Central Govt To Settle Dispute Between Cochin Port Trust and BPCL Kochi

19 July 2013
Kochi

The central government has decided to intervene to settle the dispute between two public sector entities, the Cochin Port Trust (CPT) and BPCL Kochi Refinery, over sharing the dredging cost of the Cochin Oil Terminal (COT).

Top officials of the ministries of shipping and petroleum have convened a joint meeting of the CPT and refinery to find a mutually-agreeable formula to resolve the dispute. The meeting is likely to take place towards the end of this month, according to CPT sources.

According to CPT officials, the refinery should pay a higher share of the dredging cost than what they pay currently as they are the main users of the terminal. This was critical to tide over the acute financial crisis faced by the port.Earlier, COT had a draft of 9.14 metres. But CPT deepened this to 12.5 metres by dredging when the Rajiv Gandhi Container Terminal (RGCT) started functioning opposite COT. This deeper draft enabled BPCL to bring in larger vessels (of up to 330 metres) and reduce freight cost, says CPT.

According to CPT, they spend about Rs 33 crore annually for dredging the area. The charges that the port realizes from the refinery for dredging is not even one-third the port’s total revenue from COT even though the refinery accounts for 78% of the cargo handled at the terminal, CPT officials said.

Port officials argue that the original understanding was that at least four million tonnes of cargo would be handled at the terminal annually, but this has come down to two million tonnes. “We would have better revenues if there had been higher volumes of cargo,” a port official said.

Source– http://www.thehindu.com/news/cities/Kochi/windmill-leaf-comes-off-again-gcda-redfaced/article4928790.ece

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