Singapore-based PSA International wound up its container terminal operations at India’s Tuticorin Port at the weekend, causing a dent in the country’s port privatisation programme .
In November, media reported how PSA International was seeking a premature exit from the concession at Tuticorin, near Chennai, now renamed VO Chidambaranar (VOC).
PSA Sical began operations in 1999 and had concession rights up to 2028. But the 450,000 teu box terminal, once hailed as the most efficient operator in India, had been embroiled in protracted tariff disputes with the port authority.
This included court action, due to what was regarded as a “skewed” concession deal, set up in India’s nascent economic liberalisation era, covering build-operate-transfer (BOT) projects.
According to industry sources, the terminal has now been handed over to Indian Ports Global (IPG), a public entity formed between the two ports of Nhava Sheva (JNPA) and Kandla, in an interim operational arrangement by VOC. IPG essentially has the government mandate to pursue global port rights.
“VOC has assumed full operational control of berth number 7 to handle all types of cargo, including containers,” the port authority said today.
“The charges applicable for non-containerised cargo are as per the prevailing scale of rates of VOC, and handling of containers will be taken up as per requirements of the trade,” it added.
On the volume front, PSA had been on a declining track for the past few years, from some 170,000 teu in fiscal year 2019-20 to 145,000 teu in 2023-24, and down to 83,000 teu from April to January in the current fiscal year (2024-25), according to the latest data.
“PSA Sical was a top productivity performer and instrumental in creating new benchmarks for the Indian port sector,” a Chennai-based industry observer said.
Dakshin Bharat Gateway Terminal (DBGT), owned by MSC through Bolloré Africa Logistics, is leading the volumes at VOC, handling some 600,000 teu last fiscal year (2023-24) and 535,000 teu from April through January.
According to sources, PSA Sical’s workforce had been laid off with an “attractive” severance package to avert potential hurdles to its early exit.
A VOC port official said: “Overall, it was a golden handshake for the employees, and many of them have also found jobs at other terminals.”
PSA owed VOC a substantial amount in unpaid royalty claims, a matter that will now be determined in the courts.
Local shipper sources don’t see a capacity strain at VOC in the near term, due to other facilities in the region, including PSA Chennai and Adani Ennore Terminal.
“VOC’s feeder volumes moving to/from Colombo or Singapore are unlikely to shift away, but some gateway cargo could be wooed by rival terminals,” suggested one market observer. “There is also an opportunity for Adani’s Vizhinjam Port to target the VOC market once its inland connectivity and feeder networks are developed.”
The troubled exit for PSA comes as rivals DP World and APMT vigorously lobby Indian policymakers for extended concession rights at Nhava Sheva and Pipavav, respectively, which are also valid through 2028. PSA holds a 4.8m teu concession pact at Nhava Sheva, with phase 2 expected to go live in April.
India’s port market is now more dynamic after government tariff guidelines/regulations for BOT projects were made more conducive for private investment, a move underscored by the increasing interest from container lines in the Vadhvan Port development.
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