in WPI has been estimated over the forecast period.
This implies that the WPI is expected to increase 5% every year. Therefore, the net
escalation factor for the tariff would be equal to the product of 60% and 5%, i.e. 3%
increase in tariff every year.
330
It has been estimated that the VRCs at the Colombo port would increase by same
escalation factor.
Drewry estimates that once the traffic builds up at the Vizhinjam port, then the port can
reduce the margin of discount offered vis--vis Colombo port. The estimated discount
offered by Vizhinjam is assumed to decrease in the following term
Period
Proposed Vizhinjams Tariff as Percentage of

Published Colombos Tariff
2014-2017
60%
2018-2025
70 78.8%
2026-2044
80%
Container handling charges
THC charged by Cochin port has been taken as the benchmark for container handling
charges for gateway tariff. This is due to the reason that Vizhinjam is competing with
Indian ports for gateway traffic. The proposed tariff by TAMP for the Vallarpadam
terminal has been taken a benchmark tariff for the Vizhinjam port.
THC charged by Colombo port has been taken as the benchmark rate for container
handling charges for transhipment tariff. This is due to the reason that Colombo is the
prime competitor for transhipment traffic for Vizhinjam. Colombo port charges equal
tariff for transhipment of laden and empty containers. Also, data received by Drewry
from Sri Lanka Port Authority, South Asia Gateway Terminal and few shipping lines
suggest that the transhipment tariff ranges from USD 37/55 to USD 44/66 per move
for 20 & 40 ft containers respectively for transhipment traffic. Drewry has taken an
average rate of USD 41/61.5 respectively as one move transhipment tariff for 20 & 40
ft container boxes respectively.
It has been assumed that a large share of the traffic at the Vizhinjam port would be
generated from Indian ports. As per TAMP guidelines, the coastal vessel get a
discount of approximately 40% on the both VRCs and CRCs, however that guideline
is binding only on major ports and doesnt cover minor ports. If Vizhinjam port offers
the discount to coastal vessels, then the overall cost benefit for a shipping line would
further increase.
It is estimated that 90% of the revenue generated by a terminal is contributed by

container handling charges. The other 10% revenue is generated by miscellaneous
services like demurrage, storage, etc.
Drewry estimates that as discussed in the network cost analysis above, the Vizhinjam
port has to offer 40% discount on the card rate published by the Colombo port for
transhipment tariff. However, no discount has been assumed for THC charged for
gateway tariff.
It is assumed that the escalation factor for the tariff rate would be 60% of the
Wholesale Price Index increase for each year.
331
An estimated 5% y-o-y increase in WPI has been estimated over the forecast period.
This implies that the WPI is expected to increase 5% every year. Therefore, the net
escalation factor for the tariff would be equal to the product of 60% and 5%, i.e. 3%
increase in tariff every year.
It has been estimated that the CRCs at the Colombo port would increase by same
factor.
Drewry estimates that once the traffic builds up at the Vizhinjam port, then the port can
reduce the margin of discount offered vis--vis Colombo port for transhipment cargo.
The estimate discount offered by Vizhinjam is assumed to decrease in the following
term
Period
Discounted Price (vis--vis Colombo tariff)
2014-2017
60%
2018-2025
70 78.8%
2026-2044
80%
332
Table 21.9 provides the container tariff forecast for both container handling and vessel
related charges at the proposed Vizhinjam port.
Table 21.9
Tariff forecast for vessel related charges
(USD)
Year
FY10
Fixed Port Charges (per GRT)

Discounted
Colombo
Vizhinjam Price Margin
(%)
FY 14
0.147
0.1654
0.0882
0.0993
FY 15
0.1704
0.1022
FY 16
0.1755
FY 17
FY 18
60.0%
Dockage (Berth hire charges ) / GRT/hr

Discounted
Colombo
Vizhinjam Price Margin
(%)
60.0%
0.0022
0.0025
0.0013
60.0%
0.0015
60.0%
60.0%
0.0026
0.0015
60.0%
0.1053
60.0%
0.0026
0.0016
60.0%
0.1808
0.1085
60.0%
0.0027
0.0016
60.0%
0.1862
0.1304
70.0%
0.0028
0.0020
70.0%
FY 19
0.1918
0.1367
71.3%
0.0029
0.0020
71.3%
FY 20
0.1976
0.1432
72.5%
0.0030
0.0021
72.5%
FY 21
0.2035
0.1501
73.8%
0.0030
0.0022
73.8%
FY 22
0.2096
0.1572
75.0%
0.0031
0.0024
75.0%
FY 23
0.2159
0.1646
76.3%
0.0032
0.0025
76.3%
FY 24
0.2224
0.1723
77.5%
0.0033
0.0026
77.5%
FY 25
0.2290
0.1804
78.8%
0.0034
0.0027
78.8%
FY 26
0.2359
0.1887
80.0%
0.0035
0.0028
80.0%
FY 27
0.2430
0.1944
80.0%
0.0036
0.0029
80.0%
FY 28
0.2503
0.2002
80.0%
0.0037
0.0030
80.0%
FY 29
0.2578
0.2062
80.0%
0.0039
0.0031
80.0%
FY 30
0.2655
0.2124
80.0%
0.0040
0.0032
80.0%
FY 31
0.2735
0.2188
80.0%
0.0041
0.0033
80.0%
FY 32
0.2817
0.2253
80.0%
0.0042
0.0034
80.0%
FY 33
0.2901
0.2321
80.0%
0.0043
0.0035
80.0%
FY 34
0.2988
0.2391
80.0%
0.0045
0.0036
80.0%
FY 35
0.3078
0.2462
80.0%
0.0046
0.0037
80.0%
FY 36
0.3170
0.2536
80.0%
0.0047
0.0038
80.0%
FY 37
0.3265
0.2612
80.0%
0.0049
0.0039
80.0%
FY 38
0.3363
0.2691
80.0%
0.0050
0.0040
80.0%
FY 39
0.3464
0.2771
80.0%
0.0052
0.0041
80.0%
FY 40
0.3568
0.2854
80.0%
0.0053
0.0043
80.0%
FY 41
0.3675
0.2940
80.0%
0.0055
0.0044
80.0%
FY 42
0.3785
0.3028
80.0%
0.0057
0.0045
80.0%
FY 43
FY 44
0.3899
0.3119
80.0%
0.0058
0.0047
80.0%
0.4016
0.3213
80.0%
0.0060
0.0048
80.0%
333
Table 21.10
Tariff forecast from container handling charges
(USD)
Transshipment
Rate
Year / Equ. size
Colombo Port
Cochin Port Gateway Tariff
Benchmark
Loaded
20
Tariff
Empty
40
20
40
20
CHC offered at
discount by
Vizhinjam for
Transshipment
40
20
40
FY10
78.50
117.75
59.00
88.50
82.00
123.00
49.2
73.8
FY14
88.35
132.53
66.41
99.61
92.29
138.44
55.4
83.1
FY15
91.00
136.50
68.40
102.60
95.06
142.59
57.0
85.6
FY16
93.73
140.60
70.45
105.67
97.91
146.87
58.7
88.1
FY17
96.55
144.82
72.56
108.84
100.85
151.27
60.5
90.8
FY18
99.44
149.16
74.74
112.11
103.88
155.81
72.7
109.1
FY19
102.42
153.64
76.98
115.47
106.99
160.49
76.2
114.3
FY20
105.50
158.25
79.29
118.94
110.20
165.30
79.9
119.8
FY21
108.66
162.99
81.67
122.50
113.51
170.26
83.7
125.6
FY22
111.92
167.88
84.12
126.18
116.91
175.37
87.7
131.5
FY23
115.28
172.92
86.64
129.97
120.42
180.63
91.8
137.7
FY24
118.74
178.11
89.24
133.86
124.03
186.05
96.1
144.2
FY25
122.30
183.45
91.92
137.88
127.75
191.63
100.6
150.9
FY26
125.97
188.95
94.68
142.02
131.59
197.38
105.3
157.9
FY27
129.75
194.62
97.52
146.28
135.53
203.30
108.4
162.6
FY28
133.64
200.46
100.44
150.67
139.60
209.40
111.7
167.5
FY29
137.65
206.48
103.46
155.19
143.79
215.68
115.0
172.5
FY30
141.78
212.67
106.56
159.84
148.10
222.15
118.5
177.7
FY31
146.03
219.05
109.76
164.64
152.54
228.82
122.0
183.1
FY32
150.41
225.62
113.05
169.58
157.12
235.68
125.7
188.5
FY33
154.93
232.39
116.44
174.66
161.83
242.75
129.5
194.2
FY34
159.57
239.36
119.93
179.90
166.69
250.03
133.4
200.0
FY35
164.36
246.54
123.53
185.30
171.69
257.53
137.4
206.0
FY36
169.29
253.94
127.24
190.86
176.84
265.26
141.5
212.2
FY37
174.37
261.56
131.06
196.58
182.15
273.22
145.7
218.6
FY38
179.60
269.40
134.99
202.48
187.61
281.42
150.1
225.1
FY39
184.99
277.49
139.04
208.56
193.24
289.86
154.6
231.9
FY40
190.54
285.81
143.21
214.81
199.04
298.55
159.2
238.8
FY41
196.26
294.38
147.50
221.26
205.01
307.51
164.0
246.0
FY42
202.14
303.22
151.93
227.89
211.16
316.74
168.9
253.4
FY43
208.21
312.31
156.49
234.73
217.49
326.24
174.0
261.0
FY44
214.45
321.68
161.18
241.77
224.02
336.02
179.2
268.8
Source: Drewry Research Maritime Services Pvt. Ltd.
334
Table 21.11
Revenue forecast for Vizhinjam
(USD)
Size
FY 14
FY 15
FY 16
FY 17
FY 18
FY 19
FY 20
FY 21
FY 22
FY 23
FY 24
FY 25
FY 26
FY 27
FY 28
FY 29
FY 30
FY 31
FY 32
FY 33
FY 34
FY 35
FY 36
FY 37
FY 38
FY 39
FY 40
FY 41
FY 42
FY 43
FY 44
Vessel Related
Container Handling Related
Total Revenue
PV @ 10%
5,964,847
524,866
6,036,466
6,561,331
582,633
9,528,691
10,111,323
8,356,466
1,130,010
13,649,696
14,779,707
11,104,212
1,163,911
18,566,531
19,730,442
13,476,157
1,485,536
26,239,055
27,724,591
17,214,790
2,399,649
33,257,037
35,656,687
20,127,270
2,610,490
39,857,195
42,467,685
21,792,637
2,735,163
45,413,533
48,148,696
22,461,722
3,591,276
51,230,906
54,822,182
23,249,957
3,862,761
57,968,644
61,831,405
23,838,683
4,043,868
64,418,154
68,462,022
23,995,521
5,343,882
71,500,477
76,844,359
24,484,981
5,717,380
80,768,768
86,486,148
25,051,957
5,888,902
90,373,488
96,262,390
25,348,896
6,065,569
101,035,629
107,101,198
25,639,175
7,328,259
112,867,504
120,195,763
26,158,100
7,548,107
125,903,747
133,451,854
26,402,738
7,920,402
134,802,477
142,722,879
25,669,964
8,158,014
146,047,897
154,205,912
25,213,899
9,475,161
158,185,740
167,660,901
24,921,725
9,918,792
171,284,217
181,203,009
24,486,066
10,216,356
185,292,320
195,508,676
24,017,454
12,085,870
198,425,473
210,511,343
23,509,519
12,543,672
212,442,945
224,986,617
22,841,901
12,919,982
227,404,536
240,324,518
22,180,991
13,593,368
243,363,587
256,956,955
21,560,090
14,001,169
260,390,075
274,391,244
20,929,929
15,779,696
278,544,339
294,324,035
20,409,414
16,253,087
295,848,511
312,101,597
19,674,700
18,181,903
314,183,746
332,365,649
19,047,395
18,727,360
333,608,649
352,336,009
18,356,243
Present Value
657,487,397
Source: Drewry Research Maritime Services Pvt. Ltd.
21.4
Components of tariff: bulk cargo

In India, there are primarily three components of port tariff, for bulk vessels namely vessel
related charges (Port Dues, Berth Hire, Pilotage and Towage and Light Dues), cargo
related charges (Wharfage, Stevedoring/cargo handling charges), and miscellaneous
charges (lighthouse charges etc.)
21.4.1 Vessel related charges (VRC)

Vessel related charges like port dues, berth hire and pilotage & towage fee charged by
ports, are similar for break bulk and general cargo vessels. These charges, which fall
under TAMP guideline for all major ports continue to be denominated in US dollars and
335
recovered in Indian rupees. In addition, port also collects light dues from ships engaged in
international trade arriving at or departing from any Indian Port. Currently it is INR 8/- per
NRT. Light dues are charged by the Central Government for providing and maintaining the
lighthouses. Therefore, the light dues do not form part of revenue stream for the individual
ports in India.
The scope of this section is the vessel related charges for foreign going vessels and
coastal vessels.
As per TAMP guidelines, the unit for levying vessel related charges is Gross Registered
Tonnage (GRT) of the concerned vessel. In case of port dues and berth hire, there is a
single slab of GRT. Pilotage and shifting charges is described in three slabs as mentioned
below:
Up to 30,000 GRT
30,001 to 60,000 GRT
Above 60,000 GRT
A reduction of 20% on the unit rate of the first slab is effected for the second slab and a
reduction of 30% on the unit rate of the first slab is effected for the third slab on the
incremental GRT.
Drewry has identified the following port as providing competitive facilities for the hinterland
cargo being targeted by the Vizhinjam port: Cochin, Tuticorin, New Mangalore and other
minor ports of Kerala. With the exception of minor port of Kerala, these ports fall under
TAMP purview and follow its tariff regulation guidelines. As Vizhinjam Port is being
developed by the state government, it will not fall under the purview of TAMP guideline.
The published tariff of the major and minor ports has been given in Annexure 1 to 3.
A comparative analysis of port dues, Pilotage & towage and berth hire charges of
estimated tariff at Vizhinjam and ports mentioned is required. The analysis constitutes
calculation of vessel related charges to be paid by ships of gross registered tonnage of
10,000, 30,000, 50,000 and 70,000. The three major VRCs considered in our analysis are
port dues, Pilotage & towage and berth hire. Berth hire charges have been calculated on
the assumption of 24 hours berth stay by all vessels.
Table 21.12 to 21.15 provides comparative analysis of port dues, Pilotage & towage and
berth hire charged for each vessel size at various ports.
Table 21.12
Light dues Indian ports
USD
Indian Ports
INR per GT
NRT
5,000
12,600
28,500
33,700
GT
10,000
30,000
50,000
70,000
889
2,240
5,067
5,991
Source: Directorate General of Lighthouses and Lightships
336
Table 21.13
Port dues at competing ports of Vizhinjam
Foreign Vessel (USD)
Coastal Vessel (USD)
Port /Vessel GRT

10,000
30,000
50,000
70,000
10,000
30,000
50,000
70,000
Cochin Port
2,050
6,150
10,250
14,350
1,220
3,660
6,100
8,540
Tuticorin Port
2,014
6,042
10,070
14,098
1,167
3,500
5,833
8,167
New Mangalore Port
1,430
4,290
7,150
10,010
516
1,547
2,578
3,609
619
1,856
3,093
4,331
880
2,641
4,401
6,162
Azhikkal
Average competing
1831
5,494
9,157
12,819
Indian ports
Source: Various Port websites, Market Survey
Table 21.14
Berth hire charges at competing ports of Vizhinjam
(INR per entry for 24 hours of berth stay)
Coastal Vessel (USD)
10,000
30,000
50,000
70,000
10,000
30,000
50,000
70,000
1,555
2,506
4,176
6,653
923
1,488
2,480
3,957
Tuticorin Port
456
3,312
6,000
8,400
267
1,920
3,467
4,853
New Mangalore Port
504
1,512
2,520
3,528
299
896
1,493
2,091
288
864
1,440
2,016
444
1,292
2,220
3,229
Cochin Port
Azhikkal
Average competing
838
2,443
4,232
6,194
Indian ports
Table 21.15
Pilotage & Towage fee at competing ports of Vizhinjam
Coastal vessel (USD)
10,000
30,000
50,000
70,000
10,000
30,000
50,000
70,000
Cochin Port
5,738
17,214
26,394
35,000
3,411
10,233
15,694
20,814
Tuticorin Port
2,728
9,387
16,160
22,624
1,580
5,440
9,367
13,113
New Mangalore Port
3,200
9,600
14,720
19,520
1,900
5,700
8,742
11,595
3,333
10,000
16,667
23,333
2,556
7,843
12,618
17,214
Azhikkal
Average competing
3,889
12,067
19,091
25,715
Indian ports
337
Table 21.16
Total Port disbursement fee at competing ports of Vizhinjam
(on Vessels account)
Per entry for 24 hours of berth stay
10,000
Cochin Port
30,000
50,000
Coastal vessel (USD)

70,000
10,000
30,000
50,000
70,000
10,339
28,981
45,496
63,138
6,549
18,492
28,950
40,446
Tuticorin Port
6,194
21,852
36,906
52,257
4,009
13,971
23,342
33,268
New Mangalore Port
6,130
18,513
29,066
40,193
3710
11,254
17,489
24,430
5236
15,831
25,876
36,815
7,554
23,115
37,156
51,862
4876
14,887
23,914
33,740
Azhikkal
Average all ports
Table 21.16 shows the total port disbursement fee for various vessel types. The port
disbursement fee is sum of port dues; pilotage & towage and berth hire charges paid by a
vessel owner for a single port call at the mentioned ports.
Total port disbursement presented in the Table 21.16 does not include 12.36% of service
tax that is payable by the vessel. The inclusion of this will further inflate the cost.
21.4.2 Cargo related tariffs

Cargo related tariffs (Wharfage and Stevedoring Charges) are the other potential sources
of income for the ports. In India, generally, stevedoring is done by the private operators,
exceptions being Mundra and Krishnapatnam.
Wharfage
Wharfage is a cargo-related charge to recover the costs associated with the provision of
the basic infrastructure and superstructure of the port to facilitate the movement of cargo
from shipside to hinterland and vice versa. It includes the costs of providing roadways,
railways, quays, parking areas, transit shed facilities etc. This charge is applicable on per
unit of export/import cargo handled at the port. However, for container terminals, this
charge is included in the published handling charges.
Handling/Stevedoring charges
The cargo handling services include the movement of cargo from vessel to storage areas
or vice versa within the port, using cargo handling equipments as required. The handling or
stevedoring charge is usually levied per freight tonne, cubic metres or teu of cargoes. In
some cases cargo handling charges include storage charge as well.
The handling charge for bulk commodities varies from type of commodity and the
equipment used to handle the same. There is no standard published card rate for
stevedoring commodities, and the same can vary from customer to customer, depending
upon the type of services and cargo volume included in the contract. The commodities like
coal, iron ore fertiliser, etc. which use mechanised handling equipment generally differ
from other commodities using non-mechanised handling equipments.
338
The base price for handling a commodity is set above the marginal cost involved in
handling that particular commodity, which includes labour, equipment, fuel and other
miscellaneous costs.
During our field survey and discussions with exporters, importers, stevedoring agents
operating in the hinterland, following key variables were identified for calculating handling
charges:
Applicable railway or road freight to/from ports.
Handling prices at competing port.
Port users are willing to pay premium for quality of service provided like overall port
efficiency and equipments used.
Cargo related charges have been discussed separately for each commodity under review.
339
Table 21.17
Total cargo handling charges for various commodities
(INR/tonne)
Cement
Cochin Port
New Mangalore
Port
Azhikkal
Timber
Metal scrap
Finished Fertiliser
Edible oil
Chemical
Foreign
Coastal
Foreign
Coastal
Foreign
Coastal
Foreign
Coastal
Foreign
Coastal
Foreign
Coastal
Foreign
Coastal
Wharfage
72.8
43.7
56
56
56
33.6
112
67.2
57
34.2
91
54.6
109.2
65.5
Cargo handling
charges
385
385
175
175
450
450
250
250
400
400
457.8
428.7
231
231
506
484
362
317
457
434
91
54.6
109.2
65.5
35
21
38
38
43
26.
35
21
41
24.6
46
27.6
85
51
Cargo handling
charges
160
160
260
260
196
196
Total
195
181
298
298
239
222
35
21
41
24.6
46
27.6
85
51
60
36
25
25
50
30
40
24
35
21
50
30
60
36
Cargo handling
charges
150
150
100
100
120
120
337.5
351.5
Total
210
186
125
125
372.5
372.5
Total
Tuticorin Port
Coal
Wharfage
Wharfage
Wharfage
75
56
Cargo handling
charges
25
25
Total
100
81
50
30
160
144
Note: Total cargo handling charges include 'Wharfage' and 'Stevedoring Charges'. The cargo handling charges for Timber for Tuticorin and New Mangalore Port is in INR per cu. m.
* Stevedoring charges for coal at Tuticorin port includes storage charge as well.
Phosphoric acid has been considered for Chemical tariff.
** Includes bagging as well
Edible oil and chemical does not have any stevedoring charge as it is transported by the pipeline
Source: Port Website and Stevedoring Agents of various ports
340
Table 21.17 (contd)

POL
Cochin Port
Wharfage
Tuticorin Port
Foreign
Coastal
Foreign
Coastal
Foreign
Coastal
65
65
49
29.4
250
250
-
300
300
Total
65.0
65.0
349
329.4
250
250
Wharfage
53.7
53.7
30
18
270
270
53.7
53.7
300
288
Wharfage
70
70
35
21
250
250
Total
285
271
Wharfage
Total
Total
Azhikkal
Cruise
New Mangalore Port
Raw Cashew
Source: Port websites, Drewry
341
21.4.3 Tariff forecast
Assumptions
VRC of Vizhinjam Port has been assumed to be equal to that of Tuticorin port as it
charges the lowest tariff amongst the competing ports in the hinterland. So for
Vizhinjam port to be able to compete with the competing ports, it will have to set tariff
near Tuticorin port or below it to divert the cargo from the competing ports.
Constant WPI of 5% has been assumed throughout the forecast period.
Tariff escalation is assumed to 60% of the WPI each year.
Table 21.18
Vessel related tariff forecast: Vizhinjam Port
Port dues (per grt)
Berth Hire (per grt per hour)
Pilotage (per grt)
0.227
0.233
0.240
0.248
0.255
0.263
0.271
0.279
0.287
0.296
0.305
0.314
0.323
0.333
0.343
0.353
0.364
0.375
0.386
0.397
0.409
0.422
0.434
0.447
0.461
0.475
0.489
0.504
0.519
0.534
0.550
0.002
0.002
0.002
0.002
0.002
0.002
0.003
0.003
0.003
0.003
0.003
0.003
0.003
0.003
0.003
0.003
0.003
0.004
0.004
0.004
0.004
0.004
0.004
0.004
0.004
0.004
0.005
0.005
0.005
0.005
0.005
0.307
0.316
0.326
0.336
0.346
0.356
0.367
0.378
0.389
0.401
0.413
0.425
0.438
0.451
0.464
0.478
0.493
0.507
0.523
0.538
0.555
0.571
0.588
0.606
0.624
0.643
0.662
0.682
0.702
0.724
0.745
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
FY31
FY32
FY33
FY34
FY35
FY36
FY37
FY38
FY39
FY40
FY41
FY42
FY43
FY44
342
Table 21.19
Cargo related tariff forecast: Vizhinjam Port
(USD per tonne, unless otherwise specified)
Timber
Fertilizer
Edible
Oil
Coal
POL
Chemical
Raw
Cashew
CementCoastal
Vessels
Cruise
Vessels (per
passenger)
5.8
11.0
1.2
7.5
1.2
2.1
7.5
4.5
12.5
2014-15
6.0
11.4
1.2
7.7
1.2
2.2
7.7
4.7
12.9
2015-16
6.2
11.7
1.2
7.9
1.3
2.3
8.0
4.8
13.3
2016-17
6.4
12.1
1.3
8.1
1.3
2.3
8.2
4.9
13.7
2017-18
6.5
12.4
1.3
8.4
1.3
2.4
8.4
5.1
14.1
2018-19
6.7
12.8
1.3
8.6
1.4
2.5
8.7
5.2
14.5
2019-20
6.9
13.2
1.4
8.9
1.4
2.5
9.0
5.4
14.9
2020-21
7.1
13.6
1.4
9.2
1.5
2.6
9.2
5.6
15.4
2021-22
7.4
14.0
1.5
9.4
1.5
2.7
9.5
5.7
15.8
2022-23
7.6
14.4
1.5
9.7
1.6
2.8
9.8
5.9
16.3
2023-24
7.8
14.8
1.5
10.0
1.6
2.9
10.1
6.1
16.8
2024-25
8.0
15.3
1.6
10.3
1.7
2.9
10.4
6.3
17.3
2025-26
8.3
15.7
1.6
10.6
1.7
3.0
10.7
6.5
17.8
2026-27
8.5
16.2
1.7
10.9
1.8
3.1
11.0
6.6
18.4
2027-28
8.8
16.7
1.7
11.3
1.8
3.2
11.3
6.8
18.9
2028-29
9.1
17.2
1.8
11.6
1.9
3.3
11.7
7.1
19.5
2029-30
9.3
17.7
1.8
12.0
1.9
3.4
12.0
7.3
20.1
2030-31
9.6
18.2
1.9
12.3
2.0
3.5
12.4
7.5
20.7
2031-32
9.9
18.8
2.0
12.7
2.0
3.6
12.8
7.7
21.3
2032-33
10.2
19.3
2.0
13.1
2.1
3.7
13.2
7.9
21.9
2033-34
10.5
19.9
2.1
13.5
2.2
3.8
13.6
8.2
22.6
2034-35
10.8
20.5
2.1
13.9
2.2
4.0
14.0
8.4
23.3
2035-36
11.1
21.1
2.2
14.3
2.3
4.1
14.4
8.7
24.0
2036-37
11.5
21.8
2.3
14.7
2.4
4.2
14.8
8.9
24.7
2037-38
11.8
22.4
2.3
15.2
2.4
4.3
15.3
9.2
25.4
2038-39
12.2
23.1
2.4
15.6
2.5
4.5
15.7
9.5
26.2
2039-40
12.5
23.8
2.5
16.1
2.6
4.6
16.2
9.8
27.0
2040-41
12.9
24.5
2.6
16.6
2.7
4.7
16.7
10.1
27.8
2041-42
13.3
25.2
2.6
17.1
2.7
4.9
17.2
10.4
28.6
2042-43
13.7
26.0
2.7
17.6
2.8
5.0
17.7
10.7
29.5
2043-44
14.1
26.8
2.8
18.1
2.9
5.2
18.2
11.0
30.4
2013-14
343
21.5
Revenue Forecast: Other than container handling
Table 21.20
Revenue from Cargo related charges : Bulk handling at Vizhinjam Port
US dollar
Timber
Fertilizer
Edible
Oil
Coal
POL
Chemical
Raw
Cashew
CementCoastal
Vessels
Cruise
Vessels
Total
2013-14
1,052,267
75,963
5,423
367,471
548,141
300,136
2,349,400
2014-15
86,799
1,083,835
83,719
6,032
397,420
587,463
309,140
2,554,406
2015-16 113,989
6,567
1,116,350
153,777
6,524
425,716
629,773
636,828
3,089,524
2016-17
119,756
183,254
6,764
1,149,840
169,478
7,055
456,027
675,308
655,933
3,423,416
2017-18
150,979
219,739
6,967
1,184,335
186,782
7,630
488,496
724,321
675,611
3,644,861
2018-19
158,619
248,248
7,176
1,219,866
205,852
8,252
523,277
783,353
695,879
3,850,522
2019-20
166,645
278,721
7,391
1,256,461
226,870
8,925
560,535
847,196
716,755
4,069,499
2020-21
290,365
389,092
7,613
1,294,155
371,544
48,261
600,445
916,243 1,107,387
5,025,105
2021-22
303,562
725,341
15,682
1,332,980
405,652
52,194
643,196
990,917 1,140,609
5,610,134
2022-23 317,359
813,853
16,153
1,372,969
442,891
56,448
688,992
1,071,676
1,174,827
5,955,169
2023-24 497,674
908,399
16,637
1,414,158
483,548
59,886
738,048
1,159,018
1,210,072
6,487,441
2024-25 520,293
1,009,329
17,136
1,456,583
527,938
63,533
790,597
1,253,478
1,246,374
6,885,262
2025-26 541,261
1,117,015
17,650
1,500,281
754,037
67,402
838,745
1,355,637
1,283,765
7,475,792
2026-27 750,765
2,463,696
18,180
1,545,289
807,724
71,507
889,824
1,466,121
1,322,278
9,335,384
2027-28 781,021
2,708,483
18,725
1,591,648
865,234
75,862
944,014
1,585,610
1,361,946
9,932,543
2028-29 812,496
2,969,259
19,287
1,639,397
926,839
80,482
1,001,505
1,714,837
1,402,805
10,566,907
2029-30 845,240
3,246,943
19,866
1,688,579
992,829
85,383
1,062,497
1,854,596
1,444,889
11,240,822
2030-31 879,303
4,428,126
51,154
1,739,237
1,572,270
181,165
1,127,203
2,005,746
1,984,314
13,968,517
2031-32 914,739
4,821,190
52,689
1,791,414
1,659,924
192,198
1,195,849
2,169,214
2,043,844
14,841,060
2032-33 951,603
5,239,212
54,269
1,845,156
1,752,464
203,903
1,268,676
2,346,005
2,105,159
15,766,448
2033-34 989,953
5,683,609
55,897
1,900,511
1,850,164
216,321
1,345,939
2,537,204
2,168,314
16,747,911
2034-35 1,029,848
6,155,870
57,574
1,957,526
1,953,311
229,495
1,427,906
2,743,987
2,233,363
17,788,880
2035-36 1,071,351
6,657,569
59,301
2,016,252
2,052,148
243,471
1,514,866
2,967,622
2,300,364
18,882,944
2036-37 1,114,526
7,190,359
61,081
2,076,739
2,155,987
258,298
1,607,121
3,209,483
2,369,375
20,042,970
2037-38 1,159,441
7,755,987
62,913
2,139,042
2,265,080
274,029
1,704,995
3,471,056
2,440,456
21,272,998
2038-39 1,206,167
8,356,289
64,800
2,203,213
2,379,693
290,717
1,808,829
3,753,947
2,513,670
22,577,325
2039-40 1,254,776
8,993,202
66,744
2,269,309
2,500,106
308,422
1,918,987
4,059,893
2,589,080
23,960,518
2040-41 1,305,343 11,602,518
68,747
2,337,388
2,626,611
327,205
2,035,853
4,390,774
2,666,752
27,361,191
2041-42 1,357,948 12,462,152
70,809
2,407,510
2,759,517
347,131
2,159,837
4,748,623
2,746,755
29,060,282
2042-43 1,412,674 13,373,460
72,933
2,479,735
2,899,149
368,272
2,291,371
5,135,635
2,829,158
30,862,387
2043-44 1,469,604 14,339,302
75,121
2,554,127
3,045,846
390,700
2,430,915
5,554,190
2,914,032
32,773,838
344
Table 21.21
Revenue from Vessel related charges : Bulk handling at Vizhinjam
Port
US Dollar
Port Dues
Berth Hire
Pilotage
Total Vessel Related Charges
2013-14
149,104
131,829
201,964
482,897
2014-15
157,197
149,314
212,926
519,437
2015-16
280,454
184,826
378,772
844,052
2016-17
293,496
204,252
399,628
897,377
2017-18
305,777
226,507
416,870
949,155
2018-19
318,045
249,480
433,953
1,001,477
2019-20
330,951
275,337
451,933
1,058,221
2020-21
491,010
376,825
670,640
1,538,475
2021-22
515,328
446,033
708,130
1,669,490
2022-23
536,431
497,370
738,192
1,771,992
2023-24
562,629
604,403
775,258
1,942,289
2024-25
586,074
672,870
808,705
2,067,649
2025-26
631,827
820,640
872,485
2,324,951
2026-27
678,271
1,319,100
958,982
2,956,352
2027-28
707,123
1,478,227
1,002,275
3,187,625
2028-29
737,404
1,656,376
1,047,780
3,441,560
2029-30
769,192
1,855,626
1,095,623
3,720,442
2030-31
1,053,589
2,942,586
1,496,338
5,492,513
2031-32
1,096,654
3,282,176
1,561,321
5,940,151
2032-33
1,141,684
3,659,351
1,629,398
6,430,433
2033-34
1,188,779
4,077,948
1,700,728
6,967,454
2034-35
1,238,047
4,542,227
1,775,483
7,555,757
2035-36
1,288,389
5,047,250
1,852,203
8,187,842
2036-37
1,341,005
5,606,264
1,932,538
8,879,807
2037-38
1,396,006
6,224,753
2,016,674
9,637,433
2038-39
1,453,514
6,908,764
2,104,807
10,467,085
2039-40
1,513,657
7,664,950
2,197,141
11,375,748
2040-41
1,601,668
10,474,239
2,361,892
14,437,799
2041-42
1,669,349
11,634,508
2,468,333
15,772,190
2042-43
1,740,202
12,915,341
2,579,971
17,235,514
2043-44
1,814,392
14,328,689
2,697,074
18,840,155
345
Table 21.22
Sources of Revenue from bulk handling and cruise vessels at
Vizhinjam Port
US Million Dollar
Total Revenue
Cargo
Vessel
Vessel Related
Miscellaneous
Related
Related
and Cargo
Charges
Charges
Charges
Related
(Storage etc)
C= A+B
E = A+B+D
2013-14
2.35
0.48
2.83
0.26
3.09
2.81
2014-15
2.55
0.52
3.07
0.28
3.36
2.77
2015-16
3.09
0.84
3.93
0.34
4.28
3.21
2016-17
3.42
0.90
4.32
0.38
4.70
3.21
2017-18
3.64
0.95
4.59
0.40
5.00
3.10
2018-19
3.85
1.00
4.85
0.43
5.28
2.98
2019-20
4.07
1.06
5.13
0.45
5.58
2.86
2020-21
5.03
1.54
6.56
0.56
7.12
3.32
2021-22
5.61
1.67
7.28
0.62
7.90
3.35
2022-23
5.96
1.77
7.73
0.66
8.39
3.23
2023-24
6.49
1.94
8.43
0.72
9.15
3.21
2024-25
6.89
2.07
8.95
0.77
9.72
3.10
2025-26
7.48
2.32
9.80
0.83
10.63
3.08
2026-27
9.34
2.96
12.29
1.04
13.33
3.51
2027-28
9.93
3.19
13.12
1.10
14.22
3.41
2028-29
10.57
3.44
14.01
1.17
15.18
3.30
2029-30
11.24
3.72
14.96
1.25
16.21
3.21
2030-31
13.97
5.49
19.46
1.55
21.01
3.78
2031-32
14.84
5.94
20.78
1.65
22.43
3.67
2032-33
15.77
6.43
22.20
1.75
23.95
3.56
2033-34
16.75
6.97
23.72
1.86
25.58
3.46
2034-35
17.79
7.56
25.34
1.98
27.32
3.36
2035-36
18.88
8.19
27.07
2.10
29.17
3.26
2036-37
20.04
8.88
28.92
2.23
31.15
3.16
2037-38
21.27
9.64
30.91
2.36
33.27
3.07
2038-39
22.58
10.47
33.04
2.51
35.55
2.98
2039-40
23.96
11.38
35.34
2.66
38.00
2.90
2040-41
27.36
14.44
41.80
3.04
44.84
3.11
2041-42
29.06
15.77
44.83
3.23
48.06
3.03
2042-43
30.86
17.24
48.10
3.43
51.53
2.95
2043-44
32.77
18.84
51.61
3.64
55.26
2.88
from Bulk, Break-
Present
Bulk and Cruise
Value @10%
Operations
Total PV of estimated revenue
98.84
Note: Miscellaneous charges are assumed to be 10% of Cargo handling charges as per TAMP
document
346
21.6
Total revenue from all port operations

Table 21.23
Total revenue from all sources (Container + other operations)
Million US dollar
Total
Revenue
Cargo
Vessel
Related
Related
Charges
Charges
Vessel
Related and
Cargo
Related
Miscellaneous
Charges
(Storage etc)
from
PV of Total
Container,
Revenue from
Bulk, Break-
all Sources
Bulk and
(@10%)
Cruise
Operations
A
C = A+B
2013-14
7.8
1.0
8.8
0.9
9.65
8.78
2014-15
11.1
1.1
12.2
1.2
13.47
11.13
2015-16
15.4
2.0
17.3
1.7
19.06
14.32
2016-17
20.1
2.1
22.2
2.2
24.43
16.69
2017-18
27.3
2.4
29.7
3.0
32.72
20.32
2018-19
33.8
3.4
37.2
3.8
40.94
23.11
2019-20
39.9
3.7
43.6
4.4
48.05
24.66
2020-21
45.9
4.3
50.2
5.1
55.27
25.78
2021-22
51.7
5.3
57.0
5.7
62.73
26.60
2022-23
58.1
5.6
63.8
6.5
70.22
27.07
2023-24
64.5
6.0
70.4
7.2
77.61
27.20
2024-25
71.2
7.4
78.6
7.9
86.56
27.58
2025-26
80.2
8.0
88.2
8.9
97.12
28.13
2026-27
90.7
8.8
99.5
10.1
109.59
28.86
2027-28
100.9
9.3
110.1
11.2
121.32
29.04
2028-29
112.1
10.8
122.9
12.5
135.38
29.46
2029-30
124.6
11.3
135.8
13.8
149.66
29.61
2030-31
135.3
13.4
148.7
15.0
163.74
29.45
2031-32
146.3
14.1
160.4
16.3
176.64
28.88
2032-33
158.1
15.9
174.0
17.6
191.61
28.48
2033-34
170.9
16.9
187.8
19.0
206.78
27.94
2034-35
184.6
17.8
202.3
20.5
222.83
27.37
2035-36
197.5
20.3
217.7
21.9
239.68
26.77
2036-37
211.2
21.4
232.7
23.5
256.14
26.00
2037-38
225.9
22.6
248.5
25.1
273.60
25.25
2038-39
241.6
24.1
265.7
26.8
292.51
24.54
2039-40
258.3
25.4
283.7
28.7
312.39
23.83
2040-41
278.1
30.2
308.3
30.9
339.16
23.52
2041-42
295.3
32.0
327.3
32.8
360.16
22.70
2042-43
313.6
35.4
349.0
34.8
383.89
22.00
2043-44
333.0
37.6
370.6
37.0
407.59
Total PV of estimated revenue form

all sources
21.23
756.33
347
21.7
Revenue from CFS operations

The proposed port Vizhinjam can also develop a port based container freight station (CFS)
near its facility. The CFS would be able to provide groupage services of Less than
Container Loads (LCL) for exporters as well as de-consolodation services for importers.
The potential market for CFS depends primarily upon
the gateway traffic handled by the port
the commodity profile of cargo shipped in containers
proximity of port to its immediate hinterland
ICD facilities at the cargo centers
As discussed in the preceding sections of the report, the proposed Vizhinjam port would
primarily attract gateway container traffic from Southern and Central hinterland of Kerala
which are currently moving to the Cochin port. Therefore, Drewry has benchmarked
proposed CFS operations at the Vizhinjam port against the existing CFS operated by
Cochin port.The commodity profile of cargoes generated from these hinterlands is
dominated by agricultural commodities like coir, cashew and textile products apart from
other goods. These commodities are primarily factory stuffed destuffed and do not use
CFS facilities near the port.
The Cochin CFS operated by the port come under TAMPs purview. The data published by
TAMP with reference to CFSs operations shows the following figures
Description
CFS Traffic (teu)
Cochin Port Traffic
CFS Traffic as % of Port Traffic
FY 2007
FY 2008
FY 2009
FY 2010
5,793
5,282
4,761
3,684
226,808
253,715
260,473
310,000
2.6%
2.1%
1.8%
1.2%
Source: TAMP
Unlike other major container handling ports in India, like JNPT, Mundra and Chennai,
container traffic handled at CFS operated by Cochin port has been unable to attract
significant traffic. The penetration level for Cochin CFS has been around 2.0% over the
past four years. As per our secondary market survey, it is estimated that with addition of
container traffic handled by other private CFS operators near Cochin port, the total share
of CFS traffic is less than 10%.
The low market share is primarily due to commodity profile of container traffic handled at
Cochin wherein a large share of commodities is factory stuffed/ destuffed. It is also
assumed that the proximity of these cargo centers to the ports results in cargo owners
using their own premises for stuffing/destiffing cargoes. As the inland haulage time for
such movements would be very short, the empty containers can be repositioned to the
shipping line within a short period avoiding any demurrage / detention charges.
Therefore, in such a scenario, Drewry estimates that the proposed CFS at the Vizhinjam
port would face the similar market conditions as the Cochin port.
348
Therefore, for conainer traffic and revenue forecast for CFS operations at the proposed
port are as follows: 1.
Proposed CFS would be developed at one of the available parcel land near the
Vizhinjam port
2.
Initial market penetration of CFS would map current market penetration of CFSs
operating outside Cochin port
3.
With increase in gateway traffic, the penetration level of CFS traffic is likely to
increase
4.
Average revenue earned by Cochin CFS is taken as the benchmark for revenue
earned by the proposed Vizhinjam CFS
Description
Revenue / Teu (INR)
FY 2009
FY 2010
4,659
5,521
Average Benchmark Revenue (INR)
4,326
Average Revenue (USD)
97.71
5.
Vizhinjam CFS would offer 15% initial discount on the total charges paid by users
of Cochin CFS. The discount would eventually decrease to 5%
6.
Escalation factor taken for revenue growth is 60% of the increase in Wholesale
Price Index of India for the relevant years
7.
WPI is estimated to growth at 5% per year over the forecast period
8.
Currency for revenue forecast is United State Dollar
9.
Current exchange rate - 1 USD = INR 44.2763
10. Discount factor taken to calculate present value of future income -10%
The forecast suggests that the market share penetration of Vizhinjam CFS is likely to
increase from 5% to 20% over the forecast period. The container traffic handled by the
CFS is likely to register 15.8% growth over 30 years increasing from 1,873 Teu to 153,781
Teu over the forecast period.
The present value of total revenue earned by the facility is estimated to be around
USD42.1 Million.
349
Table 21.24
Traffic & Revenue Forecast from CFS operations at Vizhinjam Base Case Scenario
Size
Gateway
Laden +Empty
(Teu)
CFS Volume
(% Share)
CFS Volume
(Teu)
Revenue
Benchmark
(USD/Teu)
Discount
Offered
(%)
Average Rev /
Per Teu
(USD/Teu)
Total Revenue
CFS
(USD)
PV @ 10%
FY 14
37,459
5.0%
1,873
129.4
15.0%
110.0
205,979
187,253
FY 15
52,715
5.3%
2,768
133.3
15.0%
113.3
313,488
259,081
FY 16
68,990
5.5%
3,794
137.3
15.0%
116.7
442,705
332,611
FY 17
89,380
5.8%
5,139
141.4
15.0%
120.2
617,610
421,836
FY 18
109,787
6.0%
6,587
145.6
15.0%
123.8
815,352
506,270
FY 19
131,432
6.3%
8,215
150.0
15.0%
127.5
1,047,277
591,160
FY 20
138,458
6.6%
9,138
154.5
14.5%
132.1
1,207,058
619,412
FY 21
158,533
7.0%
11,018
159.1
14.0%
136.8
1,507,785
703,393
FY 22
175,977
7.3%
12,846
163.9
13.5%
141.8
1,821,244
772,385
FY 23
197,226
7.7%
15,088
168.8
13.0%
146.9
2,215,928
854,336
FY 24
213,632
8.0%
17,091
173.9
12.5%
152.1
2,600,231
911,365
FY 25
231,067
8.4%
19,294
179.1
12.0%
157.6
3,040,832
968,903
FY 26
257,864
8.8%
22,692
184.5
11.5%
163.3
3,704,579
1,073,085
FY 27
287,015
9.3%
26,549
190.0
11.0%
169.1
4,489,478
1,182,220
FY 28
318,981
9.7%
30,941
195.7
10.5%
175.2
5,419,464
1,297,377
FY 29
354,010
10.2%
35,932
201.6
10.0%
181.4
6,518,653
1,418,649
FY 30
392,371
10.6%
41,591
207.6
5.0%
197.2
8,203,452
1,623,009
FY 31
394,867
11.2%
44,028
213.8
5.0%
203.2
8,944,524
1,608,751
FY 32
419,718
11.7%
49,107
220.3
5.0%
209.3
10,275,707
1,680,160
FY 33
446,059
12.3%
54,642
226.9
5.0%
215.5
11,776,992
1,750,575
FY 34
473,981
12.8%
60,670
233.7
5.0%
222.0
13,468,342
1,819,985
FY 35
503,578
13.4%
67,228
240.7
5.0%
228.7
15,371,942
1,888,381
FY 36
529,723
14.0%
74,161
247.9
5.0%
235.5
17,466,031
1,950,574
FY 37
557,174
14.7%
81,626
255.3
5.0%
242.6
19,800,833
2,010,291
FY 38
585,998
15.3%
89,658
263.0
5.0%
249.9
22,401,642
2,067,582
350
Table 21.24 (contd)

Gateway
Laden +Empty
(Teu)
CFS Volume
(% Share)
FY 39
616,264
16.0%
98,294
270.9
5.0%
FY 40
648,042
16.7%
108,223
279.0
5.0%
FY 41
681,410
17.5%
118,906
287.4
FY 42
709,438
18.2%
129,118
FY 43
738,588
19.0%
FY 44
768,904
20.0%
CAGR
10.6%
Size
Total Revenue
CFS
(USD)
PV @ 10%
257.4
25,296,271
2,122,495
265.1
28,687,074
2,188,184
5.0%
273.0
32,464,406
2,251,191
296.0
5.0%
281.2
36,310,065
2,288,965
139,962
304.9
5.0%
289.7
40,540,563
2,323,321
153,781
314.0
5.0%
298.3
45,879,382
2,390,255
19.7%
42,063,054
CFS Volume
(Teu)
15.8%
Revenue
Benchmark
(USD/Teu)
Discount
Offered
(%)
Average Rev /
Per Teu
(USD/Teu)
351
Annexure
Annexure 1
Port dues charges at select ports in India
(In US$/grt)
Port Dues Range
Mundra
Pipavav
Vizag
Up to 10,000 grt
0.23
0.251
10,001 - 30,000 grt
0.23
0.251
30,000 grt and above
0.23
0.251
0.108
40,000-50,000 grt
0.102
above 50,000 grt
0.096
Up to 9,999 grt
0.175
10,000 - 19,999 grt
0.175
20,000 - 39,999 grt
0.175
0.175
JNPT
Mormugao
New
Mangalore
Chennai
up to 40,000 grt
Mumbai
Cochin
Tuticorin
Kolkata/
Haldia
Up to 3,000 grt
0.149
0.166
0.11248
0.143
0.256
0.106
0.180
3,001 - 10,000 grt
0.211
0.190
0.11248
0.143
0.256
0.106
0.300
10,001 - 30,000 grt
0.211
0.190
0.11248
0.143
0.256
0.106
0.300
30,001 - 60,000 grt
0.211
0.190
0.11248
0.143
0.256
0.106
0.300
0.211
0.190
0.11248
0.143
0.256
0.106
0.300
JNPT port dues includes 39.35% of MPT port dues

Source: Individual port websites TAMP/ Compiled by Drewry
352
Annexure
Annexure 2
Comparison of berth hires fee at select ports in India
(In US$/GRT/hr)
Ports / Vessel Size (GRT)
<3K
3K to 10K
10K to 15K
15K to 20 K
20K to 30K
30K-40K
40K-50K
50 K to 60K
Over 60K
Major Ports
Chennai
0.002890
0.002890
0.002890
0.002890
0.002890
0.002890
0.002890
0.002890
0.002890
Cochin
0.009960
0.006480
0.003960
0.003000
0.003000
0.003000
0.003000
0.003000
0.003960
JNPT
0.003700
0.003700
0.003700
0.003700
0.003700
0.003700
0.003700
0.003700
0.003700
Mormugao
0.003918
0.003918
0.003918
0.003918
0.003918
0.010512
0.010512
0.010512
0.036180
Mumbai
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
Mumbai
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
New Mangalore
0.002100
0.002100
0.002100
0.002100
0.002100
0.002100
0.002100
0.002100
0.002100
Kolkata
0.002500
0.002500
0.002500
0.002500
0.002500
0.002500
0.002500
0.002500
0.002500
Tuticorin
0.024000
0.016000
0.021000
0.026000
0.039000
0.042000
0.042000
0.042000
0.042000
Visakhapatnam
0.004600
0.004600
0.002150
0.002150
0.002150
0.003600
0.003600
0.003600
0.003600
Minor Ports
Pipavav
0.005250
0.005250
0.005250
0.005250
0.005250
0.005250
0.005250
0.004960
0.004670
Mundra/Adani
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
0.007500
353
Annexure
Annexure 3
Comparison of pilotage & towage fee at selected ports in India
(In US$/GRT)
Ports / Vessel
Size (GRT
<3K
3K to 10K
10K to 15K
15K to 20 K
20K to 30K
30K-40K
40K-50K
50 K to 60K
Over 60K
Major Ports
Chennai
0.389
0.269
0.31
0.357
0.507
0.507
0.507
0.507
0.587
JNPT
0.2381
0.2381
0.2381
0.2381
0.1908
0.1908
0.1908
0.1908
0.1669
Mormugao
0.25178
0.25178
0.25178
0.25178
0.20142
0.20142
0.20142
0.20142
0.17625
Mumbai
0.6091
0.6091
0.6091
0.6091
0.6091
0.6091
0.6091
0.6091
0.6091
Tuticorin
0.319
0.319
0.342
0.342
0.366
0.378
0.378
0.378
0.378
Visakhapatnam
0.3261
0.3261
0.3402
0.3402
0.3402
0.4896
0.4896
0.4896
0.4896
Kolkata
0.6435
0.6435
0.6435
0.6435
0.6435
19,305+0.5148 per
grt above 30001
19,305+0.5148 per
grt above 30001
0.32
0.32
0.32
0.32
0.32
9,600+0.256* per
grt above 30,000
9,600+0.256 *per
grt above 30,000
9,600+0.256* per
grt above 30,000
17,280+0.224* per
grt above 60,000
Cochin
0.5564
0.5564
0.5564
0.5564
US $ 16692+ US $
0.4451per GRT
over30,000 GRT
US $ 16,692+
US $ 0.4451per grt
over 30,000 grt
US $ 16,692+
US $ 0.4451per grt
over 30,000 grt
US $ 16,692+
US $ 0.4451per grt
over30,000 grt
US $ 30,045+
US $ 0.3895per grt
over 60,000 grt
Kandla Port
0.388
0.388
0.388
0.388
0.388
New Mangalore
19,305+0.5148 per 34,749+0.45045 per

grt above 30001
grt above 60k
U.S.$ 11,640 + U.S.$ U.S.$ 11,640 + U.S.$ U.S.$ 11,640 + U.S.$

0.310
0.310
0.310
per grt over
per grt over
per grt over
30000
30000
30000
U.S.$ 20,940 +
U.S.$ 0.271
per grt over
60000 grt
Minor Ports
Mundra/Adani
0.455
0.455
0.455
0.455
0.455
0.455
0.455
0.455
0.455
Pipavav
0.378
0.378
0.378
0.378
0.378
0.378
0.357
0.336
0.336
354
Annexure
Annexure 4
List of organisations contacted during market survey
Sl.
Title
No.
Name
Designation
Organisation
Location
Contact Details
Mobile No.
Email id
Focus
Ms.
C. Premakumari Statistical &

Research Officer
Cochin Port Trust
Cochin
91-484-2668206
Ext. 2120
c_prema@cochinport.gov.in
Statistics of
Cochin Port
Dr.
C. Unnikrishnan Jt. Director-SEZ

Nair
Cochin Port Trust
Cochin
91-484-2668153
jointdirector@cochinport.go.in
Vallarpadam
Mr.
Girish Thomas
Asstt. Traffic
Manager
Cochin Port Trust
Cochin
91-484-2666475
girishthomas@cochinport.gov.in
Port Operations
Mr.
Rajendra P.
Paibir
Traffic Manager
Cochin Port Trust
Cochin
91-484-2666418
tm@cochinport.gov.in
Port Operations
Mr.
Shankar
Narayan
Manager
GAC
Cochin
91-484-266 8372
Mr
P Narayan
Director
Chakiyat Agencies
Cochin
91-484-4261600
Mr
Tony Subin
Manager
Maersk Line
Cochin
Mr
T Sivakumar
GM-Cochin
APL
Cochin
Mr
Suresh Joseph GM_IGTPL
DPW
10 Mr
Vikramjit Vasuli DGM (Commercial)
Hindustan Newsprint
Ltd.
11 Mr
D. Ashok Kumar Director
Adityaa Resources
Singapore
12 Mr
Md. Ashraf
Malabar Cement
Walayar
91-491-2862373
13 Capt.
Capt. Ifti
Kinship
Cochin
91-484-2669256
91-9846036396
Bulk
Commodities
14 Mr.
Vijay Anand
Hari &Co.
Tuticorin
91-461-2356706
91-9843421176
Bulk
Commodities
15 Mr.
AK Bhargava
All India Rerollers

Association
New Delhi
91-9911173220
Coal
16 Mr.
Moireen Koya
91-9447489011
Steel
Sales Officer
Director-Raw
Material Purchase
Beepath Casting
Vallarpadam
chakgen@chkiat.net
Container
91-484-3983500
coksalmng@maersk.com
Container
91-484-3072966
t_sivkumar@apl.com
Container
Cochin
91-484-4080201
suresh.joesph@dpworld.com
Container
Mavelloor,
Kottayam
91 4829 256211
Coal
Coal
Coal
355
Annexure
Annexure 4 (contd)
Sl.
Title
No.
Name
Designation
Organisation
17 Mr.
PK Ahmed
Chairman
Steel Manufacturers
Association
18 Mr.
Salahuddin
General Manager
Hari &Co.
Tuticorin
19 Mr.
Subhash Bathia
Ex-IMC
Mumbai
20 Mr.
Shaji
Comercial Manager KSCDC
Kollam
91-9847511950
Raw Cashew
21 Mr.
Unnitan
General Manager
Vijalaxmi Cashew Co.
Kollam
91-124-2741391
Raw Cashew
22 Mr.
S. Senraj
Muthiah
Manager
St. John Freight

Systems
Kollam
91-461-2342521
Raw Cashew
23 Mr.
Shashi Verma
Secretary
24 Mr.
Location
Contact Details
Mobile No.
91-495-2421705
91-9847000202
Focus
Steel
91-9895701242
Bulk
Commodities
Petro propducts
CEPC
Cochin
91-484-2778570
Prashanthi Cashew
Kollam
91-474-2712666
Asiatic Export
Enterprises
Kollam
91-4742708150
91-9447730703
Sanjiv
26 Mr
Sumit Kumar
BPCL
Kochi Refinery
91-484-2821768
27 Capt.
Hari A. Variyar
Nodal Port Officer
Calicut Port
Calicut
91-495-2414863
91-9847017168
28 Mr.
Girish
(Telephonic)
Port Officer
Azhikkal Port
Calicut
91-497-2771413
91-9446732148
29 Mr.
P. Sundaram
MD
Ananth Oil Extraction

Pvt Ltd
Kochi
91-484-2523619
91-9846069800
30 Mr.
P. P. Ashique
MD
Koyenko Expellers
(Kerala) Pvt Ltd
Calicut
91-495-2383811
31 Mr.
A. S. Gopinath MD
Oriental Exim Agency
Kochi
91-484-3017300
32 Mr.
Zacheriah
Thomas
COO, IOC Kochi
IOC
Kochi
91-484-2312741
33 Mr.
P. V.
Sudhakaran
Terminal Manager
IOC
Kochi
91-484-2666015
34 Mr.
Anonymous
Anonymous
BPCL, Kochi Refinery
Ambalamugal
91-484-2722061
Raw Cashew
mail@prashanthi.com
25 Mr.
Email id
Raw Cashew
Raw Cashew
Products
Minor Ports
k_j_ajaykumar@apl.com
Minor Ports
Edible Oil and
DOC
Edible Oil and
DOC
91-9387845000
Timber
POL
91-9447798267
POL
POL & LPG
356
Annexure
Annexure 4 (contd)
Sl.
Title
No.
Name
Designation
Organisation
35 Capt.
Haridas C
Nayar
Port Officer
Neendkara Port, Kollam Kollam
36 Mr.
Martin
Port Officer
Vizhinjam Port
Vizhinjam
91471-2480216
Minor Port
37 Capt.
Jai Prakash
Port Officer
Allapuzha Port
Allapuzha
91-477-2253213
Minor Port
38 Ms.
Ms A M
Mariyama
PA to Port Officer
Allapuzha Port
Allapuzha
91-477-2253213
09447778208
39 Dr.
Dr Jacob
Thomas
Director, DoP
Directorate of Ports
Trivendrum
91-471-2324533
09447015560
drjacobt@gmail.com
Minor Port
40 Mr.
Mohan B Nair
Sr. Engineer (LPG

Engg, IOC)
Kochi Port SEZ
Vallapardam
91-484-2321614
09447498263
mohannairb@gmail.com
Major Port
41 Capt.
Kapil Kekre
GM Strategy
Shreyas Shipping &

Logistics Ltd.
Mumbai
91-22-66220410
09819345821
kapil.shreyas.co.in
Shipping Line
42 Capt.
D. K. Tewari
CEO
MSC Mediterranean
Mumbai
Shipping Company S.A.
91-22-66378102
9820124903
deepak@macindia.com
Shipping Line
43 Capt.
S. P. Rao
Chairman
durirso@svsgroup.in
Shipping
44 Mr.
Paresh Shah
45 Mr.
TK Chanda
Chief Statistician
Location
Contact Details
Mobile No.
91-474-2743825
91-9847147031
SVS Group
Mumbai
91-22-67870016
9987525533
Vopak
Mumbai
91-22-66718884
91-9820059728
Fertiliser Association of New Delhi

India
91-11-26567144
Maersk Line
Email id
Focus
Minor Port
Minor Port
Tank Farm
Fertiliser
46 Mr
Prithwijit Maitra GM - Commercial
Mumbai
91-22-66237886
insalcplmng@maersk.com
Container
47 Mr
Nagesh Kamath Regional Manager - CMA CGM

Equt & intermodal
Mumbai
91-22-39888999
cci-nkamath@coa-cgm.com
Container
48 Mr
Ivan Saldanha
GM - Liner Sales
NYK Line
Mumbai
91-22-3021 8101
ivan_saldanha@in.nykline.com
Container
49 Mr
Ajay Kumar
Director Commercial APL Line
Mumbai
91-22-29890123
K_J_ajaykumar@apl.com
Container
50 Mr
Neil Abeyratne Country Manager
Colombo
94-717630524
neila@keellslogistics.com
Container
John Keells Logistics
357

Markeystudy November2010

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Markeystudy November2010

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Kerala Port PPP Market Study

International Finance Corporation

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Container Traffic Analysis

Kerala economy overview

Historic container traffic analysis

Competing port facilities

Kerala Port PPP Market Study

Capacity projects at upper East Coast ports

Transhipment traffic analysis Indian Subcontinent

Gateway container traffic forecast - India

Transshipment container traffic forecast Indian sub-continent

Vizhinjam vessel traffic forecast

Bulk & Non-Cargo Traffic Analysis

Coal traffic forecast

Coal import: Hinterland analysis

Steel scrap traffic forecast

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Fertilizer and FRM

Chemicals and Petro products

Edible oil and DOC

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Ship repair market

Tariff and Revenues Forecast & Port Strategy

Competitive positioning and marketing

Strategy development approach

Tariff and Revenue forecast

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Annexure 1 Port dues charges at select ports in India

Sectoral distribution of GSDP

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Overview of ports and facilities handling containers at the end of 2008 - 09

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Breakdown of forecast gateway teu, Pakistan, 2010-2044

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Cargo related tariff forecast: Vizhinjam Port

Economic profile of Kerala

Drewry Shipping Consultants Ltd

Kerala Port PPP Market Study

Australia & New Zealand

Build Own Operate Transfer

Build Operate Transfer

Compounded Annual Growth Rate

Central East Coast

Cost and Freight

Container Freight Station

Customs Handling Agent

Cement Manufacturers Association

Container Corporation of India

Common Secondary Hinterland

Central Warehousing Corporation

Dedicated Freight Corridor

Directorate General of Commercial Intelligence and Services

Delhi Mumbai Industrial Corridor