D.P. World fears that the Cabotage law could deter foreign shipping lines from coming to their container terminal which is nearing completion at Vallarpadam, Cochin.
Following sentry of American Eagle Tankers’ vessel in the Indian coastal trade despite stiff opposition from Indian shipping companies, another foreign maritime operator - this time the international terminal operator D.P. World - is enmeshed with Indian ship owners. D.P. World due to commission their transhipment hub at Vallarpadam, Cochin in South India expects two million transhipped containers that are unloaded at Jebel Ali, Colombo and Salalah to get diverted to its terminal provided the Cabotage law is relaxed.
Capt Anil Singh, Senior Vice President & Managing Director of D.P. World Sub Continent in his recent appeal to the Indian adminstration stated that the development of a transhipment hub at Cochin cannot take place unless the Cabotage law is relaxed. He informed that foreign shipping lines have indicated that they will continue to transit India’s Exim container trade over Colombo, etc., as long as the Cabotage laws continues to place constraints.
Referring to section 407 of the Indian Merchant Shipping Act which reserves the coasting trade for Indain flag vessels, he points out that the Act itself was framed at a time when containers trade did not exists. He also draws attention to the fact that though Jawaharlal Nehru Port is being geared for becoming a hub port it does not have the geographical advantage. He insists that it can never become one as no transhipment boxes have been diverted from JNP to Colombo or Jebel Ali as yet.
The shipowners this week refuted Capt Singh’s argument stating that hub ports have developed inspite of strict cabotage law being in existence as in China, South Korea, Brazil, the US, Japan et al. The Indian government had relaxed the Cabotage law for five years in the 1990’s yet there was no significant movement of containers along the Indian coast and no foreign lines came forward to do anything differently than what they thought was in their interests.
They point out that the tariff as well as marine and port charges at Cochin were 3 to 4 times that of Colombo. It would be better these were reduced drastically to attract foreign shipping lines. Accordingly the shipping industry has opposed the proposal for relaxation as they see no impediments to the developments fo the Cochin port.
The tussel is likely to go on. D.P. World will have to come up with a better strategy to make the hub a reality.