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Rediff News  All News  » Business » IOC pipeline to cause Kolkata Port Trust Rs 180 cr loss

IOC pipeline to cause Kolkata Port Trust Rs 180 cr loss

May 21, 2008 13:55 IST

The scheduled commissioning of Indian Oil Corporation's Paradip-Haldia pipeline later this year will reduce the Kolkata Port Trust (KoPT)'s annual revenue by Rs 180 crore (Rs 1.8 billion) by bringing down the cargo movement in the three oil jetties of the Haldia Dock Complex.

"Once the pipeline becomes operational, HDC will lose an annual cargo inflow of 18 million tonne in petroleum and POL products. Given that HDC earns about Rs 100 per metric tonne, the loss works up to Rs 180 crore," Secretary of the Haldia Dock Officers' Forum R K Burman told PTI.

Besides, the three oil jetties at HDC, set up at a cost of about Rs 75 crore (Rs 750 million), would become underutilised, Burman said, adding that the Shipping Corporation of India whose vessels 'lighter-aged' the cargo to Haldia, would also lose the IOC traffic.

With the depth of the Hooghly ranging from six to nine metre between Sagar and Haldia, it is not possible for the IOC to bring in VLCC or ULCC vessels directly to Haldia for discharge of cargo.

These vessels with a parcel size of 3,00,000 to 4,00,000 tonne and a draft requirement of at least 20 metre, have to wait at the Port anchorage in the Sandheads for discharge the cargo into the Shipping Corporation of India vessels.

"Since the VLCC and ULCC vessels had to wait for 10 to 15 days for discharge of their cargo into the SCI vessels, the IOC had to bear demurrage running into several lakhs daily. It made sense for the IOC, therefore, to build the pipeline from Paradip to Haldia to avoid the demurrage," Burman said.

According to Burman, the loss could have been avoided if the KoPT authorities had acted on a report prepared in 1999 by its Planning and Research department, recommending buying of two old VLCC/ULCC vessels and their deployment in the Sandheads as storage tanks for the IOC crude cargo.

"When the report was prepared, the KoPT had estimated that the step would save the IOC an annual demurrage cost of not less than Rs 60 crore (Rs 600 million), but for some unknown reason, this report was not put into effect by the KoPT management," he said.

Burman said the proposed chemical hub at Nayachar could somewhat offset the loss of IOC cargo, but it was not certain as proper dredging had not been taken up.

In September last year, the HDOF had written to chairman of Parliamentary Committee on Transport Sitaram Yechuri.

"We understand that Yechuri-ji had sought an explanation from the shipping ministry, but it had not responded," Burman said.

Asked about the possible loss of revenue owing to the Paradip Haldia pipeline, KoPT chairman A K Chanda was circumspect merely saying, "there is still a lot of demand (for the three oil jetties). Why should there be any loss?"

The KoPT's Public Relations Officer could not be contacted despite repeated attempts.

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