Lower Exports Drag Down Paradip Port Profit.

The net revenue surplus of Paradip Port Trust (PPT) has dipped by six percent to Rs 256 crore in 2010-11 down from Rs. 240 crore in the previous fiscal. This is mainly because of drop in iron ore and thermal coal shipments, said port officials.

“There is less exports of 2.3 million tonnes of iron ore and 1.5 million tonne of thermal coal compared to the last year. While all other cargo shipments have shown an increasing trend, the export of these two commodities have reduced”, said a release of the port trust.

Around 13.85 million tonne iron ore were shipped in 2010-11, down by 14.3 per cent from 2009-10. Thermal coal exports slipped to 13.3 million tonne, registering a drop of 10.4 per cent.

Total trafiic of the port declined by 1.7 per cent to 56 milion tonnes.

“The drop in iron ore exports affected our profit margins. Lower Chinese demand and problems in logistics were the main reasons for fall in iron ore shipments.” said G J Rao, chairman of Paradip port, while addressing the media.

The iron ore exports also sagged because of problems in transport of the mineral from producing areas to the port, said another port official.

“There was non-availability of railway wagons to carry iron ore from mines to the port. We did not get the exact number of wagons that was needed,” said Saroj Mishra, traffic manager of the port trust.

The port trust chairman also cited the announcement of four fold rise in iron ore export duty as the reason for slump in exports. The new duty became effective on 1 April, 2011. But its announcement in the Union Budget 2011 in March had dented importers’ sentiment and hence, affected the port traffic significantly last month, Rao said.

The export duty was hiked to 20 per cent to ensure better availability of iron ore for local steel producers.

But sources said, it was mainly the restrictions and stricter norms imposed by Government of Orissa for mines in 2009 that squeezed iron ore supply in the state and hence, affected the shipments.

The chairman, however, did not agree that the government's step was alone to be blamed for fall in shipments.

He said that the traffic of Paradip port will not be affected by the proposed captive port to be set up by Korean steel major Posco.

“I am sure the Posco port will not affect the business of Paradip port. They have not started their port yet. They will depend on us till they build their own port. Even after that, Paradip port will continue to do well because of its higher capacity,” he said

The port is planning to increase its traffic capacity to 237 million tonne by 2020, from 76 million tonne present capacity.

The main addition in the capacity includes 22 million tonne for crude oil by Indian Oil Corporation, 95 million tonne for iron ore and coal, 20 million tonne for liquefied natural gas and a multipurpose berth which will have a capacity of 15 million tonne.

Source : sify.com