Sri Lanka's bustling Colombo Port could soon face a serious challenge from India's Cochin Port, which is being developed into an international trans-shipment hub.
Port authorities said Cochin Port would in eight years handle around 15 times the number of containers that it processes today, thanks to the Vallarpadam International Trans-shipment Container Terminal project being constructed by Dubai Ports.
And in order to woo away international shipping liners that usually dock at Colombo, it is offering an attractive 50 per cent discount on vessel-related charges to mainline vessels from September 1.
According to Cochin Port Chairman N Ramachandran, with the Vallarpadam Container Terminal project being implemented, Cochin Port will handle around 4 million twenty-foot equivalent units in 2014 from the current 250,000 TEUs.
A huge chunk of cargo from India is now moved to Colombo using feeder vessels, from where it is shifted to mother vessels that carry the goods to their final destinations across the globe.
International liners carrying containers from West Asia to Europe, the US and to South East Asia, for instance, also avail the trans-shipment facility offered by the Colombo Port.
However, once the Vallarpadam terminal comes into existence, these international shipping liners can choose between Colombo and Cochin.
Indian exporters would save about a fortnight's transit time once they start trans-shipping containers from Cochin instead of Colombo, said Ramachandran.
Colombo Port has the capacity to handle around 4 million TEUs. Cochin Port, on the other hand, handled only around 202,000 TEUs of container cargo last year.
Ramachandran said with Cochin Port being developed into a trans-shipment hub, it would become the preferred port for cargo from anywhere in the country.
"We expect that a good deal of container traffic will head straight to Cochin Port," he said, playing down the stiff competition that is expected to ensue between Colombo and Cochin.
"Ours is the only port that has surplus capacity. Most ports in India are congested," he added.
Some of the cargo that is now handled by ports such as Tuticorin and Chennai may end up being re-routed through Cochin Port.
According to Ramachandran, the port is also preparing to receive mother vessels with the draught being further deepened to 14 metres from 12.5 metres.
This will enable the port to handle ships that can carry more than 8,000 TEUs, whereas the largest vessel to be serviced at Cochin Port now is a mainline vessel that can carry around 3,000 TEUs.
Almost as if to gear up for the competition, the Sri Lankan government has entered into a memorandum of understanding with the Asian Development Bank for financing the expansion of Colombo Port.
Stage I of the port facility with one 1,200 m long terminal having the ability to berth at least three container ships is expected to be completed by 2009. This will enhance Colombo Port's capacity by 2.4 million TEUs.