Indian Ports Poised for a Huge Growth

View of Chennai Port from Royapuram bridge.

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By Manoj Gupta
Joint Director (M&C), Press Information Bureau, New Delhi

New Delhi, July 20, 2011 (Washington Bangla Radio / PIB India) India has been an emerging and vibrant economy with a huge market and the potential to grow as the fastest economy of the world.  This economic upsurge is one of the important drivers for the growth of Indian Ports in the years to come.  Coupled with this, the technological changes in shipping sector have triggered the growth in Indian Ports and provided stimulus for cargo handling.

Modernization of Ports

The Indian  major  ports  in  the  recent  past  have made significant strides in modernization and capacity augmentation. Port capacity development was possible mainly due to the various  policy  initiatives   taken  by  the  Government  for  increasing  the  pace  of privatization and formulation of guidelines for fixation of upfront  tariffs. The maritime states also have come up with several policy initiatives and identified  potential locations for development of new outlets.  Thus, the major ports and non-major ports have assumed complementary roles, besides creating healthy competition which in turn enabled the sector to provide cost effective and quality service to the customers.

Growth of Traffic

As per the Maritime Agenda, 2020 issued by the Ministry of Shipping, the traffic at major ports is likely to grow at a  CAGR of 8.03% from 561.09 Million Tonnes in 2009-10 to 1214.82 Million Tonnes by 2019-20, whereas the traffic at non – major ports is expected to grow at a CAGR of 15.96% from the present  level of 288.80 Million Tonnes to 1269.59 Million Tonnes by 2019-20.  Thus, the anticipated traffic at Indian Ports would grow to 2484.41 Million Tonnes by 2019-20 from the present level of 849.89 Million Tonnes  at CAGR of 11.32%.

Major Ports in India is expected to handle a traffic of 1214.82 million tonnes and to handle such magnitude of traffic, Ports have identified schemes which would create a capacity to the tune of 1459.53 million tonnes. It means that capacity at Major Ports by  the year 2020 will surpass traffic by 20%. Major ports would continue to identify schemes/projects during the next decade to achieve the ideal norm of 30% over traffic. Incidentally, the capacity resulting from the ongoing schemes in 2020 has not been considered in  the projections. Even these projects, if advanced, will result in more capacity, thereby fulfilling the ideal objective. In addition to the above, the Central Government plans to commission two more Major Ports, one each on the Andhra Coast & West Coast, which will also entail addition capacity in the Major Port segment.

Future Plans

Having set the tone for the growth path, the Indian major ports and non- major  ports   have  formulated  ambitious  plans  for  development  of  new  outlets, augmentation  of  existing  service  centres,  induction  of  state-of-the-art  cargo  handling equipment and improvement in logistics in order to meet the challenges emanating from the anticipated growth in the trade.  As per these plans, the capacity at 13 major ports is likely to increase to 1459.53 million tonnes by 2020 from the present level  of 616.73 Million Tonnes. The capacity at non-major ports is poised to increase by 2020 to 1660.02 Million Tonnes from the present level of 346.31 Million Tonnes. Thus, the Indian Ports are aiming at a surplus capacity of above 25% over the projected demand. This will enable the ports to  provide berthing facilities on arrival of the ships, thus achieving zero waiting time for the vessels.   The proposed investment during the next ten years is expected to be Rs. 2.77 lakh crore - 1.09 lakh crore for Major Ports and Rs.1.68 lakh crore for non-major ports.

Structural Changes

In addition to capacity augmentation, all the major ports are aiming at bringing structural changes in the administration of the ports to improve organizational effectiveness.  To this end, all the ports are planning towards implementing “landlord port” concept duly limiting their role to maintenance of channels and basic infrastructure leaving the development operation management of terminal and cargo handling facilities to the private sector. The ports are aiming at lean staff by extending information technology to the entire gamut of operations. Thus the Indian Ports are marching forward with a confident note and gearing themselves to meet the anticipated demand from the trade in the years to come.

Public Private Partnerships Mode

Public Private Partnerships will be the preferred mode for the development of port terminals and other commercially viable activities in the  Major Ports.  The standardization of  RFQ,  RFP and MCA and the formulation of guidelines for  fixation of upfront tariffs have served to make the PPP process transparent and to give confidence to the investors. Recently a Private Group has commissioned 12 million tonnes per annum expansion at its Vadinar terminal in Gujarat at a total cost of Rs.1065 crore.  With this Vadinar Port’s capacity has gone up to 58 million tonnes per annum.  Similar efforts ostensibly contribute to capacity expansion of Ports.

A Level Playing Field

In terms of  the  Regulatory  Framework  of  the  Private  Sector  Participation  (PSP)  guidelines (1996), the  ports  were directed to ensure that private investment does not result in creation of private  monopolies  and that private facilities are available to all users on equal and competitive terms.  Accordingly, it was felt that a policy may be formulated for prevention of private monopoly in the Port Sector for ensuring healthy competition amongst the private operators and smooth award of projects for capacity augmentation at the Major Ports.  Under  Section  111  of  the  Major  Port  Trusts  Act,  1963  and  in  consultation  with Chairpersons of all Major Ports as well as stake holders, the following  policy  has been laid down with  effect from 2.8.2010 for preventing private sector monopoly in Major Ports: “If there is only one private terminal/berth operator in a port for a specific cargo, the operator  of  that berth or his associates shall not be allowed to bid for the next terminal/berth for handling the same cargo in the same port”.

While, the Maritime Agenda, 2010 - 20 envisages ambitious programmes to reach 3.12 billion tonnes port capacity within the next decade, a strong monitoring and feedback mechanism is very important to achieve the target.

- PIB Features

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