Plea to support the Port of Kochi to cover recurring dredging costs

Elamaram Kareem, MP, expressed his concerns about the financial condition of the Cochin Port Authority (CPA) and appealed to the Union Minister for Ports, Shipping and Waterways, Sarbananda Sonowal, to provide financial support to the port authority to cover its recurring annual maintenance dredging expenses as it can be saved from a financial crisis.

The appeal comes after the Department learned it had approved a capital dredging plan that includes spending around £400m on better drafting.

Mr Kareem said it was news that the permit in principle had been granted for dredging to increase the depth of the channel for the Vallarpadam International Container Transshipment Terminal. In his letter to the minister, he said that the port of Kochi had difficulties in conducting maintenance dredging in the past due to severe financial constraints and the situation remains as it is.

The letter alleged that the Vallarpadam terminal was underperforming despite the Port Authority spending on annual dredging to maintain the depth of the shipping channel. In addition, the government had provided significant public funds for infrastructure.

The facility was inaugurated in 2011. The license term for the Build-Operate-Transfer (BOT) agreement between the CPA and India Gateway Terminal-DP World, which operates the facility, is 30 years. At the same time, there is the question of a guaranteed minimum throughput, Mr. Kareem said.

The port of Kochi spends around £140m annually to maintain the depth of the channel. The Port Authority also pays vessel-related fees averaging ₹60 crore annually to attract more vessels from the neighboring port of Colombo. Despite these measures, the volume growth at the container terminal and the resulting income for the port are not sufficient to cover the associated expenses.

The letter also claimed that around 85% of the cargo handled by the Vallarpadam terminal is coastal cargo.

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