During the course of my analysis of the Report submitted by the ?Committee of Eminent Persons?, I found that the Report faulted the ?Detailed Project Report (DPR), prepared by the Consultants to the Project?M/s L&T Thornboll. Yet, Cabinet sanction for the SSCP was accorded on the basis of the DPR!! This left me wondering??What sanctity for Cabinet approvals, if the ?due process of application of mind? is conspicuous by its absence?
Report of ?the committee of eminent persons? finds fault with the DPR
Chapter-8: ?Economic Viability And Related Issues?
Para 8.2.3 (pp ?96)
?Hence, it may not be fair to pick up a few developments selectively and object to the viability of the Project, which was worked out sometime ago. As regards the comments made on the approach and assumptions adopted in the DPR, the main argument against the DPR rests on the distance that will be saved by ships that are coming from Europe, America, Persian Gulf and Africa (using Suez Canal). While the DPR takes the savings in distance from Cape Comorin, it has been argued that these ships need not come right up to Cape Comorin to go around Sri Lanka. This observation is valid as the ships coming from Europe, America, Africa etc. need not come to Cape Comorin for going around Sri Lanka. To that extent the savings in distance, particularly for non-coastal cargo, will be less.?
Para 8.2.6 (pp ? 97)
?It is clear from this Table that there is hardly any saving for a ship coming via Port Louis (Mauritius) to the east coast ports. Hence, the point made that the ships coming from Mauritius using Cape of Good Hope route will not use the Channel is valid. However, the consultants have also not identified the ships coming via Mauritius in any of the five origin ? destination pairs identified for the SSC (Table 6.10 of the DPR). It is seen that the difference in distance saved by the ships coming from Suez Canal to the east coast ports as obtained from the Chief Hydrographer and the one given by the Consultants in DPR is only 19 NM. The Consultants in DPR have taken the Channel length as 152 km for calculation of savings in fuel and savings in time charters whereas, the actual Channel length in DPR is 167.22 km. These differences, in Channel length and savings in distance, will have some impact on the savings of the ships.?
Para 8.2.7 (pp ? 98)
The second argument is that the Consultants have taken the average distance saved instead of calculating the savings in distance for each ship journey. It is seen from the distances in the DPR that the distance saved varies from 254 NM to 424 NM. With this variation in distance, taking a simple average of 335.5 NM may not reveal the correct picture. It is seen as per the traffic statement for SSC in DPR (Table 6-11 page 158 of DPR), there is no coastal movement between Chennai and Tuiticorin, where the distance saved is maximum. However, the possibility of cargo movement between these ports exists, when the coastal shipping picks up. Most of the revenue is coming from non-coastal cargo. The average distance saved from Aden to different ports on east coast, excluding Tuiticorin, as per the distances obtained from Chief Hydrographer is 271 NM. The Consultants may have taken average distance so as to determine uniform Channel Charges for all routes; nevertheless, it would have been better if the Consultants had calculated the distance saved for each pair for estimating savings of ships and then recommend a tariff rate. The approach followed by the Consultants to propose tariff @ 75 per cent of savings in one of the alternatives, may result in a scenario where the Channel charges may be higher than the savings. As the tariff @ 50 per cent of savings has been proposed, in the base case IRR, such a situation has been avoided. However, the savings to some ships will be more than 50 per cent while for some it will be lower.?
Para 8.2.8 (pp ? 98)
?It is, however, worthwhile to mention that the average distance taken (142 NM) in the Report captioned ?Review of the Environmental and Economic Aspects of the Sethusamudram Ship Channel Project (SSCP)? is the average of ships taking the Suez route as well as the Mauritius route. This is also not relevant because the DPR does not envisage the ships moving via Cape of Good Hope and Mauritius as potential traffic for SSC. However, the Consultants have not explained how the ships coming from Africa other than Suez route, have not been taken into account while identifying SSC cargo from Africa. Similarly, the Consultants have not clarified how crude oil vessels and inter-port movements within east coast ports, have been excluded.?
Para 8.2.13 (pp ? 100)
? As regards speed of vessels, the Consultants have assumed that the ships will move at an average speed of 12 NM in open sea and 8 NM in the restricted channel. There are some apprehensions about the speed at which ships can move in a regulated channel. – – – – – -. Based on the impression gathered by the Members from the mariners, it is felt that an average speed of 6 to 8 NM in the proposed Channel is not an unreasonable assumption.?
Para 8.2.14 (pp ? 100)
?The proposed Channel is a double lane Channel. The Consultants have recommended a double lane Channel as reducing it to a single lane would have enhanced the waiting period. This could have also been backed by a financial analysis.?
Para 8.2.15 (pp ?100)
?The Consultants have estimated revenues escalating @ five per cent per annum. The revenues come mainly from the Channel charges. The charges are linked to savings in fuel cost and savings in charter costs. Hence, the increase in revenue is related to the increase in charter and bunker prices. The basis for estimating the escalation of five per cent per annum in revenue and costs has not been spelt out. The Consultants have also made no mention of the social cost.?
Para 8.2.16 (pp-100)
?The Consultants have taken 2001-02 as base for port-wise and commodity-wise forecast for next 20 years. The Consultants have taken average parcel load of previous three years from 1999-00 to 2001-02 as the basis to estimate the number of potential ships for the Channel in the next 20 years. Again, the Consultants have taken the DWT wise break up of vessels calling at east coast ports (excluding Tuiticorin) in 2001-02 as the basis to estimate the size-wise number of ships likely to use the Channel. The Committee feels that the Consultants should have taken into account the trend or other developments that may change the inter-se share in future.?
Chapter 6: Environment And Related Issues
?Issue 5: Impact of Cyclones on the Project and also on sedimentation dynamics?
Para 6.4.13 (pp ? 77)
?It appears that all the ports on the coast will be vulnerable and not only the SSCP. Necessary safeguards to deal with cyclone condition have been incorporated in the Project design.?
(Comment: As young mariners, we are taught in the Navigation School, about the dangers posed by the ?Tropical Revolving Storms? (Cyclones) and the precautions and actions to be taken at sea to ?avoid? these ?Cyclones?. These are highlighted in the Admiralty publication ?The Mariner'sHandbook?. But, this is the FIRST TIME, I?m learning about ?necessary precautions? taken to safeguard a ?static entity? called the SSCP?!! Should be in the reckoning for the Nobel Prize in ?SCIENCE?!!)
?Issue 7: Impact of sulphur in the fuel on environment?
Para 6.4.20 (pp ? 79)
?The emission of SO2 due to burning of fuel in ship is considered as a line source. The ships have been recommended to use low sulphur fuel. The emissions envisaged will be low and impact of these emissions on the Marine National Park which is 20 km away from the Channel, considering the dispersion and dilution potential available due to sea wind, is not envisaged?.
(Comment: The use of Low Sulphur High Speed Diesel (LSHSD) by ships will affect the fuel savings costs as LSHSD is nearly 1.5 times costlier than HSD. The difference in rates between HSD and LSHSD can be clearly seen on the website www.bunkerworld.com)
(The writer can be contacted at ?Athreya?A1/8-flat-5 22nd Cross Street Besantnagar, Chennai-600 090)