Coal news and updates

Vizag Port plans new Rs 313-crore coal terminal

Visakhapatnam Port Trust (VPT) has decided to set up a mechanised coal terminal at an investment of Rs 313 crore to better serve its customers, particularly Tamil Nadu Electricity Board (TNEB), the port’s deputy Chairman, P L Haranadh, told ICMW.

The new terminal, christened Thermal Coal Loading Terminal, will have handling capacity of 7.5 million tons (mt), Haranadh added.

He further said, besides setting up a mechanised coal terminal, the port is simultaneously raising the capacity of the container terminal to 1 million tons (mt) TEU (20 feet equivalent unit) from the present 0.5 mt TEU at an investment of Rs 600 crore.

These two modernisation efforts would be, in fact, part of VPT’s Rs 3,000-crore investment initiative to raise its cargo handling capacity from the present 93 mt to 126 mt by 2017-18, the deputy chairman said.

Explaining its usefulness, Haranadh said that, at present, 3.5 mt of thermal coal would come from Mahanadi Coalfields (MCL) in Odisha by rail per annum and would get unloaded in VPT to be shipped to Ennore Port for Tamil Nadu Electricity Board’s (TNEB’s) thermal power plants, but the port has a capacity to handle only 3 mt of coal.

“But with a mechanised terminal and modern conveyer belt and loader, the handling capacity would touch 7.5 mt,” he said.

The deputy chairman said: “This new coal terminal is being set up keeping an eye on prospective thermal coal demand from TNEB.”

Haranadh informed that both the new coal terminal and container terminal would be set up on public-private-partnership (PPP) basis. It is expected that the new thermal coal loading terminal would be fully operational by July this year though functioning of the new container terminal would start from April 2017.

In 2015-16, it is estimated that the port would handle about 58.5 mt of cargo though the target was 60 mt.  In 2016-17, the cargo handling target is beyond 60 mt.

In current fiscal, the port got a drubbing in coal, petroleum products and iron ore handling. Imports of coal and POL and exports of iron ore decreased by 0.5 mt, 1.5 mt and 1.5 mt respectively.

According to Haranadh, the decline in iron ore handling was mainly on account of expiry of trade agreements with Japan and South Korea in November 2015. But as the trade agreement has been renewed of late, VPT now hopes to bounce back in iron ore trade in a big way, he said.

The total iron ore handling by the port in 2015-16 is expected to be 6 mt and it expects to handle as much as 10 mt or iron ore in 2016-17, he said.

Despite a slowdown in iron ore handling, the port’s container handling has risen steadily over the years. While in 2014-15 it was 4.37 mt, it is expected to touch 5.5 mt in 2015-16. The deputy chairman expects the container handling to rise by 15-16% in 2016-17.

However, VPT js not that bullish regarding coal against the backdrop of decline in imports of the same.

Operating income for the port was Rs 810 crore in 2014-15 and Rs 822 crore in 2015-16. The operating surplus was Rs 316 crore in 2014-15 and Rs 310 crore in 2015-16. VPT looks into 2016-17 in a positive manner.

Facing stiff competition from nearby private ports, this state-owned port is trying to revive its own business as well.

According to Haranadh, in 2014-15, the average cargo handling per ship per day was 10,400 tons, but it improved to 12,500 tons in 2015-16.