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India to audit under performing DP World terminal

Indian officials request audit of DP World's International Container Transhipment Terminal at Vallarpdadam (ICTT).
Indian officials request audit of DP World's International Container Transhipment Terminal at Vallarpdadam (ICTT).
Indian officials request audit of DP World's International Container Transhipment Terminal at Vallarpdadam (ICTT).

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The Indian Shipping Ministry has announced that the Comptroller and Auditor General (CAG), Chennai has been appointed to carry out an audit of DP World’s under-performing International Container Transhipment Terminal at Vallarpdadam (ICTT).

The ministry indicated Sunday that it has informed DP World of its intentions and is awaiting permission from the terminal operator, under the terms of the PPP venture between DP World and the Indian government, permission from DP World for an audit is mandatory.

The Vallarpadam terminal was commissioned in 2011 and has become a cause for concern for its stakeholders, including the Shipping Ministry, Kochi Port and shipping clients due to its under-performance.

The terminal saw 6% growth in cargo throughput in the first quarter, handling 361,000-teu out of its capacity of one-million-teu and DP World has previously stated that the terminal’s under-performance is due to external forces.

The global port operator, which has an international reputation for efficiency, has cited the delay in getting relaxation of India’s Cabotage Law, non-completion of the national highway connectivity for evacuation of the port and failure to achieve 14.5m draft alongside for mainliners as the main reasons for the terminals lacklustre performance.

A source at Kochi Port says that DP World has not yet responded to the audit request.

Of the US $2.6-billion invested in the ICTT project, the government has contributed US $1.4-billion while DP World has invested the other US $1.2-billion.

The revision of the Cabotage Law, which will expire in December this year after a three-year time frame, will be on the agenda of the performance audit.

It appears that the continuation of the cabotage relaxation will be based on the outcome of the performance audit, according to sources at the Shipping Ministry speaking to Indian media.

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