The Vallarpadam International Container Transshipment Terminal (ICTT) will soon play host to large mother vessels.
The Centre on Thursday announced the much-awaited relaxation in cabotage provisions for ICTT for three years.
“The Union Govt has announced relaxation in cabotage law for three years, as recommended by the Union Planning Commission. This would be an advantage for the ICTT, in every sense,” Union Minister of State for Food and Civil Supplies K V Thomas said.
Cabotage law is a provision under Section 407(1) of the Merchant Shipping (MS) Act which bans the movement of foreign-flagged vessels along the Indian coast.
Once the relaxation in cabotage law is implemented, foreign-flagged vessels can transport cargo between Indian ports.
It is expected that the ICTT, still struggling to survive, can emerge as a major transshipment hub in Asia once the port-to-port feeder services begin to thrive.
The Planning Commission had recommended in February to the Union Government that the cabotage law could be relaxed for three years for exim containers handled at ICTT. It also suggested that the policy may be extended further.
The Commission opined that the Ministry of Shipping could come up with a policy for encouraging coastal shipping so that the multi-mode transport system could be developed, thereby reducing the pressure on roads.
The Dubai Port World (DP World), which operates the ICTT, the Cochin Port Trust and the state government had been pressing for relaxation in the law even before the commissioning of ICTT.
The stiff provisions in the MS Act was considered to be a hurdle before the ICTT to achieve its full capacity in cargo handling. Though 100 per cent growth was expected, the ICTT has achieved only 7 per cent in the first year after its commissioning in February 2011 and the trend has been negative in the recent months.