CHAPTER 4 TRAFFIC POTENTIAL AT BEYPORE 4.1 Introduction The major Port of Kochi handles most of the Kerala State‟s sea borne traffic. The State ports do not play much significant role. Beypore/Kozhikode, Azhikkal and Vizhinjam are the three active state ports in the state. Main drivers for any port development are the maritime transportation needs of industries (such as Coal for Thermal power plants, Iron ore for Steel plants, fertilizers raw materials, agriculture commodities etc.), development of maritime industries such as ship-repair, ship building or ship breaking yard. It has been brought out in Appendix 2 that in future there is only one FDI coming up in Palakkad for setting up a textile factory. Hence there is little scope for generation of port traffic for Beypore port. Ports are also needed for water borne passenger traffic - ferrying or tourism purposes. 4.2 Key Issues Examined The Consultants have examined the potential for the State run ports, (i) to act as Regional Growth Centres; and (ii) to support major port in reducing pressure. These aspects are briefly discussed in the following paragraphs. 4.2.1 Ports as Regional Growth Centres: (a) Nature of Traffic at Existing Other State Ports 40 other ports out of a total 200 ports handle some traffic of significance. The main cargoes passing through the active minor ports considering all India scenarios are crude, POL products, fertilizer import, iron ore and oil cake exports, coastal movement of clinker and occasional import of food grains/palm oil, etc. Very little local/rural produce is shipped from the immediate hinterland of any of the minor ports. As the neighbouring areas tend to produce similar type of goods, there is little scope for trade between them and whatever small amount of trade takes place, it moves through road. (b) Past Trends in Minor Port Traffic Minor ports have not shown any rapid growth in traffic since 2000. Apart from some state ports handling commodities take fertilizers, iron ore, oil cakes, some food grains/palm oil etc. and, containers, crude and POL products are new cargos at the state ports in Gujarat because of two refineries set-up there, for which dedicated ports have been developed in the recent past. Reliance refinery with expected capacity of 64 MTPA is the largest refinery in India serviced by a non- major state port in Gujarat. (c) Experience Experience globally confirms that where rail and road transport facilities are developed, the scope of minor ports in stimulating local economic activity is limited. In most countries, only bulk cargo such as coal, cement, fertilizer and petroleum products are carried by coastal ships, where as general cargo/agricultural products from the immediate hinterland are moved by road or rail. (d) Link between Ports and Economic Development Port is a vehicle for economic development but not necessarily an initiator. This fact is evident from the growth of traffic at non-major ports since 2000 when state port traffic in maritime states rose to 64 million ton from about 35 million ton from the previous 3 years (1997-1999) mainly due to setting up of port traffic generating industries in Gujarat, Maharashtra and other states. The implementation of Policy of Openness of Indian Economy‟ around 1991, started showing its effect around 1996-97 onward. The objective of setting up of new refineries, power plants, steel mills in maritime states was mainly to reduce the transportation cost of the inputs/outputs. Further implementation of SEZ policy has also boosted the growth in the port traffic. The conclusion, therefore, is that development investment in non-major ports does create or generate marginally economic gains. Substantive development could be justified only if one or more of the following conditions exist: (i) organic growth of traffic beyond the capacity of the existing facilities (ii) concrete plans to set up industrial plants for which special port facilities is required (iii) clear evidence that saving in user costs will be realized to justify the investment. 4.2.2 Reduction of Pressure on Major Ports Almost all major ports have large urban centres with high population densities. For effectively reducing pressure on these centres, it is necessary to shift major activities along with man power associated with it to other locations. Such attempts in the past have had very little success in decentralization because of social and other factors, level of comparable facilities in new centres. On this analogy the minor port can serve as transfer points only if facilities of comparable level to those at the major ports stand provided. 4.2.3 Development of fishing harbour and Passenger / Tourist/ Facilities at Minor Ports Combining commercial and fishing activities with fishing, passenger/tourist facilities at a minor port is advantageous mainly due effecting economies of sharing infrastructural development costs relating to sheltered harbour, access channel, inland links etc. For this reason, development of fishery facilities in commercial ports is already taking place. 4.2.4 The development of state ports should be based on the traffic demand arising from existing or planned port based activities. 4.2.5 Beypore to be developed for ‘What Ship Sizes’ This basic issue need to be reproduced and a strategy formulate based on a review of vessel calls at the Indian west coast ports to ascertain the size wise (DWT) distribution of vessels most likely to trading in the area. During 2008-09, 10574 vessels called at the West Coast ports. The size distribution is given in Table 4.1. Table 4.1 Vessels calling at West Coast Ports (2008-09) Break Bulk Cargo Vessel 2008 - 09 Particulars Kandla Mumbai JNP Mormugao NMP Cochin West „000 DWT Vessels (Kochi) Coast Ports NUMBER OF VESSEL CALLS 0-10 121 231 8 3 24 44 407 10-20 141 198 9 2 22 12 362 20-30 127 142 1 2 24 3 275 30-40 33 31 1 3 68 40-50 13 53 1 67 50-80 13 17 30 80+ 0 Total 448 672 18 8 70 63 1209 PERCENT OF VESSEL CALLS 0-10 27.0 34.4 44.4 37.5 34.3 69.8 33.7 10-20 31.5 29.5 50.0 25.0 31.4 19.0 29.9 20-30 28.3 21.1 5.6 25.0 34.3 4.8 22.7 30-40 7.4 4.6 12.5 4.8 5.6 40-50 2.9 7.9 1.6 5.5 50-80 2.9 2.5 2.5 80+ Total 100 100 100 100 100 100 100 Ship calls (percentagewise) to West Coast Ports by relatively smaller sized ships which mostly carry break bulk cargo are noted as follows: 33.7% of the vessels were up to 10,000 DWT (Draft 8 m). about 29.9% of the vessels were in the range of 10 to 20,000 DWT (Draft 10 m). Thus about 64% of Break Bulk Vessels calling at West Coast ports are below 20,000 DWT. From the above it could be concluded that in absence of any specific industry coming up in Beypore region BB vessels larger than 10 to 15,000 DWT vessels cannot be envisaged now at Beypore Port. Hence, Beypore port development could be based on the assumption, also considering berth length and draft limitations inside the harbour area, to cater for a maximum of 10,000 DWT size vessels in fully loaded condition and occasionally, partially loaded larger vessels with 8 m restricted draft even in the range of 20 ~ 30,000 DWT in size. 4.2.6 Traffic Presently Handled at Beypore Port In 2008-09, about 120,000 Tons of cargo was handled here (comprising 11,300 T of Hydrocarbons, 18,560T of Soda Ash, 11,830T of Cement, 25,010T of metal / Iron & Steel products, 18,100T of Food grains & Misc. cargo 35,290 T). All cargo movements were through coastal vessels. Cargo shipment such as POL Products, LPG & household goods for Lakshadweep are presently handled at Beypore Port. 4.3 Methodology for Traffic Assessment There are mainly two methods of traffic estimation, namely – Assessment by mathematical methods & by end user Method. Mathematical Models It has been established all over the world that port traffic has a direct co-relationship with the GDP of the country. Various mathematical models have been deployed to assess growth of traffic at a port. Past traffic data is analyzed using different models to establish a relationship between the traffic & other economic indices. A pictorial presentation of the above is given in Fig. 4.1. End User Method Forecasting techniques using mathematical models are based on past data and the trends. It has limitations, these do not take into account the effects of special happenings/economic developments in the hinterland. In order to estimate the traffic more realistically – end user method is employed where special economic development activities are considered to assess the impact on port traffic. In this method the needs of port users/stakeholders are assessed and analysed. The pictorial presentation is given in Fig. 4.2. In any process of traffic estimation for a port delineation of the hinterland of port, the economic activities historical (time series) therein and special events/planning a prognosis are studied. In case of Kerala ports immediate hinterland in Kerala and South Western India extended hinterland could be considered as the economic activities of the region. In this context, the economy of Kerala and ports in Kerala were studied and are placed as Appendix 2 & 3. FIG. 4.1 METHODOLOGY TO ESTIMATE TRAFFIC MATHEMATICAL MODEL Models Used are - Traffic with GDP Growth o Linear Regression o Power Function Growth Model Time Trend Analysis Estimate BB Traffic at All Ports in India Traffic for Traffic for All Ports Kerala Ports Elsewhere Traffic for Traffic for Kochi Port Other Kerala State Ports Traffic for Beypore Port METHODOLOGY TO ESTIMATE TRAFFIC FIG.