The Planning Commission has favoured relaxation of the cabotage law for at least three years, which will help the International Container Transshipment Terminal at Vallarpadam see more business.
The decision, conveyed to Union minister K.V. Thomas by the commission’s deputy chairman M.S.
Ahluwalia, has come as a shot in the arm for the country’s first ICTT.
As per the present rules, feeder or mainline vessels are not allowed to carry its containers beyond the terminal to any other port in the country.
As a result, cargo meant for other ports landing at Vallarpadam are being carried only by
Indian-flagged vessels which are costlier and not easily available.
Alhuwalia told Thomas the commission wrote to the government favouring a relaxation of the rules for at least three years after which a review may be undertaken regarding further relaxation.
Thomas, who was pursuing the matter, said this was a crucial decision in favour of the terminal and he would take up the matter with the shipping ministry to take it forward.
The country’s container traffic was more than 70 lakh per annum. Owing to the rules, more than 40 per cent of it was now transshipped through ports in Colombo, Singapore and Dubai.
Each container transshipped from a foreign port would mean an additional Rs 10,000 to the cost, causing a loss of around Rs 3,000 crore annually, port sources said.