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February promises to be a month of turnaround for the International Container Transshipment Terminal (ICTT) at Vallarpadam, as two major issues choking the growth of this Rs 3, 200 crore joint venture between Cochin Port Trust and Dubai Port will be resolved later this month.

Union shipping secretary K Mohandas has confirmed that initiatives have been launched at the level of the Prime Minister's Office to resolve the row over customs inspection of the cargo being handled at the port, by February 15.

Opening of Customs Freight Station (CFS) near ICTT in February will be another factor that will mitigate the customs inspection hurdles at the terminal.

The long-pending demand for giving cabotage waiver to ICTT is also likely to be approved by this month, Mohandas told TOI here.

Prime minister's principal secretary Pulohit Chatterjee had convened a meeting of the secretaries of the ministries of shipping, commerce and finance in New Delhi last week to resolve the bitter turf battle between officials of the customs department and Cochin SEZ over cargo inspection at ICTT.

The government had declared ICTT as an SEZ and the development commissioner officials were arguing that entry to ICTT by anyone including the customs officials should be restricted as per their security norms.

Customs on the other side insisted on a free entry at the ICTT which handles import and export of cargo. 

The dispute had led to curious situations where CISF personnel deployed by SEZ blocked the customs officials from off-loading and re-inspecting some of the cargo already loaded on to the vessels.

The whole episode was threatening to deter many mainline vessels from coming to ICTT, and preferring Colombo instead. 

The PMO-convened meeting has directed the officials of the ministries of commerce, finance and shipping to come up with suggestions to resolve the dispute by February 15.

The best practices adopted at transshipment terminals in Dubai, Singapore and Colombo will be put in place at Vallarpadam, even the customs inspection systems, said Mohandas. Cabotage rules stipulate that only Indian feedervessels can move cargo from one Indian port to another.

other vessels were finding these rules as disincentive to come to Vallarpadam and to opt for ports like Colombo as they can re-ship the cargo from there in foreign flagged vessels even to Indian ports. 

Cochin Port was targeting to achieve 100% in the first year after its entire cargo operations were shifted to ICTT in February 2011. But the growth has been around just around five per cent mark in the first year. 

"We have been hoping to handle 300,000 TEU of international transshipment cargo in the first year at ICTT, but we did practically nothing,'' a port official said. 

This is despite that vessel handling charges at ICTT was much lower compared to other Indian ports and almost equal to that of Colombo. 

A medium-sized vessel with a cargo of 4000 TEU may have to pay about $10,000 at ICTT Vallarpadam and Colombo while the charges could be as high as $40,000 in other India ports like Chennai or Tuticorin.

The turnaround time for vessels at ICTT was also much lower than all other Indian ports and Colombo as well. Mainline shipping operators have already shown keenness to shift their operations from Colombo to Vallarpadam if cabotage rules are relaxed. 

The PMO has directed the officials of the ministries of commerce, finance and shipping to come up with suggestions to resolve the row over customs inspection of the cargo being handled at the port by February 15.