NEW DELHI, August 8: Colombo port, which handles 70 per cent of total transshipment cargo from India, had better watch out! Competition from south Indian ports is round the corner.

Ports in south India, both on the west and east coasts, are planning to invest up to $2.5 billion, or about 250 billion Sri Lankan rupees, in the next two to three years in a bid to become a hub for container traffic.

In short, they are gearing up to compete with Colombo.

While ports in Tamil Nadu such as those in Chennai, Ennore, Tuticorin and Colachel are adding new facilities, Kerala’s Vallarpadam and Vizhinjam ports too are not far behind.

Colombo is the dominant port in the region. It handled around 3 million TEUs (twenty-foot equivalent units) last year as against its capacity of 3.7 million TEUs. At the current growth rate, the port will reach its full capacity by 2010.

Indian shipping industry sources feel this is the right time for this country to have a transshipment port of its own.

Since the country does not have any hub port like Colombo to accommodate bigger vessels, Indian shippers are incurring additional cost as transshipment fee, which is $150 in Colombo.

India not only can garner a substantial portion of this fee, but also save a lot of money if the ships are handled at the Indian ports. If a container is handled in Chennai, a shipper can save around $400.

According to the National Maritime Development Programme of the federal government here, India’s container throughput will more than triple by 2011-12 from 5.5 million TEUs in 2006-07. With 27 container berths (about 300 m long each) available in the country, there is a need to develop huge additional capacity in its ports for handling containers.

Indian ports like Tuticorin, Colachel and Vizhinjam have natural advantages both in terms of depth and proximity to the international routes.

For instance, Colachel, situated in the southernmost tip of Tamil Nadu, has a natural port protected on all sides by rocks and has a depth of around 15 metre. The port appears like a bay and steamers of 10,000-15,000 tonnes can anchor here. Similarly, Vizhinjam is just 200 nautical miles and 10 hours of sailing from Colombo.

Depth and proximity to international sea route are the two most important criteria for transshipment hubs.

While Vizhinjam has a depth of 20 metres, being just 10 nautical miles away from international lines, it is also a better choice. Coupled with other advantages like low tidal variation and little littoral drift, Vizhinjam holds the maximum potential to be the next major transshipment hub.

"The government should seriously consider developing these ports to replace Colombo. The total transshipment cargo is expected to increase by 80 per cent," says an Indian shipping line official.