Paradip Port has had its fair share of ups and downs. From being hit by a deadly super cyclone two decades back, and being criticised for investment in capacity expansion at a time when infra spends were being curtailed by the UPA-led government, it has come a long way to hit the 100-million tonne mark in handling cargo, this year.
In 1966, Pradip Port, located in Odisha’s Jagatsinghpur district on the eastern coast, used to handle only iron ore. Later, it began handling imported coal, iron ore and bauxite—essential inputs for steel and aluminum plants being set up in the hinterlands of Odisha, Chhattisgarh and Jharkhand. Nonetheless, these were considered 'dirty cargo' in shipping circles.
Today, Pradip Port stands with its array of conveyor belts, warehouses, modern ground handling equipment, cranes, and shipping berths—a drastic change from five years ago.
In 2012, the port had handled 56.55 million tonne traffic. In Apr 13, 2018, it handled 102 million tonne traffic, till the close of the 2017-18 fiscal. The growth path for Paradip was not rosy, and it came with a lot of foresight from the Paradip Port Trust employees—who have been part of the port for years—and the chairpersons at the port's helm.
In five years, Paradip Port has transformed itself into a powerhouse of India's economic development. The port made investments in building its infrastructure, including having deeper berths to accommodate longer and heavier ships, commissioned an oil jetty dedicated for the use of Indian Oil refinery in Paradip, and completed a clean cargo terminal for containers.
But growth of Paradip Port did not just come out of new infrastructure. "We had stressed on higher efficiency of assets and manpower, made it a more competitive atmosphere for employees, and the cost reduction achieved was passed on to the customer," said Rinkesh Roy, chairman, Paradip Port Trust, on what transformed the port.
Paradip also became the largest dry cargo handling port in the country this year. So, why is Paradip port drawing business? "We have achieved better handling and reduced waiting time,” said Roy.
"We played the volume game. We had not increased our rates in last five years. Yet, our revenue has grown, and in the future also we see no need to increase our rates," says Roy. The Port Trust's traffic volume had grown at an annual rate of 20 per cent in the last five years.
Having diversified into newer segments, it is now handling container cargo, and other clean cargo like food and fertilisers. With this diversification, Paradip has broken the norm that most port trusts in the country report annual losses year after year.
Paradip Port does not want to stop there. It wants to enhance its steel handling capacity, which has gone up with exports from the Kalinganagar Steel Plant, and new iron pellet plants announced by Essar in the vicinity of the port. It is also building capacity to handle chemical fertilisers to aid farmers in the region.
So far, Paradip Phosphate Ltd, a PSU, was the only client landing chemical fertiliser in the port, but demands on the horizon, as seen from the portside, seems to be only growing. As would be the demand for landing bulk cargo, with new steel and aluminum plants being set up in Odisha and Chhattisgarh.
The port's own operating cost has also seen a significant reduction as a result of new revenue streams and improved efficiency. From having an operating cost of Rs 80 for landing per tonne on the port, it now incurs only Rs 62-63 per tonne—a 21 per cent reduction in operating cost for the port.
Paradip Port is also channeling some of its revenue for developments inland. For example, it is developing a multi-modal logistics park with CONCOR, over a 100-acre area near the port. Once completed, it would have warehousing capacity to hold 1.1 million tonne of container goods.
The port has a capacity to handle 277 mt a year, making it the largest port in the country in terms of rated capacity.
Ship turnaround time at Paradip—time taken for a ship to unload, load and sail off—a measure of port’s efficiency, has reduced from 7.01 days in FY15 to 3.34 days this year. The pre-berthing delay has reduced from 4.11 days in FY15 to 2.81 days now.
The port’s mechanised coal handling facility has seen efficiency improvement from 33,000 tonnes per day (tpd) to 56,000 tpd and 1,300 tonnes per hour (tph) to 2,400 tph in three years.
Going ahead, the port plans to raise capacity to 325 mt by 2025 from 277 mt today. A massive Rs 10,000 crore outer harbour project, to accommodate capsize vessels is also on the cards. It is also building a smart city at an investment of Rs 2,770 crore.
"We want to translate Paradip as a distribution hub for entire eastern India," said Roy, indicating at the large hinterland that the port covers. So, come what may, in the next five years, Paradip Port is preparing to hit the 150 million tonne cargo traffic mark.