The state-run Container Corporation of India Ltd (CONCOR) has picked Vishwa Samudra Coastal Lines Ltd to launch coastal shipping services from January, seeking to benefit from the impetus given by the government to the waterway mode to decongest the road and rail network.

Vishwa Samudra Coastal placed the lowest per voyage rate of Rs 2.49 crore in a tender issued by Concor to select a service provider, at least two persons briefed on the outcome of the tender said, asking not to be named.

Seaport Cargo Logistics Pvt Ltd, a unit of the CVR Group that runs Krishnapatnam Port in Nellore district of Andhra Pradesh, holds a 60 per cent stake in Vishwa Samudra Coastal, with Hyderabad-based Vm Logistics Consulting LLP holding the balance stake in the joint venture company.

India’s biggest rail hauler of containers is discussing the possibility of reducing the lowest per voyage rate quoted by Vishwa Samudra Coastal, one of the sources, said.

CONCOR declined to comment.

The 10-year contract involves deploying two coastal ships capable of carrying as much as 700 twenty-foot equivalent units or TEUs with maximum gross weight of 21,000 tonnes (cargo plus container weight).

Vishwa Samudra Coastal will exclusively haul bulk/ break-bulk cargo and loaded and empty containers between Deendayal Port Trust (formerly Kandla Port Trust) in Gujarat and New Mangalore Port Trust, Cochin Port Trust and V O Chidambaranar Port Trust (formerly Tuticorin Port Trust).

The contract includes a revenue share concept for containers/ non-containerised cargo loaded at the originating port (Deendayal Port Trust), which will be applicable only if the contractor deploys higher capacity ships.

The contractor will be permitted to carry other containers in excess of 700 TEUs and/ or bulk/ break-bulk cargo (both domestic as well as export-import containers) after 700 TEUs have been loaded by CONCOR. However, the contractor should do the extra bookings through CONCOR only.

Domestic container traffic movement shall be done according to the CONCOR tariff, while the contractor will be free to fix the tariff for non-containerised cargo and EXIM containers with the approval of CONCOR.

The sea voyage revenue (total revenue minus port handling charges and other cargo related charges) earned by carrying cargo/ containers in excess of the 700 TEUs capacity will be shared in the ratio of 10 per cent to CONCOR and 90 per cent to the contractor for domestic containers and 5 per cent to CONCOR and 95 per cent to the contractor for non-containerised cargo and EXIM containers, according to the contract terms.

However, if less than 700 TEUs with a gross weight less than 21,000 tonnes is loaded by CONCOR, then the revenue share arrangement will be subject to certain conditions.

Any container or break-bulk cargo loaded en-route, that is, at New Mangalore to Cochin/ Tuticorin or from Cochin to Tuticorin and in the return direction (from Mangalore/ Cochin/ Tuticorin to Kandla) by CONCOR/ contractor in the same vessel (either vessel of 21,000 tonnes gross weight carrying capacity or of higher capacity) will also be eligible for the revenue share subject to certain conditions.