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Odisha signs VGF agreement with MSC to start containerised cargo through Paradeep Port

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BHUBANESWAR : The Odisha Government has signed an agreement with the Mediterranean Shipping Company (MSC) for Viability Gap Funding (VGF) to encourage containerised cargo export/import shipping through Paradeep Port.

Saswat Mishra, Principal Secretary/MSME Department and Capt. Deepak Tiwari, MD of MSC Agency (India) Pvt. Limited signed the agreement in the presence of Minister Pratap Keshri Deb, Chief Secretary Pradeep Kumar Jena, and a host of other senior officials and stakeholders from the Government of Odisha and the Government of India.

Companies and business entities located in Odisha are doing huge volumes of containerized cargo exports and imports. At present, they are doing this almost entirely through seaports outside Odisha, especially through Kolkata/Haldia and Vizag ports and incurring extra logistics costs which is making their business that much less remunerative. Moreover, by shifting export/import activity to seaports outside Odisha, the State is losing huge opportunities for job creation inside Odisha.

Containerized cargo export/import happening through Pradeep Port will immensely help exporters and importers of Odisha (by way of reducing their logistics costs). It will also lead to the generation of a huge number of direct and indirect employment in Odisha. Moreover, import and export through Pradeep Port will also generate substantial tax revenue for the State Government.

MSC is the world’s largest container shipping company, accounting for about 23% of the Global share. Its feeder ships will come to Paradeep Port twice or thrice a month. The Exim container cargo of Paradeep Port will be connected to Colombo from where MSC will take the cargo to any part of the globe in its mother ships (i.e. larger ships). Once business at Paradeep Port grows, MSC’s feeder ships will come to Paradeep Port more frequently.

If MSC does not get enough business at Paradeep, the Government of Odisha will compensate MSC as per the VGF agreement. MSME Department had floated an advertisement in November’2023 asking for a VGF proposal from shipping companies. Five shipping companies, including MSC, had responded to this advertisement. MSC was selected for the VGF agreement as its VGF requirement was lower than that of the other four companies.

MSC is likely to start its container cargo export/import shipping service from Paradeep Port in March 2024.

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