KATHMANDU, Aug 3: Though economists are positive about gradual shift of imports through Vishakapatnam from Kolkata, they recommend bringing Electronic Cargo Tracking System (ECTS) into the legal framework, stating that it will end the monopoly of shipping companies.
With the increasing congestion and chaos in Kolkata – the oldest port of India – Nepali traders have been gradually shifting from Kolkata to Visakhapatnam (Vizag) for imports.
According to data from Himalayan Terminals, 82,208 containers came from Kolkata and 4,746 containers came from Vizag in the Indian Fiscal Year 2017/18. In 2018/19, the number of containers coming from Kolkata decreased to 79,777 and those coming from Visakhapatnam increased to 17, 056.
On the other hand, Dhamra port which is in Odisha province, is also ready to provide service to Nepal.
Traders say that bringing containers is quite convenient from Vizag port reasoning that the shipping line is maintained by the private sector which makes the process more efficient there than in Kolkata port, which is run by the government.
"Though it is cheaper to use Kolkata port, the work efficiency in Vizag port has led us to shift towards this port," said Pradip Kedia, former president of Birgunj Chamber of Commerce and Industries. The distance from Kolkata to Birgunj is 706 kilometers, whereas the distance from Visakhapatnam is 1,439 kilometers.
"Nepal has been spending around Rs 3 billion every year in Kolkata. However, in Visakhapatnam, there will be savings in terms of demurrage charge. This is a benefit to import from Vizag port," said Posh Raj Pandey, chairman of South Asia Watch on Trade, Economics and Environment (SAWTEE).
Meanwhile, Rajan Sharma, former president of Nepal Freight Forwarders Association, was skeptical about implementing ECTS. He said that though the cost of ocean freight would be less from Vizag, other costs should be analyzed before deciding to shift from Kolkata. He stressed that ECTS should be optional rather than mandatory.
“We need ECTS system for consignments through road, not through railway, where it is sure that there will be no diversion,” he said. Economist Purshottam Ojha said that it is beneficial to bring containers through Vizag as it is a deep sea port which lets more containers come in a mainline vessel.
Ojha also said that the though ECTS has been started as a pilot project, now it is time to bring it under the legal framework.
He added that it should be included in the treaty of transit. “All the traditional processes should be removed with the ECTS system implementation. Process needs to be simplified,” Ojha said.
Pandey said that as there are less shipping companies coming to Nepal, they are taking advantage of this. “There is a monopoly of shipping companies. In this case, the government should negotiate so that other stakeholders will not be affected due to high charge,” Pandey said.