The foam and fraud of SSCP’s nautical falsehood — II

The foam and fraud of SSCP’s nautical falsehood — II

V Sundaram | Fri, 26 Oct, 2007 , 04:43 PM . Here is Captain Balakrishnan’s remark able perspective. The Setusamudram Canal Project (SSCP) which assumes 60 per cent revenue from vessels on foreign trade routes is a nautical folly because navigation from Aden to Singapore or from Muscat to Chittagong will result in a saving of between about $ 50k to $ 60k, if a vessel circumnavigates Sri Lanka instead of using the proposed SSCP passage. One has to add to this the nightmare of salvage operations of a ship if it gets grounded by high waves in the mid-ocean SSCP passage. In Suez Canal and Panama Canal which are land-based canals, effective salvage operational procedures are in place. No mariner will risk his vessel through the Sethusamudram channel without any salvage facilities in place. My endeavour to speak to—if not teach—the public enemies (not criminals) connected with SSCP, can be put in the form of a poem ‘Practical Work’ by Erich Fried: “To teach the stammerers to speak I learned to stammer as fluently as one of themselves” As a known public-spirited stammerer on SSCP, let me present the Cost-Benefit Analysis of foreign vessels deciding to take the grave financial risk (apart from physical risk!) of going through the Sham Shady Callous Project (SSCP) done by Capt. Balakrishnan with tremendous scientific and mathematical precision which stand any scrutiny by any Court of Law in the world. I am using the exact and irreplaceable words of Capt Balakrishnan: 1. The official project paper of the SSCP states that the estimated investment of Rs 2400 crores will “earn an operating profit from its very FIRST YEAR of operation and that the capital will be recovered with 9% interest WITHIN THE FIRST 25 YEARS after which THERE WILL BE A MAMMOTH PROFIT GENERATION in the next 25 years”. However, according to reports appearing in sections of the media, the cost of the Project has already escalated to Rs 4000 crores, and the shipping channel is nowhere near completion!! 2. The Detailed Project Report (DPR) admits that given the existing fleet in the world, and the vessels under order, ‘the future trend is for larger size vessels’. However, it analyses details of worldwide container vessels fleet in the Clarkson’s Register (figures for April 2002) and says there has also been an annual increase of about 5 per cent in the number of vessels of size up to 30,000 DWT. Also, it optimistically posits a theory that there can actually be a growth in the number of ships built specifically for the purpose of passing through the Sethu canal (pseudo-secular anti-Hindu and anti-Sri Rama optimism). 3. However, the DPR does not appear to have taken into consideration a U.S. programme known as “Container Security Initiative” (CSI), in the post 9/11 period. In the words of Vice Admiral (retd.) A.K. Singh, former Flag Officer, Commanding–in– Chief, Eastern Naval Command as also the former DG Coast Guard, “The CSI compliant & efficient deep water port of Colombo is in close proximity to Tuticorin, and, almost in the direct route for West/ East bound international shipping . Since India has no CSI compliant port yet ( JNPT has been earmarked, but is not ready/cleared yet), we lose a lot of money in sending our USA bound seaborne containers to CSI compliant Colombo & Dubai ports.” CSI requires the stationing of five U.S. Customs officials in our ports from where containers are shipped to the USA. Given the realities of the current Indian scenario, main line container vessels will not call at our ports. 4. However the major revenue earner for the SSCP will be the ships that navigate through the channel. The DPR anticipates a major portion of this earning to accrue from foreign trade vessels. 5. This note analyses the cost benefits that accrue to the ships engaged in foreign trade and navigating through the Sethusamudram Channel. ESTIMATE OF SHIPS THAT WILL ANVIGATE THROUGH THE SETHUSAMUDRAM CANAL 6. According to the Consultants for the SSCP, the number of ships that are expected to navigate through the SSC is 3055 in 2008 and 7141 in 2025. 7. In an earlier analysis, it was appreciated that at the most, it may be possible that 1000 vessels would use the SSC annually, though this figure may not be realized, and is nowhere near the projected 3055 vessels in 2008. This is on account of the fact that global shipping trends are towards larger vessels of 60,000 DWT and above, and the SSC being restricted to vessels of 30,000 DWT- 34,000 DWT, with a draught limitation of 10.7 Metres (leading to T R Balu’s planned eternal and perennial dredging till the end of Time!) COST RECOVERY 8. It had earlier been appreciated that the ‘pilotage rates’ that would be charged for every ship availing of the SSC would be RUPEES TWENTY LAKHS AND FORTY THOUSAND (at a very conservative estimate), for the Sethusamudram Corporation to ‘break even’. In U.S. Dollar terms this works out to $ 55,979.64 (at an exchange rate of $ 1 = Rs 39.30 as on 22 October, 2007). 9. Vessels use Heavy Fuel Oil (HFO). The cost of 1 Metric Tonne (MT) of HFO as per prevailing price at Singapore on 19 OCT 2007 = $462/M.T. 10. Voyage – ADEN TO SINGAPORE (Note: Many ocean going vessels use a combination of HFO for the ocean passage, and Motor Diesel Oil (MDO) for maneuvering engines in restricted waters, like the SSCP. The Singapore rate for MDO/MT as on, 19 OCT 2007, was $ 715.00. This would further increase the ‘total voyage costs. For the purposes of this paper, only HFO is being taken as the basis for the calculations.) Based on the above analysis and statistics, Capt. Balakrishnan has made the following deductions: DEDUCTIONS: 14. Voyage – Aden to Singapore around Sri Lanka/via SSCP: It is ‘MORE COST EFFECTIVE’ to CIRCUMNAVIGATE Sri Lanka than routing through the SSC by amounts ranging from $ 61,616.24, TO, $ 60,183.80. 15. In the same manner, following the same method, Capt. Balakrishnan has worked out the cost benefit analysis for the voyage from Muscat to Chittagong around Sri Lanka and via SSCP. He comes to the following conclusion: Voyage – Muscat to Chittagong around Sri Lanka/via SSCP: It is ‘MORE COST EFFECTIVE’ to CIRCUMNAVIGATE Sri Lanka, than routing through the SSC by amounts ranging from $50,943.80, TO, $51,636.84. CONCLUSION 16. The foregoing calculations have clearly highlighted the economic non-viability of the SSCP for ships engaged in foreign trade. The earlier analysis had also brought out the same results for the Indian coastal trade vessels. It is safe to conclude that the SSCP will only lead to a drain of Rs 4000 crores on the public exchequer without any benefit or advantage to the nation. 17. It had earlier been stated that “THE SETHUSAMUDRAM CANAL PROJECT JUST DOES NOT MAKE ‘NAUTICAL SENSE”. 18. It can now be asserted that “THE SETHUSAMUDRAM CANAL PROJECT IS A NAUTICAL FOLLY”. The foam and fraud of this folly can be explained through a poem: SSCP By the sea (Adapted from the Poem of Rimbaud (1854-1891) SSCP! SSCP men!! How they whip it? They whip it fast and loud They who whip men, dredgers, and ships And mass media Whip the foam The foam they hope Will drown the foam of the waves The spray that flew up weightless To the moon Long before the first dreams Of SSCP astronauts The chariot of silver and copper The prow of steel and silver The supersonic plane of Mathematical Formulae And gleaming polished profits They all help to whip it! They all help to whip the foam But the foam is bloody Poisonous soap bubbles Whipped into towering ringlets Out of the water dirty from all the efforts To wash SSCP clean As a Citizen of India, I draw my inspiration for doing my constitutional duty everyday under Article 51-A of the Indian Constitution in a spirit of selfless, dispassionate and detached equanimity, from the great words of Dag Hammarskjold (1905 – 1961): “Mine is the kind of hardy self respect and dignity that does not get diminished or reduced by other peoples’ calculated neglect or contempt or indifference”. (Concluded)