Page 395 - SSB Interview: The Complete Guide, Second Edition

Other Arguments

Safety, a requirement of constant dredging, questions arising on its suitability

for heavy ships, time spent due to slow speed that would be necessary for
passage in the canal and cost aspects were some of the arguments put forth by

Captain (retired) H Balakrishnan of the Indian Navy, about the project in an
interview to Shobha Warrier of Rediff. In the case of the Suez and the
Panama canals, ships save thousands of nautical miles in sailing distance and

hundreds of hours in sailing time. The difference with the Sethusamudram
project is that the ships will probably save a few hundred miles and at the
most, two days in sailing time.

Issues to be resolved

Economic
Some naval hydrographers and experts suggest that the project is unlikely to

be financially viable or serve ships in any significant way. The savings for
ships that originate from Kanyakumari or Tuticorin is between 10 and 30
hours. For ships from other destinations like the Middle East, Africa,

Mauritius and Europe, the average saving by using this canal is just eight
hours.

At the present tariff rates, ships from Africa and Europe will lose $4,992 on

every voyage, as the savings in time for these ships are considerably lower
than what is calculated in the DPR. This loss is insignificant as 65% of the
projected users of the canal are those from Africa and Europe. If tariffs are

lowered to a point where ships from Africa and Europe will not lose any
money from using the canal, the IRR of the project falls to 2.6%. This is a
level at which even public infrastructure projects are rejected by the

government.

The depth envisaged for this canal is designed for ships with a weight of
30,000 tonnes and less. Most of the new generation ships (with weight more

than 60,000 tonnes and tankers with weight above 1,50,000 tonnes) cannot
make use of this canal.