The Hindu Business Line : Cut in coal linkage to Ennore may hit Paradip port

THE decision to cut down the January-March 2006 thermal coal shipment linkage by the coastal route from Paradip to Ennore has upset Paradip Port Trust (PPT), more so because the linkage is being systematically pruned for the past several months.

Thus, the July-September 2005 linkage was reduced to 6.45 lakh tonnes a month from the April-June linkage of 7.9 lakh tonnes a month, to six lakh tonnes a month in October-December quarter and further to 4.95 lakh tonnes a month for January-March 2006 quarter.

PPT authorities have reacted sharply to these measures. Firstly, they are not convinced that the demand for coal could really drop during the most productive period of the year, the January-March quarter, when the economy is generally on the upswing.

Secondly, they wonder about the fate of the mechanised coal handling plant installed at the port at a huge investment and with assistance from the Asian Development Bank. PPT is being required to bear the burden of the repayment of the loan, including interest raised to set up the plant, whose throughput remains at a low level even as the plant has the capacity to handle 20 million tonnes annually, or roughly 1.8 million tonnes a month.

There is another problem. The drop in thermal coal shipments coincides with the rise in the import of coal, both coking and non-coking varieties. But PPT does not stand to gain by this trend. Traditionally, thermal coal (for coastal shipment) has been the single largest item of traffic of the port and therefore all the port facilities have been geared to meet that traffic.

The rise in coal import is a recent phenomenon for which the port authorities were not prepared with the result they are now finding it difficult to cope with the situation. The sudden change in the traffic pattern has thrown up myriad new issues not easy to resolve.

Meanwhile, the Steel Authority of India for the first time has started importing boiler coal. A consignment of 45,000 tonnes has arrived at Paradip port, awaiting dispatch to Bokaro power supply of the Bokaro steel plant.

Enquiries reveal that another one-lakh tonnes or so are likely to imported by SAIL through the same port during the remainder of the current fiscal. Which means the Railways will be required to place additional rakes at the port for the evacuation of the imported material.