India’s state-owned Shipping Corporation of India (SCI) is looking to start a container route to Myanmar within a month if New Delhi is willing to fork out around $5m (INR300 million) a year to help run this loss-making route.
Currently, there are no liner services between India and Myanmar, which forces ships to run between the two countries only when full cargo is available. Liner service is time-table based, which means ships have to run even if there isn’t enough cargo.
SCI, which operates and manages vessels that services both national and international lines, is answerable to shareholders for starting a loss-making service, particularly at a time when the company is already incurring losses. In the first half of the current fiscal year 2013-14, SCI recorded a loss of $35.6 million (INR 2.2 billion).
SCI proposed to run the direct service as a part of India’s efforts to increase trade with Myanmar as the former jostles with China to exert its economic influence in the recently-opened Southeast Asian nation.
According to experts’ estimates India-Myanmar trade has the potential to reach $8.9 billion by 2015, a five-fold increase from $1.87 billion in 2012.
SCI aims to run a ship with capacity to carry 1,500 twenty feet equivalent unit (TEU) containers every fortnight, Indian media reported. The ports of call will be Yangon (Myanmar), Chennai (India) and Colombo (Sri Lanka).
Such regular calls will create a capacity to carry 36,000 TEU containers each way in one year. Container traffic handled by three ports in Myanmar is about 0.8 million TEU, according to estimates.