International Dredging Review

International Dredging Review

Adding to years of increasing silt dredging inaction and recurring bureaucratic delays labor disputes are threatening the continued operation of the Port of Haldia West Bengal’s only deep-water port in which India has invested hundreds of millions of dollars.

Port customers are fleeing Haldia. The Hindu Times reported March 7 that total tonnage at Haldia would drop 23 percent in the coming fiscal year from 54 million tons in FY2008-9 to only 45 million in FY2009-10.

Much of that decline comes from the decision of the Indian Oil Corporation to shift its crude oil shipments to the port of Paradip from where a new pipeline carries the crude to Haldia. Shippers complain that decreasing depths are rendering the Haldia channel virtually unnavigable.
The situation is so critical that in March the Indian finance minister reported that the 2010-11 budget would include funds to build a new deep-water port for Kolkata (Calcutta) at Sagar Island.

Shippers welcomed the news with one small operator telling Shipping and Logistics News an Indian publication “The new port will be a blessing for Bengal considering the abysmal condition of the Haldia port.” Haldia is about 50 miles downstream from Kolkata which has some dock facilities of its own but is not suited for deepwater ships.

Haldia’s dredging crisis is an old story. In August 2008 asked “Is Haldia port drying up?” A state official said the port’s future was “bleak” unless massive capital dredging began immediately.

In August 2009 The Economic Times reported that depths at the two “governing” sand bars of Jellingham and East Auckland measured 5.5 and 5.6 meters respectively. At one point in October 2009 34 vessels were waiting for high tide to enter the port.

Yet by January 2010 after what was described as “extensive dredging” depths at the two shoals stood at only 3.8 meters at Jellingham and 4 at Auckland.

Six dredges continuously engage in maintenance dredging at the port. But an unnamed river pilot told The Economic Times in 2009 “Maintenance dredging on the Hooghly now is like administering a mild antibiotic to a cancer patient who needs chemo.”

The pilot added “Clearly political and administrative will at the highest echelons is missing to actually undertake the much discussed capital dredging operations to ease the siltation problem and save Haldia.”

That lack of political will may have changed but it may be too late. In February shipping minister G. K. Vasan told the Bharat Chamber of Commerce that a new capital dredging project would open up a new channel for Haldia called Eden bypassing Jellingham and East Auckland. He said the cost would be about 995 crore rupees [roughly $220 million]. The Eden channel had been discussed for months.

Many studies have been done of the serpentine channels and shifting bars at the mouth of the Hooghly yet there is no settled consensus on what governs the shifts.

The total resources of the Dredging Corporation of India Ltd. the federal agency responsible for dredging amount to ten trailer suction hopper dredges and two cutter suction dredges with which DCI is supposed to service all of India’s coastal ports.

A key problem slowing dredging projects has been that decision-making authority is distributed among different state and federal government bodies and committees some of which do not coordinate or communicate with each other and each of which blames the others when problems become evident. The Kolkata Port Trust is responsible for Haldia dredging but its dredging proposals must be sent to a variety of committees before final approval.

A May 2007 World Bank report on water resources development among India’s northeast states pointed out the lack of centralized decision-making in waterways policy.

At the same time cities and port authorities often feel pressured to choose the government-owned DCI for dredging projects over more efficient foreign firms because of protectionist policies. Dredging contracts with foreign firms have in the past been terminated before their expiration dates.

As if the dredging crisis weren’t enough a protracted labor dispute halted operations at Haldia early this year. Local authorities seem unable or unwilling to resolve the dispute between two rival unions over port staffing.

French shipping and logistics company Louis Dreyfus Armateurs (LCA) and its required Indian partner Mumbai-based ABG Group won a bid in April 2009 to upgrade cargo handling facilities in Berths 2 and 8 of the port according to The Telegraph.

LDA first wanted to hire about 250 workers from outside the port but ABG decided to issue a tender for a contractor. The winning bidder was backed by the socialist Centre of Indian Trade Unions (CITU) with another union Trinamul coming in a close second. Trinamul is affiliated with the Trinamul Congress party one of West Bengal’s most powerful political parties founded in 1997 by rail magnate Mamata Bannerjee.

Since both unions are affiliated with political parties the winning bidder would have hundreds of relatively lucrative jobs to hand out to party supporters. Although LCA proposed splitting the berths among the two bidders neither party was willing to settle for half a loaf. The consortium tried to hire workers on its own but both unions then began creating obstacles such as preventing vehicles from moving into the docks. The dock authority disclaimed responsibility for resolving the dispute since the stoppages were happening outside port areas and told LCA to appeal to civil authorities around the port.
In January a source within LDA told The Telegraph of Kolkata “Two political parties are at war and the consortium is caught in the middle.”

It’s been nine months since work was supposed to start at the docks. After being granted several extensions LDA could lose its contract if work cannot begin soon.