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Indian Ports |
India’s port sector could predominantly be divided into Major Ports and Non-major Ports. Major ports are ports Governed by an act of Indian Parliament. Rest of the ports in India could be categorized as Non major Ports comprising of private ports, ports owned by state government, captive ports, etc. With the inclusion of Port Blair in June 2010, India now has 13 major ports, along with 176 Non-major Ports.
These ports represent around 90% of country’s international trade by volume and 70% by value. The total traffic handled by all the Indian ports during 2009-10 was around 850 Million Tonnes (mnT), where Non-major Ports accounted for 1/3rd of this overall traffic. Major ports saw an increase of 5.8% in the cargo it handled during 2009-10 vis-à-vis 2.2% growth rate in 2008-09. Similarly, Non-major Ports’ growth rate in seaborne traffic was 35.4% in 2009-10 against 3.3% in 2008-09. In the last week of January, India’s port capacity exceeded 1 Billion Tonnes, with Major Ports representing close to 60% of the capacity share.
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In its bid to make India a developed nation by 2020, the Indian Government has targeted a exports of $ 150 billion by the year 2008-09. To achieve such targets, the government has identified ports, amongst other kinds of infrastructure as critical areas for development. India possesses a geo-strategic location in the Indian Ocean and has a coastline of over 7,500 km. Hence, over 95% by volume and 70% by value of the India’s international trade is carried via sea route.
India has 12 major ports, both on the eastern and western coasts. Additionally, there are about 200 minor ports officially identified by the respective state governments. Eleven port trusts run 12 of the major ports while Ennore Port is a public limited company under the Union government.
All these ports are run by government port trusts, and handle various kinds of cargo like fertilizers, break bulk, coal, iron ore, POL, container cargo etc. JNPT (Jawaharlal Nehru Port Trust) specializes in container cargo handling and over 90% of the cargo it handles is in containerized form. As a result, it also has the highest revenue earned per tonne of cargo of all the major ports.
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The following figure illustrates the Indian port structure.
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Port Regulations |
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Major ports are regulated by the Government of India under the Union List of the Indian Constitution, and are governed by the Indian Ports Act and the Major Port Trust Act. Under the Major Port Trust Act, all administrative and financial matters of each Major Port are overseen by a Board of Trustees appointed by the Government of India. Minor ports are governed by the Indian Concurrent list of the Constitution and are administered under the Indian Ports Act. At the state level, the department in charge of ports or the State Maritime board.
The tariff for major ports is decided by Traffic Authority for Major Port (TAMP), a government body. TAMP has the authority to decide tariffs for all the different kinds of cargo at major ports.
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There are about 185 minor ports in India. However, a few of them are minor only by designation. Mundra, which is a minor port, handles more cargo than some of the so called ‘Major Ports’. Minor ports don’t come under the purview of TAMP, and are free to decide their own tariffs. Still, these tariffs are not market driven in the true sense, because in India, it is not easy for a port user to switch ports, i.e. use a different port for his/her cargo.
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Port Traffic |
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In the past five years, the overall cargo traffic volumes handled by Indian ports grew at a CAGR of 11.4%. During the year 2007-08, the total volume handled was over 720 million tonnes. The commodity traffic volume handled at the 12 major ports has grown from 313.6 million tonnes in 2002-03 to 519.2 million tonnes in 2007-08, growing at a CAGR of 10.6%. The major ports in the country had a share of more than 70% of the total sea borne cargo movement in the country.
Minor ports, despite their nomenclature, have had a significant share of the cargo traffic. In fact, the combined cargo handled by the minor ports in Gujarat is more than 2 times that of any single Major port. |
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Port Efficiency |
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The average turnaround time is the time taken for a ship to dock load/unload its cargo and leave the port. In the case of India’s ports, addition of improved facilities has brought down the time taken to load/unload cargo. However, due to the increase in traffic over the last few years, the waiting time for ships has increased. Still, in many ports the overall effect has been a reduction in the total turnaround time.
While the average output per ship, per berth day has increased on the whole, the percentage of non-working time to total stay at the port has risen considerably in some ports. One such example is Paradip port, where the turnaround time actually increased from 3.5 to 5.5 days on account of increased traffic. |
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The average turnaround time stood at approximately 3.5 days in fiscal 2007, which is amongst the highest among Asian ports which have an average turnaround time for container vessels of approximately 13 hours, and where ports such as Hong Kong have a turnaround average as low as 10 hours. Inefficiency of Indian ports resulted in higher through-port and sea transport costs, making cargo shipped from Indian ports cost-inefficient and non-competitive in international markets. Coupled with this, the long waiting time discouraged large cost efficient vessels and ship liners from touching the Indian ports. Consequently, Indian container cargo had to be transshipped in Colombo, Dubai or Singapore, resulting in additional costs and transit times. |
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Port Investment |
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Port development comes under the purview of the National Maritime Development Program, a government initiative. The NMDP has envisaged the total investments required for development of the port infrastructure from 2005 to 2011-12 to be Rs 558 billion, out of which Rs 345 billion is to be generated via government-private sector partnerships.
Many ports in India have adopted the BOT (Build, Operate and Transfer) model of port development. Due to this, a number of international companies like DP World, Maersk, PSA, etc. have invested in the Indian ports sector. Private sector investments in Indian ports have also increased, with ports like Mundra, Hazira, Paipavav, etc. receiving substantial private sector investment. Of these, the Mundra and Pipavav ports have been particularly successful and have ambitious expansion plans. |
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Stevedoring |
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Stevedoring is the activity of loading/unloading cargo from the ship. It involves operation of specialized lifting and towing equipment, which depends on the nature of cargo. In Indian ports, this job is done mainly by private players. In some ports, the port authority itself does the stevedoring, like in Mundra and Pipavav. The leading players in stevedoring are E.C. Bose & Co., T.P. Roy Chowdhury & Co., Ripley & Co which have the largest market share in ports in the eastern region. Similarly for the western ports, the leading companies are J.M. Baxi, ABC & Sons and DBC. South India Corporation Limited (Sical), Sarat Chatterjee & Co., Pratyusha Associates dominate the southern ports. |
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Value added services |
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As is the trend all over the world, Indian ports are also looking to provide value added services to their customers to ensure long term growth and customer retention. Value added services include Customs facilities, truck maintenance and repair, trailer renting, parking facilities, information centres, offices, hotels, commercial areas, etc.
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Through the development of Special Economic Zones (SEZs) Indian ports are looking to provide value added services to its customers as well as create a demand for captive cargo. Many Indian port operators have acquires Inland Container Depots (ICDs) and are planning to enter the rail container transport services. This vertical integration will help Indian ports to cut costs as well as offer seamless services to customers. |
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Future Outlook |
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So far, the port facilities have been able to keep up with the demand for cargo handling at Indian ports. But, with the growing Indian economy and the resulting increasing in foreign trade, port facilities will have to be increased considerably to meet future demand. The government has foreseen this and has planned projects worth hundreds of billions of rupees, with the private sector participation to provide these facilities. Container trade is strongly linked to a nation’s economy, and this is expected to grow in India. As a result, Mundra port has been converted into a container hub, servicing the Indian northern hinterland. Also, JNPT has already bids to add a 4th container terminal. The project worth $1.1 billion has seen bids from various international parties
Indian ports are expected to handle 876.7 million tonnes of cargo by 2011-12. With such projects in the pipeline, Indian ports hope to achieve increased capacities along with faster turnarounds. The way forward for Indian ports is creation of value added services and vertical integration, i.e. integration of port operators with hinterland transport operators. The major areas of concern for Indian ports today are hinterland connectivity, inland cargo handling and lack of skilled manpower for port operations. These are the grey areas, which will be given more attention and investment in the near term future. |
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