Dead ship sank ex-Chennai port chief’s fortune

Dead ship San Giorgio I that was berthed at the Chennai port about two years ago.

G Saravanan
Published : 08 Aug 2009

CHENNAI: Chennai Port Trust’s former chairman K Suresh, whose house was raided by the CBI a few days ago, landed in trouble mainly because he allegedly allowed a ‘dead’ ship San Giorgio, carrying 12,800 cubic metres of expensive teak timber worth over Rs 10 crore, to dock in the harbour, causing a loss or Rs 20 crore to the port.


The ship was carrying the cargo, belonging to Singapore-based Olam International Limited, from the Port of Overndo in West Africa to the Tuticorin port, was actually towed into the port as its engine had developed a snag mid-way. With the Tuticorin port refusing permission for the ship to berth, it was towed into the Chennai port and berthed at WQ1 bay on April, 17 and the unloading of the cargo was completed on May 5.

It was in letting the ship in that every written rule was flouted, a clearing and forwarding agent explained. The decision to allow a ship to berth has to be taken at the daily berth meetings, chaired by top port officials, but the name of the San Giorgio never figured in any of the meetings in April 2007, the agent said.

“Besides, every ship entering the port has to be guided by pilot and moving tugs. It was not followed in San Georgio’s case,” the agent added. The dead ship was allowed to berth after Olam International Limited gave an undertaking to pay full vessel related charges and vacation of the berth soon after completion of unloading. The cargo owner also executed an indemnity bond for a sum of Rs 35 lakh.

But when the cargo owner failed to pay, delivery of cargo was suspended on May 5, though 621 of the total 2865 logs had been removed by the owner from the port.

Though the Major Ports Act empower the port authorities to take drastic steps to collect its dues by even selling the ship, nothing was done about it and the charges were allowed to accumulate to Rs 20 crore. The Port management did not take any concrete decision even when a Bangaladesh-based company was prepared to buy the ship for a good price.

Prior to that, the ship had a tumultous journey after it sailed on July 15, 2006 from the Port of Overndo. It was expected to deliver the cargo at Tuticorin in 30 days but the ship’s original owners Sandele Navigation Corporation sold the vessel to Exclusive Marine Inc midway and when the engine stopped functioning neither of the companies made efforts to repair it.

So, the cargo owners towed it to Port Victoria at Seychelles, where a dispute broke out between the crew and the ship owners, who also got into a legal tangle with the financier bank, who obtained an order of attachment of the vessel in the Supreme Court of Seychelles.

But Olam International filed intervening application in the court of Seychelles and towed the ship to Tuticorin and then to Chennai. The ship is still in the Chennai Port.