Rama Setu -1

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<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Project disaster - 2</b>
<i>The Sethusamudram canal will never make profits, argues Preeti Sharma.</i>

10 May 2007: Four, the project will kill the fishing industry and
destroy the livelihood of about 3.5 lakh fishermen in six coastal
districts of Tamil Nadu. Already, dredging activity has scared the
fish to other areas, reducing catches. These waters have anyhow become
dangerous for Indian fishermen. Inadvertently crossing into Sri Lankan
waters, they face firing from the Sri Lankan Navy, which accuses them
of smuggling arms for the Tamil Tigers. On the other hand, the Tamil
Nadu police chief has newly disclosed that the LTTE has had a hand in
the killing of Indian fishermen and even capturing them. With the
upcoming project, the fishermen face a bleak future. While the
shipping minister, Baalu, makes an unacceptable comparison between the
project and alleged increases in catches with the development of the
Tuticorin Port, an NGO representing the fishermen, Coastal Action
Network (CAN), has filed a public interest litigation in the Supreme
Court which is due for hearing in July. The fate of the Sethusamudram
Project rests on the judgment.

The Sethusamudram Project was conceived by a British commander of the
Indian Marine, A.D.Taylor, in 1860. He could well have drawn
inspiration for it from the Suez Canal which was then being
constructed. Nearly one and a half centuries later, India has
commenced on his abandoned dream project, but any similarity it bears
to the vastly profitable Suez Canal or Panama Canal projects is
illusory. SSCP's major backers, including the Tamil Nadu government
and the Tuticorin Port Trust, make untenable comparisons with both
Suez and Panama. While the sixty four kilometre long Panama Canal
saves ships a 22,500 kilometre journey around South America, the Suez
contributes an eighty six percent reduction on a trip that would
otherwise have to be taken about the African continent. On the other
hand, Sethusamudram cuts off sailing time of less than a day and a
distance of about five hundred nautical miles, which is a negligible
saving compared to the costs of using the channel, according to the
calculations of a former deputy chairman of the Tuticorin Port Trust,
K.S.Ramakrishnan.

Any ship using SSCP will have to pay pilotage charges. There are
various ways to calculate pilotage charges. Ramakrishna' s method is
simple. In his short paper of July 2005, he uses the lowest amortized
pilotage charges of Chennai Port. He arrives at a figure of Rs 1.11
lakh per kilometre which a ship has to pay for pilotage. The
comparable cost for Tuticorin Port, which is still recovering its
capital cost on the approach channel, is more than two and a half
times higher. For a channel length of Sethusamudram that would require
pilotage, which Ramakrishnan fixes at fifty six kilometre, even at the
lowest, amortized Chennai Port cost, a ship would end up spending
eight times more than it would to go around Sri Lanka. Ramakrishna,
therefore, concludes that ships won't use the channel.

When Ramakrishnan made his calculation, SSCP had not revealed its
pilotage charges. Later, almost as if to rebut Ramakrishnan, it made
public its tariff plan, but used another formula. These two, that is
Ramakrishnan' s conclusion and SSCP's projections, cannot be
reconciled. But in any case, Captain Balakrishnan, a retired Indian
Navy frigate commander and merchant seaman, says that the bulk of
international shipping, comprising vessels larger than sixty thousand
tonnes, cannot use the SSCP because the draught of ten metres is
inadequate.

Captain Balakrishnan says, "For international shipping, time is of the
essence. Ships cannot afford to wait for pilots and berths, and it is
unlikely that in a channel sixty kilometres long, pilotage will be a
streamlined and time saving affair. At any rate, pilots are always in
shortage. The major container vessels avoid Indian ports by and large,
preferring Colombo in between Singapore and Dubai. Container feeder
vessels from Colombo may use Tuticorin, but this traffic, if it at all
generates, will be negligible in relation to any substantial revenues
for the port. The port will make no money. In addition, this area is
cyclonic. Major shippers do not like cyclonic coasts."

Captain Balakrishnan says that GoMPBPS and further north are virtually
unnavigable during the months of October to January when cyclones rage
in the area. He remembers of his navy days when, on one occasion in
April 1986, for thirty hours he could not see the aircraft carrier
Vikrant during a cyclone. He was providing frigate escort to it.
Everything on his deck was washed away. His radar would not swivel in
strong winds. He also recalls in the early Nineties when an oil
drilling ship broke six heavy anchors in the Cauvery basin and washed
ashore because of powerful cyclonic storms. Captain Balakrishnan says
that ships prefer taking the longer route around Sri Lanka even to go
to Tuticorin and, at any rate, they would burn up fuel forced at a
slow speed of ten knots per hour to go through the channel. "They call
it the cyclonic coast, and the Sethusamudram Project will make no
difference," he says. "And let's forget about the project making any
money."

What galls fierce critics of the Sethusamudram Project, however, is
that it will sink the investments, already projected upwards of Rs
2400 crore, without any chance of recovery. In this, the Tamil Nadu
government mostly covers itself, but loss makers would include the
major stakeholders in the Sethusamudram Project Limited SPV, including
the major port trusts and the Centre. V.Sundaram, a former IAS officer
and the first chairman of the Tuticorin Port Trust, cannot reconcile
to the huge costs of dredging, which would ultimately amount to
nothing. "As the first chairman of the Tuticorin Port Trust, I was a
member of the Lakshminarayanan Committee which was set up to examine
the feasibility of the Sethusamudram Project," says Sundaram. "We
estimated the cost of dredging in 1981 at Rs 180 crore and now it is
shown as Rs 2400 crore (the project dredging estimate is Rs 1719.6
crore), which will further increase. Please investigate why the
dredging costs have shot up and who is making money."

To be continued

Preeti Sharma is Newsinsight. net's Correspondent.
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