Andhra Pradesh's Krishnapatnam Port has become the second port on India's eastern coast after Vizag to have trans-shipment facility.
Krishnapatnam Port Company Ltd's (KPCL) plans to become a trans-shipment hub by catering to the ports on the eastern coast. A trans-shipment terminal is a hub which will attract smaller feeder vessels with containers that then get loaded onto larger ships for transportation to final destinations abroad.
Exporters and importers benefit hugely as larger vessels bring about economies of scale and lower the cost of operations.
At present, around one fourth of total containers from India are trans-shipped through ports outside the country, mainly Colombo in Sri Lanka and Singapore. Apart from these locations, Jebel Ali in the United Arab Emirates, Salalah in Oman and Port Klang in Malaysia are other ports used for trans-shipment.
Almost 78% of total containers shipped from the ports on the eastern coast are trans-shipped either through Colombo or Singapore.
Hence, there is a need for establishing trans-shipments hubs within the country.
"We have also started trans-shipment of containers. On the east coast of India what happens is that most of the containers that either come into India or go out of the country are not going directly to the destinations, they are trans-shipped at either Colombo or Singapore. It's a great national loss," KPCL chief executive Anil Yendluri told DNA Money.
Lack of large ports with trans-shipment facility is also a drain on foreign exchange as for trans-shipment at other ports like Colombo or Singapore, the cost comes to around $100-300 per container.
"We thought why not have it in India with an efficient handling and where direct liner port calls happen. For example, if containers are for/from Indian ports we hardly charge $40 to 50. In India, we don't charge in dollars, but in rupees. This helps in foreign exchange remaining within the country," said Yendluri.
"At present, containers from Kolkata and Haldia are coming to Krishnapatnam and from here, they are going out. In future, we would like to cater to all other ports on the Bay of Bengal rim."
Promoted by the Hyderabad-based CVR Group, the port started operations in September 2012. Now, there are plans with KPCL to expand its port operations by having 44 berths from 11 at present.
The port has 18.5 metre draught in its harbour that helps in accommodating Capesize vessels. Along with a rollout of expansion plans, the draught is likely to be increased to 22m.
There is no congestion in the navigation channel, a problem faced by some of the major ports of India.
The initial investment done was Rs 8,000 crore, to commission the port on a build-operate-share-transfer basis for a period of 50 years. At the moment, major works for the second phase of expansion are through. The third phase will be rolled out after a few years to handle 200-million-tonne per annum capacity. Presently, the port handles 70-million-tonne per annum.