KOCHI: With the shipping ministry proceeding with further deepening of channel for Vallarpadom terminal to accommodate larger vessels, MP Elamaram Kareem has demanded that the Union government make budgetary allocation for the dredging works to avoid a financial crisis for the Cochin Port Authority (CPA).
"Cochin Port has been struggling with severe financial crisis for the reasons derived from the project such as underperforming of the terminal, underutilization of the facility provided with huge public investment and annual recurring expenditure for maintaining the navigation channel by Cochin Port since the terminal was commissioned since 2011," Kareem pointed out in his letter to Sarbananda Sonowal, minister for shipping.
Kareem said that as per the licence agreement, the port is liable to provide draft required for 14.5 meter draft vessels. It is note-worthy that the capital dredging is one time expenditure only whereas maintaining the draft depth is annual recurring expenditure. If this additional liability comes around Rs 100 crore, the port will be pushed to a financial crisis.
Moreover, the port has granted concession for vessel-related charges (VRC) to an average of Rs 60 crore annually in a plea for attracting ships from Colombo and neighbouring ports. Despite all these sacrifices, the container growth rate is organic and revenue to the port does not match the expenses incurred, he said.
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