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Coal to drive growth of Krishnapatnam Port: Chinta Sasidhar

Operating amidst four established ports in its close vicinity on the eastern seacoast, Krishnapatnam Port, youngest of them all, had achieved a 67% growth in cargo volumes at 40.74 million tonnes on the back of a rise in coal imports during the year 2014-15. Krishnapatnam Port Company Limited (KPCL), the port concessionaire promoted by Hyderabad-based CVR group, thinks there was enough pie for all the players to grow in spite of the overlapping of their hinterland. "All that we now have is congestion across all ports whether they are on the western coast or on the eastern seacoast. So a well planned and well managed port like ours does not have to compete with others to increase the business," says KPCL managing director Chinta Sasidhar.

In an interview with B Dasarath Reddy, Sashidhar said constant improvement in turnaround time at berths through a single window mechanism was helping them handle the growing cargo very efficiently and also in attracting more business. Excerpts of the interview:

There are two ports in Tamil Nadu and three ports in your immediate vicinity in Andhra Pradesh coast partly sharing the hinterland. Yet there has been a steep rise in cargo volumes at your port. What contributed to this growth?

While there have been capacity constraints and bottle necks being faced by the older ports, the rise in import export activity has added to the congestion at port facilities on both the eastern and western sea coasts. This has even led to containerisation of bulk cargo. Now rice is being exported in containers even from our port. So there is enough scope for us to continue this growth trajectory. This year we aim to achieve 50 million tonne cargo volumes.

What steps you have taken to avoid a similar situation at your port?

Our group took part in building every port in the country under our EPC business, gaining deeper insights and experience in port infrastructure. Using that experience we designed our port that can handle upto 200 million tonnes of cargo with the same ease with which we are handling the bulk and contain cargo at present . Normally a single berth handles 3 million tonnes of cargo in a year. We increased the berth's capability to 9 million tonnes already and we plan to take it to 14-15 million tonnes this year by further improving the turnaround time.

Coal is the primary cargo for Krishnapatnam. Will it sustain your growth expectations?

Last year coal imports accounted for over 30 million tonnes of the total cargo we handled at Krishnapatnam. There are four thermal power plants in operation here and there will be a total of 16,000 mw of port-based thermal power capacity, completely dependent on our port. This thermal power capacity alone would require 60 million tonnes of coal imports. As we also meet the hinterland requirements we expect a total import potential for 120 million tonnes of coal at Krishnapatnam in future. In the next 50 years coal will remain competitive to other alternate power sources and port-based power plants offer a further saving on generation costs.

Do you see any change in cargo mix this year? What is the hinterland you are catering to, both in bulk and container cargo?

This year we expect the fertiliser imports to go up at our port. Till last year there were some iron ore imports but we hardly see any iron ore imports this year. Our hinterland extends to areas including Bengaluru and Hyderabad and parts of Maharashtra and South Karnataka.

It was long time since your company had raised around Rs 800 crore from 3i Capital in 2008. It is said that KPCL had spent over Rs 8,000 crore on the port development and other infrastructure as per the reports. Any fund raising plans in the offing for further expansion?

We have been able to generate enough cash flows to constantly spend on the improvement of the port infrastructure. We have spare capacities to meet the demand in the next 2-3 years. We had achieved a 49% increase in revenues at Rs 1,800 crore in 2014-15 and this year too we expect a rise in top line but in%age terms it may be a little lower because of the larger base effect. We have no intent to raise any funds at the moment.

source: http://www.business-standard.com