By some indications, this is a scam of larger proportions than the Commonwealth Games fiasco. Take a huge unnecessary project, inflate the costs, get your cronies to cover the inflated expenses by bringing in a private player like DP World in this case, and when the project obviously fails, cry wolf, and then get out
We had earlier reported (See: (See: Cochin Port Trust bats for DP World, LBW cabotage ) on how a one-sided contract between Cochin Port Trust and DP World Ports Vallarpadam Container Terminal, its tenant, had sparked off intense lobbying over cabotage rules. Now we dig a little deeper.
Nothing works better towards getting the truth than digging out the dirt by actually going onsite and sifting through the sediment as well as getting a first-hand grip on matters.
So when my reports on the whole Cochin Port Trust, DP World Ports Vallarpadam Terminal and ICTT (International Container Trans-shipment Terminal) at Kochi started doing the rounds (see link above) and were being quoted—amongst other places, at the Ministry of Shipping and elsewhere, I felt it was time to actually go down to Ground Zero and take a look.
Obviously, it is not easy to get an entry into such high-security areas, but then, where there is a will, there is a way, and the report was too important to be abandoned half-way just because the follow-up needed some solid hard work.
This was not really planned, it was supposed to just be a short detour in life to go back on a ship for a few months, but as things turned out, of all things, I found myself working on a ship, dredging the bottom of the sea right off the Vallarpadam Terminal in Kochi, at times just metres away from the jetty. And more importantly, working with people who knew every inside secret of what was really happening there, and the real games involved. But we get ahead of the report.
Go to Kerala today and talk to most anybody even remotely connected with shipping, and many of them will make it sound as though the removal of cabotage is the ultimate and only way to ensure the development of Kerala, every other logical argument or reason is put aside. And towards that, the reasoning trotted out is that the DP World's Vallarpadam Container Terminal's sheer survival is directly connected to Kerala's industrial development, and that in turn will not happen without cabotage being withdrawn. An issue of national importance and security is to be forsaken because, it is argued by those who push this in Kerala for their UAE-based masters, the commercial and technical importance of Vallarpadam is just too brilliant for the Nation.
That is the major flaw, but like the emperor who wore no clothes, nobody will tell the Chief Minister and his cohorts this. There are those, of course, who know the realities and are now beginning to come out. Speaking to some of them involved the usual "off-the-record" aspect, so, in this article, we present some simple facts, without attributing sources, but which can be easily re-verified.
a) The Vallarpadam Container Terminal even at its best-projected levels will simply not be feasible for 4th Generation and upwards container ships. Third generation container ships are midgets compared to the 6th Generation mainline container ships swinging past through Colombo on their East-West runs. These ships will not be able to enter the Cochin Harbour channel itself, leave alone the Port and the Vallarpadam terminal. A good explanation of the various generations of container ships is given here: http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/containerships.html and you can see that even today, Panamax-sized 3rd Generation ships can hardly call Cochin Port. Still, to give the devil his due, to start with even a 3rd Generation container ship of the 3,000-4,000 TEU (twenty-foot equivalent unit) capacity level at Kochi is very welcome.
To break even, Vallarpadam will need to do between 3 million and 5 million TEUs per annum. As of now, it is doing about 0.3 million through 0.4 million TEUs. Where is this massive jump going to come from? Will shippers from the north suddenly lose interest in Gujarat ports and Mumbai/JNPT to come all the way to Kerala? Will those from the eastern parts abandon Chennai or Tuticorin (or Thoothukudi, as it is called now)? Here's a reality check—which ports are more customer-friendly, and have better rail linkages? The answers are there, clear to see.
b) The Vallarpadam Container Terminal is not going to be commercially feasible as a mainline container port for multiple reasons. For one, the hinterland is seeing development for a variety of reasons—none of which are really industrial—Kerala's economy is growing more due to tourism, remittances and some agriculture than any heavy industries. Sure, there is consumption, but one-way inbound traffic cannot sustain a mainline port—it has to be two-way.
And there is simply not much outward traffic. The terminal, even now, appears to be full of empty containers awaiting repositioning back to the north and west of India, or abroad.
c) Another myth is that Cochin Port is just 10 miles off the main sea-lanes. This would be true for coastal traffic or for ships hugging the Indian coast for whatever reason—mobile phone signal, piracy avoidance, or specifically heading for Indian ports or the Persian Gulf. But a fast container ship with high freeboards and guards on board would use what is called the 8-degree Channel, or other options, well south of Kochi by about 80 miles or even more if it were headed for Colombo, Singapore or Malaysia, to run what is called the "pendulum" between the Red Sea on one side and the Malacca Straits via Colombo on the other.
d) This is not substantiated because like in all things pertaining to shipping, the real numbers never seem to be emanate, but Colombo Port is supposed to be about 2.5 times as efficient in terms of speed of container handling and one-quarter of the price in terms of cost to shipping line, when compared to Cochin Port and its tariff structure.
In any case, the relationship between the corporate entities that operate Colombo Port and Cochin Port are deep to say the least, and they can easily play one off against the other if required. However, as of now, Colombo has dozens of cranes and over six deepwater jetties, while Cochin has only four cranes and two jetties-of which one jetty, the eastern one, is surrounded by extremely shallow water where the port appears to have now realised that the bottom is rock & shale, which will have to be cut out and then dredged. At a very high cost.
e) There has been constant dredging of silt going on for years in Kochi harbour now, and a short stint onboard one of these dredgers reveals that it would be a joke, if it were not for the fact that it is the taxpayer who is paying for this joke. Literally, these dredgers are in the hands of bandicoots and bedbugs, who simply transport some silt and more water from the port to the dumping ground about 10 miles outside, but probably in the interest of prolonging their engagement, are playing some really stupid games which consist of the same silt, sediment and water going in and out of the port. A bit too technical to explain—but you can imagine the process is akin to taking water from Cochin Port, dumping it into the Arabian Sea, and then coming back for more.
f) The side-effect of these silt- and water-movement games is what is known as the 'littoral' effect. This is impacting the beaches, and especially the strips near, for example, Fort Cochin and the famous fishing nets. These areas are being effected, as well as the beaches in and beyond the gut which leads to Vypeen (one of the islands that form part of the city of Kochi), and Fort Cochin. There is every chance that after the beaches, which have already been eroded, the next to go will be the beachfront properties themselves. Either that, or look for huge expense in building retaining walls, rising waters due to climate change adding to the complications.
g) Kochi Refineries Limited (KRL) realised this years ago, its report on this exists and was ignored by the powers-that-be when greedily swallowing the bait for Vallarpadam of heavy capital expense and all that went with it, and so it decided to move out of Cochin Port. Since it made for almost 90% of the revenue and movement, it was persuaded to stay back, and at a huge cost—a new tanker & gas terminal which could easily have been an offshore SBM (Single Buoy Mooring) anywhere along the coast, with deepwater, is coming up along the northern shore outside Kochi harbour. Needless to say, more dredging and port works, as well as deepening of the channel is going to be in order here too—when there were ample less environmentally-sensitive spots all along the Kerala coast which could have been made into deepwater ports for tankers and gas carriers, at much lower cost and disruption.
For some people I spoke to, the whole DP Ports/Vallarpadam Terminal is a scam of larger proportions than, for example, the CWG scam. Take a huge unnecessary project, inflate the costs, get your cronies to cover the inflated expenses by bringing in a private player like DP World in this case, and when the project obviously fails, cry wolf, and then get out.
Whether it is really a huge scam or not, time only will tell, but as of now, the taxpayer has largely paid the bill for a port terminal going nowhere.
The bets are out in Kochi, the money is on DP World likely abandoning the Vallarpadam project and leaving the Government of India with a huge bill paid for a terminal that is going nowhere, and continuous high-cost maintenance dredging at great environmental cost a side-effect. The whole noise about cabotage is just humbug dreamt up to divert real attention.
If anything, a full & proper enquiry should be done on how this
high-cost white elephant came into being in the first case. There is room for good Kerala cuisine in Tihar Jail, too.
In the next article, we will come up with a detailed analysis of the few numbers available for this project.
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