India has got a rich and lengthy coastline of 7,517 km. The ports and logistics infrastructure needs to be overhauled in a big way. Against a share of 9 percent of railways and 6 percent of roads in the GDP the share of ports is only 1 percent. Indian ports presently handle more than 90 percent of India’s total EXIM trade volume. There is lot of scope to increase the share of merchandising trade in GDP. The Government programmes like ‘Make in India’ is likely to increase the share of merchandise to trade in GDP further. Sandeep Sharma takes a look at the Port sector opportunities....
PORT REVIVAL SIGNS
The Government of India initiatives are directed towards achieving port capacity of 3,000 million tonne by 2025 from the current 1400 million tonne. The government has embarked on number of initiatives and programme to develop and expand the capacity of ports across the country. On the capacity addition front at major ports there has been a significant progress and the rising cargo traffic over the last two years confirms the development. Reserve Bank of India in its monetary policy statement had confirmed that several key infrastructure segments such as ports, road and railways indicate an uptick in the economy.
Rising traffic statistics at Indian ports indicates a turnaround. The traffic and port capacity infrastructure data indicates that along with the rise in cargo traffic, the government has already increased the cargo handling capacity at 13 major ports from 800 million tonnes in the year ended March 2014 to 965.3 million tonnes by March 2016. There has been a steady rise in port traffic in the last two years. Out of 13 major ports, 11 have registered a rise in their capacity. Kamarajar Port at Ennore and V.O Chidambaranar Port at Tuticorin are leading the table with addition registered at 45 and 40 per cent, respectively. Total cargo handled by major ports increased from 581.34 million tonnes in 2014-15 to 606.37 million tonne in FY2015-16 registering a growth of 4.3 per cent. The major ports are on the path of recovery and are making attempt to improve their efficiency quotient including the turnaround time. The capacity of the major ports as on March 31 increased to 965 MTPA from 871.52 MTPA in March 2015.
Q1 FACTS & FIGURES
The Major Ports of India witnessed a positive growth of 6.2% in the April-June quarter of 2016 as compared to the same period last year. The cargo traffic handled by India’s Major ports was 159.0 Million Tonne during this period. This is significantly higher than what the Major Ports achieved during the same period last year where the growth was 4.5% and the Major Ports handled total cargo traffic of 149.74 million tonne.
During the first quarter of 2016-17, Mormugao Port recorded the highest growth in traffic (104.5%) mainly due to steep increase in Iron Ore traffic. It increased from 0.2 million tonnes in 2015 to 3.9 million tonnes during the first quarter of 2016. This was followed by Vishakhapatnam (17.1%), Paradip (12.9%), Cochin (9.4%), Kandla (5.7%), V.O Chidambaranar (1.4%) and Kamarajar (0.2%) over the corresponding quarter of 2015-16.
Overall seven Major ports registered positive growth. Major Ports, which showed decline in traffic during the first quarter of 2016 were Haldia Dock Complex (-3.6%), New Manglore Port (-3.6%), Kolkata Dock System (KDS – 2.9%), JNPT (-2.7%), Mumbai Port Trust (-2.1%) and Chennai Port (-19%). Decline in New Manglore Port and Kolkata Port can be attributed to the reduction in traffic of fertilizer, thermal and steam coal, coking and other coal, liquids, Iron ore etc. In JNPT the decline was witnessed in other liquids and slight decrease in container traffic. Similarly, in Chennai Port and Mumbai Port the decline was due to decline in POL, fertilizers, thermal and steam coal.
Sagarmala is the flagship programme of the Ministry of Shipping for promoting port led development in India. The primary objective is to achieve port capacity expansion and modernization, enhance port connectivity to the hinterland, and facilitate port led-industrialisation to promote trade and sustainable development of coastal communities. The programme aims to promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively. The project comprises optimizing the optimizing the use of existing and future transport assets and developing new lines/linkages for transport (including roads, rail, inland waterways and coastal routes), setting up of logistics hubs, and establishment of industries and manufacturing centres to be served by ports in EXIM and domestic trade.
The National Perspective Plan (NPP) prepared under Sagarmala Programme was released in April 2016 by the Prime Minister. More than 150 projects have been identified which will mobilize investment of over Rs. 4 lakh Crore and generate close to 1 Crore new jobs, including 40 lac direct jobs, over a period of 10 years. These projects are expected to generate annual logistics cost savings of close to Rs 35,000 Crore and provide boost to India’s merchandise exports by $110 billion by 2025.
• Port-led industrialization
• Port based urbanization
• Coastal tourism and recreational activities
• Coastal Shipping and Inland Waterways Transportation
• Ship building, ship repair and ship recycling
• Logistics parks, warehousing, maritime zones/services
• Integration with hinterland hubs
• Offshore storage, drilling platforms
• Port Specialization in certain economic activities such as energy, containers, chemicals, coal, agro products, etc.
• Offshore Renewable Energy Projects
• Modernizing the existing ports and development of new ports.
MULTI-MODAL LOGISTICS PARKS
Seven Multi-Modal Logistic Parks (MMLPs) were proposed in Madhya Pradesh, Chhattisgarh, Rajasthan, Odisha, Telangana, Uttarakhand and West Bengal as part of the National Perspective Plan, prepared under the Sagarmala Programme of the Ministry of Shipping, The potential sites identified based on comprehensive study of the container cargo movement across the country are located in the proximity of important industrial clusters. This will be advantageous for the transportation of containerized cargo.
JNPT TO SET UP DRY CARGO PORT AT WARDHA
Jawaharlal Nehru Port Trust (JNPT) is India's largest container handling terminal with one port owned, another DP World operated and third APM operated terminal. The fourth container terminal is being built. As on March 31, 2016, the port handled 4.45 million twenty-foot equivalent unit (TEU) of container cargo registering a total income growth of nearly 10%. JNPT plans to set up dry port at Jalna and Wardha in the state of Maharashtra. The port trust has acquired 457.42 acre of land in Jalna and is on the verge of finalising a strategic partner for this project. The port is in the process of acquiring 350 acre of land at Wardha.
In order to promote coastal shipping, JNPT plans to build a dedicated berth for coastal cargo in coming months and looks forward to invest Rs 200-250 crore for this project. The locations for coastal berth have already been identified and the contract is likely to be awarded in the next six months.
CHENNAI PORT TO INVEST RS 1500 CRORE
Chennai Port Trust plans to invest Rs 1,500 crore over the next five years . The investment aims to strengthen its capacity and mostly would be in Public-Private-Partnership (PPP) mode. The major expansion plans include a coastal terminal, barge handling facility, coal handling facility and construction of an EXIM godown.
NEW PORT PROPOSED AT BETUL
The Government of India plans to setup a new minor port at Betul in South Goa. The new port would function as a satellite port for Mormugao Port. The project will be a joint venture between the Centre and Goa Government.
MUMBAI PORT GEARS UP FOR LAND DEVELOPMENT
Mumbai Port Trust (MPT) plans to appoint project management and implementation consultant for preparing a master plan for developing its land. About 1,000 acre of non-contiguous land is available for development.
VOC TO DEVELOP TWO BERTHS
VO Chidambaranar Port Trust in Tuticorin has planned to develop two berths at a cost of Rs 1,074 crore for container and coal handling under Pubic-Private-Partnership (PPP) mode.
PARADEEP PORT TO INVEST RS 50,000 CRORE
Paradeep port plans an investment of Rs 50,000 crore in the next five years. The investment would be taken up in port-road and rail connectivity projects. The draft of the port is being raised to 18 metre to accommodate huge vessels of 200,000 dwt (dead weight tonnage). The contracts worth Rs 2600 crore for various port related works is already awarded. The port capacity will be increased three-fold to 325 million tonne per annum (mtpa) by 2025. A new port is also proposed to come up at Paradeep with an estimated investment of Rs 8200 crore.
WB GOVT PLANS TO SET UP NEW DEEP SEA PORT
The Government of West Bengal plans to set up a new minor deep sea port at Tajpur-Shankarpur in East Midnapore district. The estimated cost of this project would be Rs 4,231 crore.
DPCL TO DEVELOP NEW BERTHS
As part of its phase-II expansion plan, the Dhamra Port Company Ltd (DPCL) is developing a coal berth and another multipurpose berth. The project is estimated to cost Rs 1,500 crore. The coal berth is likely to get partial commissioning by October, 2016.
PORT SECTOR PROJECTS IN PPP MODE
As per the Indian Ports Association, the following 34 Port sector projects to the tune of Rs 32028.59 crore in PPP mode are under implementation as on 31st Jan, 2016.