VPT chalks out new plan to regain business
Visakhapatnam Port Trust (VPT), one of India’s leading state-owned ports that lost significant business to neighbouring privately-owned Gangavaram Port for years, is gearing up to regain business through improving efficiencies, and has termed the coming fiscal as a ‘turnaround year’.
One of VPT’s largest customer, Rashtriya Ispat Nigam (RINL) that runs Vizag Steel Plant, had years ago shifted to Gangavaram Port situated next door to save on logistics costs for import of raw materials and export of finished products.
VPT has now firmed up plans for capacity augmentation and modernization involving at least INR 3,000 cr, increasing the cargo handling capacity by a third, and addressing bottlenecks related to last-mile road and rail connectivity to the port.
The port’s deputy chairman PL Haranadh said that the port has already spent around INR 2,500 crore over the last 3-4 years that helped augmenting capacity to 93 million tonnes (mt) from 60 mt, apart from modernizing cargo handling facilities.
“We are pioneers in going in for public-private-partnership model in awarding berths, which has significantly increased our efficiencies,” he said on the sidelines of East Coast Maritime Business Summit in Visakhapatnam last week.
The VPT top official said the latest expansion and modernization should take the port’s cargo handling capacity to 124 mt by 2016-17 end.
India’s major and non-major ports together handled around 1,050 mt of cargo last fiscal, with ports on the country’s east coast accounting for 397 mt, or around 38%.
Haranadh cited the rich mineral production of nearly a third of India’s capacity within 600 kilometers from Vizag Port, the upcoming Vizag-Chennai Industrial Corridor, petrochemicals region and Andhra Pradesh’s plans on manufacturing hubs that are likely to trigger raw materials needs manyfold.
Haranadh said that “Vizag Port has taken up many prudent steps which will go a long way in attracting the traffic on the east coast.”
The port has also constituted a business development team following the recommendations of Boston Consulting Group, which was engaged to understand the bottle necks and unlock the port’s potential. Despite being a government owned port, VPT has now attained flexibilities in terms of costs and policies to help its customers.
“We consider 2015-16 as the turnaround year as far as efficiencies are concerned. The average turnaround time of vessel has already come down by 30% and the average output per ship has come up by 20%, which are very good indicators.”