Haldia Dock Complex - More of politics less of a port March 2018 issue

Haldia Dock Complex - More of politics less of a port

What comes more to mind when you think of Bengal? Fish curry, mishti doi, football, Eden Gardens and Victoria Memorial or communism, protest rallies, dharnas, agitations and trade unions? Odds of the last five are probably higher, isn’t it? So, at a time, when the Mamata Banerjee government is trying, some would say a bit hypocritically, to woo investors back into the state, The Dollar Business decided to do a ground reality check of the state’s leading port - Haldia Dock Complex

Sisir Pradhan | The Dollar Business

 

The reason for picking Haldia Dock Complex (HDC), over its parent Kolkata Port Trust, was simple. A receding channel draft means that large vessels have long stopped calling Kolkata. Haldia, being a riverine port close to the sea, has long become the more preferred port in West Bengal. The Haldia region today, is also fast developing as an industrial zone. Unlike other traditional industrial belts of West Bengal, like Durgapur, Asansol and Kharagpur, which are fast losing their sheen in today’s highly competitive economic environment, Haldia is the face of new age Bengal. At least, that’s what the Bengal government wants (us) to believe.

Red Ghosts

West Bengal’s reputation is no secret. Being the epicentre of communism in India, it, for many decades, has chased industry and investors away. It’s a state where dharnas, bandhs, or as they say in Bengali, dhormoghot are a part of a Bengali’s daily life. However, towards the fag end of CPI(M)’s over three-decade-long  iron grip over the state, investment started trickling in, primarily because of the efforts of the then Chief Minister Buddhadeb Bhattacharjee. And as a result of these investments, not only did several IT and ITeS companies set up shops in Kolkata’s Salt Lake area, but also Haldia saw several heavy industries testing the waters. This short term bonhomie, however, went for a toss after the infamous Singur incident (in the Hooghly district), that saw Tata Motors exiting the state. Singoor also turned out to be a turning point for the fiery Mamata Banerjee’s political career as she toppled the Communists and became the queen of Bengal in the subsequent elections. Interestingly, while her successful mass movement to oust Tata Motors from Singur gave Mamata Banerjee’s local political fortunes a major boost, it also turned out be a turning point for Narendra Modi’s political career as he rolled out the red Carpet for the Tatas, who were scouting for a new location for their Nano project. This was followed by Ratan Tata publicly praising Narendra Modi for being pro-business. The rest, as they say, is history.

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Despite being under the threat of terror attacks, security arrangements at the administrative headquarters of Haldia Dock Complex is very lackadaisical

 

In The Blood

One can learn more about communism by spending a day in West Bengal than reading Das Kapital five times. The communist cadre system has become so ingrained in the society, particularly in the working class, that there is always a sense of rebellion and restlessness in the air. Factory workers, who have been conned and brainwashed by half-baked leftist ideology for decades, continue as pawns in the hands of trade union leaders, who use them to blackmail and extort industrialists. And this is the ground reality even at Haldia, perhaps the last hope for the state.

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Traffic handled by Haldia Dock Complex in FY2014 was significantly lower than what it had handled even a decade back, despite it having a massive hinterland to cater to

 

In another ear

The airport closest to Haldia is at Kolkata, around 130 km away. The port town also has very limited passenger train connectivity. However, roads connecting Haldia and Kolkata are in pretty good shape and there is very good bus connectivity between Haldia and Kolkata, Howrah and Mecheda, a small rail-head located around 60 km away. Haldia also has mixed modes of transportation and one can actually reach the town from Kolkata half-way by road and half-way by ferry. Though I wanted to take a ferry ride, I decided to drop the idea, being aware of the safety standards followed in India. So, I thought of getting into a bus at Mecheda. Not surprisingly, the moment I got down at the Mecheda railway station, I was greeted by a bandh and I was told that all buses are off the road. Since I had several appointments at Haldia Dock Complex (HDC) on that very day, I didn’t take a chance and got myself a cab – a white HM Ambassador. Yes, Ambassadors are not extinct, at least not in West Bengal!

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Haldia Dock Complex is the first dock system in India, with full-fledged container handling facilities. It handled 1,14,000 TEUs container traffic in FY2014

 

Political iron grip

NH-41, which connects the port town to NH-6, is a surprisingly well maintained four-lane bituminous road. The kuccha houses along the highway, thick black smoke emitting rickety trucks and buses and locked factories, though depressive, gave me a head start about what to expect. Trinamool Congress flags flying even from structures that looked as if they might collapse by an ant’s nudge spoke volumes about the marriage between politics and the Bengali society. [The biggest heartbreaker though, was the sight of Trinamool flags flying even atop primary school buildings!]

My arrival in the port town coincided with the Haldia Fair. As a result, most hotels were fully occupied and it took quite a bit of effort to find a small room in a hotel close to the dock. What is also conspicuous in Haldia, other than party offices of Trinamool Congress and CPI(M) is offices of numerous chit fund companies. In fact, the hotel I stayed in, was also owned by a gentleman, currently under the CBI scanner for his involvement in the multi-crore chit fund scam. It was also interesting to know that my hotel was located next to a building which once used to be the regional headquarter of CPI(M). Locals told me that CPI(M) strongman and the alleged mastermind of Nandigram violence in 2007, Lakshman Seth once used to operate from this building and kept an eye on the day-to-day operations inside the dock and at various industries in the region. Today, though, the building welcomes you with broken window panes and a lone decaying life size statue of Lenin!

Variety pf Cargo Handled by Haldia Dock Complex-TheDollarBusiness

 

Not welcome

After checking-in, I called the office of the Haldia Dock Complex’s Deputy Chairman to inform about my arrival. I was promised to be kept updated about his availability. However, when I made a reminder call after a few hours, I was asked to postpone the appointment to the following week! This, despite me having got an appointment several days back. Not perturbed I visited the port to find some answers for myself. But, yet again, I was reminded that I was in Bengal. Seeking answers is blasphemy. Disappointed and disgruntled, I headed back from Jawahar Tower, HDC’s administrative headquarter. On my way back, I came across a group of people, who claimed they had been evicted from their land by HDC, way back in 1977, on the promise that one person from each evicted family would get a job at HDC. And these jobs are what they have been waiting for, for over three decades. Rajkumar Dalapati, a representative of Haldia Ubastu Kalyan Samiti, an association of the evicted families, told The Dollar Business, “We are reeling under poverty. Despite getting an order from the Shipping Ministry, HDC officials are not taking any firm step to resolve the issue.”

It seemed I was not the only soul with grievances against HDC!

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Many users of Haldia Dock Complex claim that its channel urgently needs dredging, but HDC officials continue to turn a blind eye to this single biggest and urgent requirement of the port

 

One of its kind

Kolkata Port is the only riverine major port in India and has been around for almost one-and-a-half century. It has a vast hinterland comprising West Bengal, Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, the North East and our two landlocked neighbours – Nepal and Bhutan. The port has twin dock systems, Kolkata Dock System (KDS) on the eastern bank and Haldia Dock Complex (HDC) on the western bank of river Hooghly. But despite this, its performance has not been anything to write home about, with it handling over 20% less traffic in FY2014 than what it had a decade back. The present, it seems, has decided to leave the port in the past.

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Well Thought Out

Haldia Dock Complex was developed midway between the sea and Kolkata Port due to the navigational restrictions at the latter, and to cater to the requirement of growing trade volumes, especially to accommodate large vessels carrying oil and dry bulk cargo such as grain, ore, coal, sugar, and fertiliser.

The immediate requirement then was the construction of a riverside jetty for the handling of crude oil and petroleum products so that the refinery at Barauni can be supplied with crude oil. The construction on the oil jetty commenced in June 1965 and was completed in July 1968 along with a pipeline connecting the jetty with the refinery at Barauni.

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Subsequently, Haldia Dock Complex was commissioned in the year 1977 on the western bank of river Hooghly. It is also the first dock system in India, with full-fledged container handling facilities. There are 13 berths at HDC. Nine berths are inside the compounded dock system, while the oil jetties are located on the banks of Hooghly. Giving details of the port’s infrastructure, A. K. Mahapatra, Senior Deputy Manager (Shipping and Cargo Handling), HDC, told The Dollar Business, “Out of the 13 berths, Berth nos. 2 and 3 are multi-purpose berths, while Berth no. 4 is a mechanical handling facility dedicated to handle thermal coal for Tamil Nadu Electricity Board, Berth no. 4A is a mechanical berth primarily used to unload coal for SAIL, Berth no. 4B has two mobile harbour cranes which can handle multi-purpose cargo, Berth nos. 5 to 9 can handle multi-purpose cargo, including edible oil and Berth no. 10 to 13 can handle containers.”

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Problems Galore

Haldia, being a riverine port, is dependent on high tide for smooth movement of vessels into the port. Only twice in a day, when water level in the river rises due to high tide, can large vessels enter and sail out of the port. Speaking about this, A. K. Dutta, General Manager (Management & Services), HDC, told The Dollar Business, “I know the limitations of my port. No matter what we do, it is ultimately a riverine port. So, it will not be economically viable to dredge and increase the draft level inside the channel beyond 7.5 metre.” At a time when most ports in the country are aiming at increasing their draft level beyond 20 metre, with an eye to accommodate Capesize vessels, HDC’s pitch to industries is different. For HDC, its biggest draw is faster evacuation, availability of rail rakes, lower railway rake freight rate, and a strategic location catering to a large hinterland. This is the reason why despite having labour union issues and draft restrictions, several industries continue to use it. This, however, doesn’t mean HDC officials can sit back and relax. For, competition for it is stiff.

The biggest challenger to Haldia is Dhamara and to some extent, Paradip. Though Dhamara Port is currently facing evacuation issues, being operated by the Adani Group, it is just a matter of time it catches up with Haldia. And what might make things easy for Dhamara is HDC’s officialdom, which most port users I spoke to claim hardly spend any time in Haldia and mostly operate from Kolkata. As a result, they are far removed from the day-to-day challenges that the port faces. Speaking about one such challenge, leading shipping agency, J. M. Baxi & Co.’s General Manager, P. K. Mukherjee told The Dollar Business, “Despite a much lower cargo volume as compared to other major ports, HDC has congestion issues. Currently, around 48 vessels are waiting at the sea (The Dollar Business had visited Haldia in early February).” Similarly, Devdipta Samanta, Tata Group’s logistics arm, TM International’s Chief (Port Operations) told The Dollar Business, “Due to draft restrictions, bigger vessels cannot sail into the dock. Only Panamax or lower and Handymax vessels that too after lightening cargo at other ports, can enter it. Due to the use of lower capacity vessels, importers end up spending around $1.2/MT additional cost here. Moreover, due to channel restrictions, only 2-3 vessels can come at a time. And the draft at the channel reduces significantly during the summer.” However, even Samanta added that availability of rakes and faster cargo evacuation is what makes them continue to use the port.

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Mafia Rule

Despite tall claims of port authorities regarding bringing down pre-berth waiting period, some port users said the port has around 18 days pre-berth waiting period. Many port users also said that HDC has not conducted capital dredging for more than eight years, which has led to severe drop in draft levels in the channel. It’s worth noting that the riverine port requires regular dredging due to silting at Hooghly and Haldi rivers. In fact, in 2013, a PIL was filed in the Calcutta High Court urging the court’s intervention to ask the port authorities to start dredging!

Apart from bureaucratic hurdles, there have also been allegations by various stakeholders of irregularities at HDC. One such notable incident occurred last year, when General Secretary of Haldia Dock Officer’s Forum, Ramakant Burman claimed that Ripley & Co., which is owned by former Trinamool Congress MP Srinjoy Bose, had duped the port of several thousand crores as the port had allowed the company to handle cargo by just paying Rs.5,400-a-year. This was possible because unlike other ports, Haldia has a peculiar practise of giving shore handling licenses. It’s worth noting that as a result of political brinkmanship and the port’s inability to attract enough cargo to the mechanical coal handling berth, Haldia Bulk Terminal Ltd., a joint venture of ABG Infralogistics Ltd. and French shipping firm Louis Dreyfus Armateurs SA, which had won a tender for mechanical cargo handling at the port, closed its operations just two years into its 10-year contract, citing worsening law and order situation.

Speaking about Burman’s allegations and the state of affairs at HDC in general, Calcutta Port Shore Mazdoor Union Deputy General Secretary, Biman Mistry told The Dollar Business, “TAMP has come out with norms as per which cargo handling agents have to pay the port a minimum of Rs.227/MT for on board and on shore cargo handling. However, after the issue was raised by various authorities, on shore cargo handling is now allotted via tendering process.” Another outcome of such an environment was a leading sugar company – that had set up a sugar plant at Haldia to process imported raw sugar – closing operations. A senior executive of the company, on conditions of anonymity, told The Dollar Business, “Today, condition in Haldia is not very different from what it was during the heydays of CPI(M).”

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The Haldia Dock Complex serves the local area, beside other prominent belts of Bengal, like Durgapur, Asansol and Raniganj and even those in Bihar, Jharkhand & Chhattisgarh

 

If only

Despite tons of factors going against HDC, the local industry is hopeful that the region, thanks to its strategic location and excellent road and rail evacuation facilities, has the potential to become a force to reckon with in future. Validating this, TM International Logistics’ Samanta said, “Steel and power plants are coming up in the vicinity of the port and the port will continue to be the feeder to these units.” Moreover, a new port project is coming up at Sagar Island, which is very close to HDC and to some extent that will help tackle draft issues of the port. Haldia also has vast acres of land under Haldia Development Authority, ample water resources and adequate power supply. It always had a massive hinterland. All it needs is the right political direction. Or may be zero political and all strategic direction. That unfortunately, having spent a few days in Haldia, is something that I will not bet on. 

 

“The business environment in Haldia is now stable” - Ramit Sircar, Senior Programme Manager, Bengal Chamber of Commerce and Industries (BCC&I)

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Ramit Sircar, Senior Programme Manager, Bengal Chamber of Commerce and Industries (BCC&I) 

TDB: In recent times, the West Bengal government has been promoting Haldia as an investment destination. What’s your view on the business environment in the region?

Ramit Sircar (RS): The business environment in Haldia is now stable and is heading in a positive direction. Earlier, there was turmoil due to some external factors, which had adversely affected the industries in Haldia, but now the situation has improved and new investment is coming in. Also, existing industries are expanding and diversifying. For example, Indian Power Corporation Limited (IPCL) is setting up a plant at Haldia, MCCPTA India Corporation Private Limited has gone for an expansion in its existing plant and Haldia Energy Ltd. (operating under CESC Ltd.) has also set up a plant in Haldia.

TDB: What has been the contribution of Haldia Dock Complex to the growth of industry and trade in the region? What more should port authorities do to increase the volume of trade?

RS: Haldia Dock Complex is the sister concern of Kolkata Port Trust and is the only riverine major port in India. It is the backbone of industrial development in Haldia. Other than handling bulk cargo, break-bulk cargo and liquid cargo, it also has container operations in place. It is because of the contributions of Haldia Dock Complex towards industry and trade, that industrialisation has occurred in Haldia. It is one of the main avenues for the development and growth of industry in Haldia. Not only does it serve the local industry, but also other prominent industrial belts of Bengal, like Durgapur, Asansol and Raniganj and to an extent, those in Bihar, Jharkhand and Chhattisgarh.

Haldia Dock Complex authorities should try to develop the 2nd arm, i.e., the Eden Channel at the earliest in order to avoid congestion as it leads to rising cost. Thus, all possible measures need to be taken to decongest the port.

TDB: After the shutting down of Haldia Bulk Terminal Pvt. Ltd., there have been concerns by business establishments over political and union interference. What’s your view on this?

RS: Being an important port for not only Haldia, but for the country as a whole, HDC should not have political and union interferences at any level of operation. Haldia Bulk Terminals Pvt. Ltd., which if I recall correctly was holding Berth nos. 1 and 8 for cargo handling operations, was forced to exit not only from the port but from Haldia itself, primarily because of union and political interferences. It creates a bad image of the port and at Bengal Chamber of Commerce, we feel such an incident should not happen as the port is currently the focal point for industrialisation in Haldia and the rest of West Bengal.

HDC officials should see to it that such an incident doesn’t occur in the future and should take all necessary steps to prevent such situations.

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