India: Gangavaram Port declares ‘Force Majeure’

Coalmint has received an update from its reliable sources that the Gangavaram port, located in Vishkhapatnam, Andhra Pradesh has declared ‘Force Majeure’ event amid the COVID-19 pandemic that has erupted in 192 countries worldwide.

Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and restrict participants from fulfilling obligations.

The notification says that the deadly Novel Coronavirus Disease (COVID-19) is a “Pandemic” (World Wide Epidemic) and is completely beyond GPL (Gangavaram Port) control and constitutes a “Force Majeure” event and we hereby notify you of this “Force Majeure” event because of which GPL’s performance is being affected.

In view of the above, the Gangavaram Port (GPL) operations / performance (including but not limited to unloading, loading and receipt and despatches) will be severely and adversely affected. Therefore, GPL shall not be responsible for any claims whatsoever, arising out of and / or connected to the above Force Majeure event, either directly or indirectly, which without any limitations would include vessel demurrages, inter alia due to Pre-Berthing or any other Delays of whatsoever nature and accordingly the Discharge Rate Guaranteed shall also be not applicable for all vessels to be handled at Gangavaram Port during the Force Majeure period.

Further, at this preliminary stage, as per Government of India and World Health Organization (WHO), it is apprehended that it may take several weeks for Novel Coronavirus Disease (COVID-19) situation to improve. Several countries have declared lockdowns in Asia and Europe, affecting entire supply chains of several critical parts and spares that are critical for imported port equipment. The  “Cessation of Force Majeure” will be notified further in due course based on the orders of the Central and State Governments, as the case may be.

Gangavaram port’s significance in India

GPL is India’s deepest port and provides efficient cargo handling services for a variety of bulk and break bulk cargo groups including Coal, Iron Ore, Fertilizer, Limestone, Bauxite, Raw Sugar, Project Cargo, Alumina, Steel products etc.

India’s monthly coal Import shipment at Gangavaram averages at 1.84 MnT (around 20 vessels) whereas monthly Iron ore export shipment including pellets average at 2 lakh tonne, around 6-7 vessels (including coastal movement). In a month about 7% coal is being imported and 4% Iron ore is exported from Gangavaram port

Vessel status at Gangavaram port:

As per the vessel line-up data maintained with SteelMint research, 2 vessels  are at berthing position and 5 vessels are anchorage position (includes both coal and iron ore). However, 6 vessels that are expected to arrive at Gangavaram port are likely to be diverted to the other ports in the east coast.