Industry News

Non-major ports such as Karaikal and Krishnapatnam, that come under the purview of the State governments, handled over one-third of the country's total maritime freight traffic during 2010-11. However, there was a sharp decline in the growth rate during the year, compared to the previous year.

The growth in cargo handled by non-major ports in 2010-11 was at 8.8 per cent, against a record 35.7 per cent increase in 2009-10 over the previous year. The sharp deceleration in overall growth in India's seaborne cargo traffic in 2010-11 reflected the trends in the economy.

According to Mr K. Ravichandran, Senior Vice-President, ICRA, "the slowdown in non-major ports' growth in 2010-11 can be primarily attributed to the high base effect as growth was very high in the previous fiscal.

That apart, the outlook for cargo growth remains favourable in the near to medium term, which is not expected to be negatively impacted by global slowdown fears, as many of them are focused on domestic commodities such as coal, crude oil and fertilisers. Although container trade might be impacted if the Eurozone crisis were to escalate, overall it should end with healthy growth.

As regards major ports, uncertainty on iron ore exports due to various regulatory issues is a concern; this could mute their cargo growth. Besides, this fiscal should see lower fertiliser raw materials and finished fertilisers because of certain industry-specific reasons," he said.

Growing importance
Says Mr Shashank Kulkarni, Secretary-General of the Indian Private Ports & Terminals Association, which represents the private ports, the y-o-y cargo growth at major ports during 2010-11 was a mere 1.6 per cent, compared with the previous years' levels, which averaged 8-10 per cent. Even 2009-10 recorded a 6 per cent increase over 2008-09. The trend is, therefore, more or less likely to get reflected at the non-major ports as well.

The really operational non-major ports are a handful. While AMCT/MICT and GPPL primarily handle containers, the ports in South India — Karaikal and Krishnapatnam — are bulk-oriented and have just commenced container operations as well. Container traffic is expected to grow, as predicted, but the bulk traffic, especially coal and iron ore, has taken a hit — coal (imports) because of floods in the supplying nations and iron ore (exports) because of the new restrictive policy.

During 2010-11, the country's eleven major ports, which come under the purview of the Centre, along with non-major ports, handled a total cargo throughput of 884.6 million tonnes. This is a modest increase of 4 per cent over 2010-11, compared to the robust growth spurt of 14.3 per cent in 2009-10, says an update on the port sector compiled by the Shipping Ministry's research wing.

A glimpse of the commodity profile of the cargo handled reflects that Gujarat accounted for about three-fourths (73.4 per cent) of the total traffic handled by the non-major ports, followed by Andhra Pradesh (13.5 per cent), Maharashtra (4.7 per cent) and Goa (4.6 per cent).

Four maritime States - Gujarat, Andhra Pradesh, Goa and Maharashtra — together accounted for 96 per cent of the total cargo traffic handled by the non-major ports in 2010-11.

Maritime agenda
Despite the dip in growth rate, the future could still be bright for the non-major ports, given that the Maritime Agenda 2010-20 has set a target of 3,130 MT port capacity for 2020. Over 50 per cent of this capacity is to be created in the non-major ports, which are expected to play a key role by the year 2020. The traffic handled by these non-major ports is expected to increase to 1,280 MT. The total proposed investment in Major and Non-Major Ports by 2020 is expected to be around Rs 2,96,000 crore, with most of this investment coming from the private sector.

The States have also identified projects for development of non-major ports at an estimated cost of Rs 1,67,931 crore that would enable the creation of additional capacity of 1,294 MT. It is envisaged that the private sector will fund most of the projects Research predicts that that private sector will meet 96.1 per cent of the cost of development, amounting to Rs 1,61,333 crore. The remaining requirement of Rs 3,678 crore is planned to be contributed by the State Governments.

High growth
A report by ICRA says cargo volumes in India are expected to breach the 1-billion-tonne mark in the current fiscal (2011-12); the 2-billion-tonne mark by 2016-17 (seven-year CAGR of 13 per cent); and touch 2.4 billion tonnes by 2019-20 (10-year CAGR of 11 per cent). Growth at the non-major ports is expected to outpace that at the major ports, with the former commanding a 51 per cent share of the total cargo in a decade's time.

By composition, coal (expected 10-year CAGR of 18 per cent) and containers (expected 10-year CAGR of 15 per cent) are expected to drive much of the growth. Thus, port ventures with a higher exposure to these cargo categories are favourably placed.

Supply-side constraints persist with progress being tardy on proposed developments at major and non-major ports: On the supply side, the port sector has seen certain major milestones being reached in the recent past, including commissioning of the first phase of operations at the International Container Transhipment Terminal, Vallarpadam; solid cargo port terminal, Dahej; coal terminal, Mundra; bulk terminal, Hazira, and a greenfield port at Dhamra.

Source Link

After the 1819 earthquake flattened the Lakhpat port in Kutch, the then British Raj shifted its west coast operations to Karachi, and developed it into a major port in the Indian sub-continent. It was then believed that no other permanent port would be set up in Gujarat due to its seismic sensitivity. However, post-1947, Gujarat has seen the emergence of Kandla as a major port on the west coast, off the Gulf of Kutch.

Steps are now under way to develop a mammoth logistics park to take advantage of the proposed Delhi-Mumbai Industrial Corridor, where 40 per cent of the main artery will pass through Gujarat.

Kandla
Kandla port has recently invited expressions of interest for the logistics park, says Mr M.A. Bhaskarachar, Deputy Chairman. According to him, the detailed planning for the new project will soon be carried out. Kandla port is also investing Rs 1,848 crore to expand capacities. In the 1990s, when the Centre had kicked off economic reforms and invited the private sector to play a larger role in the growth process, the Adani Group set up the Mundra port in Kutch district, next to Kandla.

Mundra
Today, Mundra and SEZ Ltd has emerged the country's top private multi-port operator. Early this month, it handled a record 1,11,699 tonnes of steam coal in just 24 hours, which was an India-best performance till date. The company's coal import terminal at Dahej, in Bharuch district, has also been connected by railways, a move that will help reduce logistics costs for transporting coal to the region and the rest of India.

Coal Handling
Mundra port's West Basin terminal, Asia's largest coal import facility, surpassed Krishnapattinam port's national record of best coal discharge performance of 1,06,171 tonnes in July 2011 and improved its own record of 95,000 tonnes in June 2011. These capacities are being expanded, said Dr Malay Mahadevia, Whole-Time Director, MPSEZL, recently. In November, Mundra Port also delivered a record 62,718 tonnes of coal on a single day to Adani Power.

The port will import coal for Tata Power's 4,000 MW power plant that is nearing completion. Together, Adani Power and Tata Power have a capacity of 8,620 MW and will require an import of three million tonnes of coal annually in the near future. Clearly, these two major ports, Kandla and Mundra, are among the leading change-agents in the economy.

Gujarat Maritime Board
But these are not the only players in Gujarat, as far as ports are concerned. Pipavav is also emerging as the third major force. The Gujarat Maritime Board (GMB), the ports regulator, had identified 48 ports.

In 2010-11, the State's ports handled 231 million tonnes of cargo, which was nearly 80 per cent of all cargo handled by minor ports in India. At present, GMB operates 14 ports in Gujarat and proposes to operate five more in the near future.

GMB came into existence in 1981 and the State Government now has a policy for port-led development across the 1,600-km coastline.

This is triggering a wave of development on this stretch where major infrastructure projects, including power plants, are in the pipeline across Gujarat.

Source Link

MUMBAI (Dow Jones) - India's shipping industry should speed up the expansion of its ports, increase dredging facilities and invest in coastal shipping, the country's prime minister Manmohan Singh said Saturday.

"We need to accelerate the pace of expansion of the port sector, especially through public/private partnerships," Singh said at an event. "We also need to improve the draught in our ports by increasing the pace of dredging," he added.

Despite carrying out the majority of export-import trade across its coastlines, India's total tonnage accounts for only 1.1% of the global cargo carried. India's current tonnage at ports is about 850 million tons, which is expected to grow to about 2.49 billion tons by 2020.

Singh also said the country needs to urgently deal with growing instances of piracy across coastlines. The increase of sea piracy in the last few months beyond the usual area in the Gulf of Aden, has put increasing number of vessels at risk and increased insurance costs for trading seafarers.

"Our navy, coast guard and shipping companies are putting up a concerted effort in close coordination with other international agencies to deal with the menace," said Singh.

-By Anirban Chowdhury, Dow Jones Newswires

Source Link

DNA India reports that, in a major push to port infrastructure, the Gujarat government has finalised plans to develop six to seven new ports in the state. Large investments would flow into the port sector in the coming years, a senior government official said.

DNA India said the state government is planning ports at Dahej, Nargol, Vansi Borsi and Kutchhigarh, and works related to the project are at different stages. Adani Group is already developing a solid cargo port at Hazira.

The government has also identified Dholera and Khambhat as prospective sites for developing ports, but the plans have been put on hold temporarily in view of the Kalpasar project.

"The port projects will be developed under the public private partnership model. The state government is also planning other ports, but they are still at the preliminary stage," BK Sinha, additional chief secretary, ports and transport department, said.

At an average investment of Rs800 crore to Rs1,000 crore, officials expect that these six -seven port projects alone will attract investment of Rs5,500 crore to Rs7,000 crore innext 2-3 years.

Sinha said that the ports would enable the state government to make maximum use of the state's 1,600-km long coastline, which is ideal to facilitate movement of goods.

"Gujarat is strategically positioned to act as the hub of coastal trade. Already, minor ports in Gujarat account for 76 per cent of the total cargo handled in the country. This is expected to rise further with development of more ports," Sinha said.

According to officials, the major ports in the state account for more than one-third of the total cargo handled at ports in the whole of India.

Source Link

India Ports Global (IPG), a special purpose vehicle proposed by the government for foreign port acquisitions, has promised to take India's trade ambitions global. The company, which will raise funds from major ports and through tax-free bonds primarily, is expected to invest in ports in international markets.

As Indian companies continue to establish their production facilities abroad, getting the logistics chain in place is extremely important. IPG seems to have derived inspiration from two successful port companies in Asia - Dubai Port World and Port of Singapore Authority, from Dubai and Singapore respectively. Both have built their expertise on container terminals on their home turf before heading to foreign shores. Unlike them, IPG is going to be a new company, which will scout for lucrative overseas investment opportunities. But are there viable investment options available for IPG?

The world of container terminals is governed by a few ogilopolists. The situation in India is not different either, despite initiating stringent anti-monopoly strategies. India’s experience in container terminals is limited to a few players, such as JNPT-owned Jawaharlal Nehru Port Container Terminal, Adani-owned Mundra Port, and Vishakha Container Terminal (with majority stake held by Krishna Kotak of Mumbai-based United Liner Agencies). It may be suicidal to step into container terminal business abroad without having adequate expertise on this highly-competitive business.

Instead of mounting a bidding war on the existing ports, IPG should join hands with India Inc to set up bulk port facilities abroad. Several private companies are either setting up or in talks with foreign governments to set up facilities to ensure seamless export/import of raw materials or produced goods. IPG can lend a helping hand to them.

Tatas, Essar, Adani, JSW and Jindal Steel are among a host of Indian companies that have already ventured into foreign shores to set up ports. Last year, Adani Enterprises' Indonesian subsidiary PT Adani Global entered into a binding tripartite agreement for setting up a dedicated 'rail and port project' with the regional government of Sumatra Selatan in Indonesia, and PT Bukit Asam, a coal mining company owned by Indonesian government. Another group company Mundra Port and Special Economic Zone acquired Abbot Point Port in Australia for A$1.8 billion (around Rs 9,000 crore) in May this year. The port has two mechanised berths and MPSEZ aims to build another two in next five years, and wants to expand the existing capacity of 50 million tonne (MT) to 80 MT. This will help import of coal from Linc Energy’s coal mines in Queensland that Adani bought in another $2.7 billion deal last year.

Similarly, India Inc’s another destination is Africa. As India scouts for coal, iron ore and oil in the mineral-rich Africa, Essar Ports, a part of Ruias-owned Essar Group, has proposed to develop a bulk port in Mozambique to cash in on the export of ore/coal from the continent. Ruias, who are building steel and mining assets in East Africa, want to explore huge potential of East Asian exports. Among others, Tata group and NTPC have already begun operations in East Asia.

If IPG could establish perfect logistics - both port and rail facilities - abroad to support growing trades of coal, ore and crude oil to India, we can be rest assured of a seamless supply of raw materials and finished goods to India.

Source Link

Dredging is a dirty word ever since the spectacular failure of India's Sethusa-mudram ship channel project on the east coast. After spending crores of rupees, the project hailed as India's Suez Canal, was almost abandoned mid-way. But deepening of shipping channels and berths at various ports continues to be a multi-billion dollar business in India. The sector is growing fast as India, one of the world’s fastest growing economies readies itself to handle more cargo and in the process looks to improve port infrastructure. The government has proposed to triple its port capacity to 3.2 billion tonne by 2020 and this provides huge potential for dredging companies in India. The government’s maritime agenda for 2010-2020 has envisaged that all major ports will be a minimum draught (depth) of 14 metre and all hub ports at 17 metre, so that ports can handle bigger ships.

A mega dredging project that is waiting to be finalised now is the Mumbai-JNPT channel deepening project. The plan is to deepen the channel from the current 11 metre to 14 metre in phase l, at around Rs 1,500 crore. Once dredged, the channel can accommodate bigger ships - to be precise, fully-laden ships carrying 6,000 containers aboard. JNPT wants to deepen the channel further to 17 metres in the second phase, in order to attract mother ships carrying more than 10,000 containers. It is important for ports to achieve economies of scale - for them to survive the tough competition and for the country, to achieve faster cargo handling.

All international giants - Van Oord, Jan De Nul, Royal Boskalis and Dredging International, part of the big four club - are active in India. These European companies compete with local peers for port contracts. The government-owned Dredging Corporation of India (DCI) is yet to recover from the Sethusamudram fiasco. Though they have managed to win regular port contracts, their service record continues to be abysmal. Several small local companies forayed into the sector attracted by the flash of money, but only a few have survived the vagaries of the cyclical shipping sector. Mercator, Meka Dredging, Jaisu Shipping, Ocean Sparkle and Dharti Dredging are among the leading domestic players today trying to encash the boom in dredging market.

The two recent joint ventures formed by Hyderabad-based Indu Projects with Great Lakes Dredge and Dock Company (GLDD) and the government-owned BEML with Vosta LMG are likely to breath fresh life into the local dredging market.

However, the dredging sector has continued to be non-transparent for some reasons. There is cut-throat competition in the market, and local companies are at the losing end. It is important to have home-grown dredging giants. The sector is vital for the growth of India’s foreign trade and hence, the government needs to take a serious look at the sector, and should extend some financial support.

Funding from financial institutions is hard to come by as they look for long-term projects. Most projects in India are usually short-term, having a few months' duration. Also, the vessel-related charges levied by ports are pretty high in India, primarily because of dredging costs. Subsidising dredging projects by the government, which is common in developed countries, will help ports reduce their vessel charges.

A new dredging policy can help establish a transparent bidding system in India.

Source Link

The Prime Minister's Office (PMO) of India has established a new committee to expedite security clearance of around a dozen port projects in the country, including projects at Kandla Port and Mumbai Harbour.

The new committee will be headed by Cabinet Secretary AK Seth. Reports suggest that the new initiative is an effort by the United Progressive Alliance (UPA), India's ruling political coalition, to cut bureaucracy and "policy paralysis". Previously, a committee chaired by India's defence secretary was tasked with granting security clearances.

The Cabinet Secretariat has reportedly asked the Shipping Ministry to send its agenda for the first meeting of the new committee. "We will submit the pending proposals so that necessary clearances are obtained. Once we have it, the process of tendering can be expedited," said a senior official told the Times of India.

The new accelerated process will apply to around a dozen port projects such as the new bulk terminal in Kandla, in which R1,060 crore ($203,611,00) is being invested; as well as the Mumbai Harbour Channel at Jawaharlal Nehru Port Trust (JNPT), which is worth R1,360 crore ($261,237,000).

Also awaiting the committee's approval is the development of north cargo berths (NCB) at Tuticorin Port; a single-point mooring terminal at Kandla and the conversion of eighth berth as container terminal at Tuticorin Port.

This financial year the Ministry had aimed to approve a target of 23 major public-private partnership (PPP) port development projects. To date, only one such project has been approved: a consortium of Port of Singapore Authority (PSA) and ABG Ports was awarded the contract for the construction of a fourth terminal at JNPT, in which R6,700 crore ($1,286,977,000) will be invested.

Source Link

The state of the art Mundra International Container Terminal operated by DP World last week, witnessed the berthing of the largest ever container vessel to call any port in India. The APL Italy has a length of 334 meters and with a carrying capacity of 8402 TEU is also the largest APL Vessel to call in India.

Mr. Anil Singh senior VP & MD of DP World Subcontinent said that "Pushing boundaries and challenging the status quo is what sets us apart from our competitors. APL's decision to bring the APL Italy to MICT reflects the growing faith of global shipping lines in the potential of the infrastructure we have built at Mundra port"

Speaking on the occasion, Mr Ramji Krishnan CEO of MICT said "This is an important milestone for us in MICT, and endorses our capability to handle the largest mainline containervessels with the highest productivity standards."

As one of the most sophisticated and technically advanced port facilities in the Indian Subcontinent, strategically located at Mundra port in the State of Gujarat, MICT is the closest gateway to the largest cargo generating regions of North and Northwest India. Open all year round with no tidal restrictions, MICT has an ability to handle some of the deepest container vessels afloat today.

From its inception in 2003 MICT has had alternative thinking as part of every aspect of its business. The result speaks clearly through the volume it handles today, and the confidence it has built up within the trade community. From handling 20,000 TEUs in its first year of operations, today MICT has developed the port into a million TEU port.

Driving this customer acceptance is MICT's emphasis on enabling the faster turnaround of vessels by increasing operational efficiency. MICT has today emerged as India's most promising receiving nearly 70 vessels each month including 14 mainline services. MICT has invested in advanced port management IT systems and state of the art equipment which are at par with the best in the world.

Source Link

The Minister of Shipping, G.K. Vasan informed the Rajya Sabha that the Government of India has identified 23 projects for award during 2011-12 to increase the capacity of major ports by 236.63 MTPA (Million Tons Per Annum) with an estimated investment of Rs. 16743.92 crores under Public Private Partnership (PPP) mode. The existing port capacity of Major Ports as on 31.3.2011 is 670.13 Million Tonnes (MT).

The Minister further stated that the Government of India has given top priority to the modernization of ports through various expansion/upgradation projects for berths, construction of new berths/terminals, installation of new and modern equipment, upgradation/replacement through higher capacity of cargo handling equipments, mechanization of cargo handling operations, deepening of channels/berths etc. along with schemes for quicker evacuation of cargo through road and rail connectivity.

Under National Maritime Development Programme (NMDP), 276 projects have been identified for mechanization and 69 have been completed.

Source Link

The Kandla Port Trust (KPT) has been selected for the 'Major Port of the Year Award' for the second consecutive year.

The prestigious Samudra Manthan Award is organised jointly by the Bhandarkar Shipping Events and the State Bank of India. The 14 Samudra Manthan Awards draws a parallel from the 14 Ratnas of the Samudra Manthan depicted in the Indian mythology, KPT said in a statement here on Saturday.

The final nominees for the award were the Jawaharlal Nehru Port Trust and the Kandla Port Trust, said Mr P. D. Vaghela, the KPT Chairman, who received the trophy in Mumbai recently.

The awards were chosen by a jury headed by Mr Dinesh Lal, Chairman, Award Jury Group, and Director-India, A.P. Moller Maersk.

The Kandla Port created history by handling 81.88 million tonne of cargo in 2010-11.

Source Link

Diversified Adani Group venture and India's largest private port operator Mundra Port and Special Economic Zone (MPSEZ) handled 1,11,699 metric tonne of steam coal in 24 hours.

The company is claiming that it India's best performance till date.

The Mundra port's West Basin terminal, Asia's largest coal import facility, surpassed Krishnapattinam Port's national record of best coal discharge performance of 106,171 MT in July 2011 and improved its own record of 95,000 MT in June 2011, read the media statement issued by the company on Monday. The West Basin terminal has a capacity of 1.6 MT per day, which is being expanded to 3.2 MT per day.

Source Link

Mr GK Vasan union minister of shipping informed the Lok Sabha that a proposal has been received from Shipping Corporation of India seeking policy measures for cargo support and reservation for Indian flag vessels in India's Export-Import trade.

The main features of the proposal are as under:

1. Reservation of 33.33% of India's seaborne EXIM cargoes for Indian flag vessels only.

2. Long term charters of 5 to 7 years to be given to Indian flag companies in respect of crude oil, petroleum products and gas (in case of LNG charter period to be 20-25 years), thermal coal, coking coal, fertilizer, iron ore.

The major industrialized economies such as Japan, China, South Korea, and USA have followed a proactive policy of cargo reservation for national flag vessels for carriage of all national cargoes for strengthening their national tonnage.

The Government have introduced tonnage tax regime for shipping sector in 2004. Indian shipping industry has been provided cargo support through right of first refusal and policy of FOB (free on Board) import is being followed for government owned/controlled cargoes. Further, chartering of vessels for movement of cargo on private account is regulated through the Directorate General of Shipping taking into consideration the availability of Indian flag vessels. These measures are likely to be continued to support Indian shipping Industry.

Source Link

Twenty-four committees and study groups since independence haven’t been able to lift coastal shipping in India. Advocates of the trade are hoping the 25th-a sub-group on coastal shipping for the 12th Plan period that begins in April-will succeed.

Coastal shipping and cargo transportation by rivers are cheaper and less-polluting than transportation by road and rail networks. But India carries only 7% of its total cargo by domestic shipping, according to maritime consultant Hauer Associates. This, as a result, forces consumers to pay more for goods and creates external costs to society in terms of pollution, accidents and road and rail congestion, say shipping industry experts. The US carries 16% of its total cargo by domestic shipping, and the European Union, 46%.

Coastal or domestic shipping is the movement of cargo by sea, river, canal or stream between sea and inland ports and terminals in India. Cargo transportation through rivers is known as inland water transport.

"I attended (my) first seminar on coastal shipping in 1985. Since then, very negligible things (have) happened in the sector," said Avinash Batra, chairman at Seahorse Ship Agencies Pvt. Ltd, a shipping transportation company. "The government should take the lead rather than private companies investing."

Experts talk about the benefits of coastal shipping and what the government can do to encourage it. A representative of a shipping company, requesting anonymity, said private companies are unlikely to invest in domestic shipping unless the government sets up the basic infrastructure or offers incentives for coastal shipping and inland water transportation. The government's priority, however, is road transportation, considering the demand, said B.K. Chaturvedi, member, Planning Commission, the country's apex planning body.

He was in Mumbai for a seminar organized by the Bombay Chamber of Commerce and Industry, a lobby group.

Source Link

The shipping ministry has written to all coastal state governments to identify land for setting up major ports, shipbuilding yards or projects comprising both.

Shipping minister G K Vasan said, "The number of ports to be set up, timelines and the estimated investment will depend on the response received." Proposals have been received from Andhra Pradesh and Karnataka, which are under examination. Responses from other coastal states are awaited, said Vasan.

According to rating agency Icra's report, cargo growth at Indian ports was four per cent last year. While growth in cargo volumes at major ports was 1.6 per cent, non-major ports reported nine per cent growth.

To improve the efficiency of government-run ports, an outlay of Rs 26,022 crore (excluding private investment) has been proposed for the 12th five-year Plan (2012-17). Of this, investment of Rs 22,757 crore is for infrastructure. The balance is meant for Dredging Corporation of India, harbor works for the Andamans and Lakshadweep, and the Sethusamudram project.

The traffic at major ports is expected to grow to 1,215 million tonnes by 2019-20, whereas the traffic at non-major ports is expected to grow at a compounded annual rate of 15.9 per cent from the present 288.8 mt to 1,269 mt by 2019-20, said the ministry. Therefore, the likely traffic at ports would grow to 2,484 mt by 2019-20 from 849.8 mt, a compounded annual growth of 11.3 per cent.

Source Link

The Union Minister for Shipping, Mr G. K. Vasan stated that as per the National Maritime Agenda (NMA), the government plans to commission at least 4 hub ports, two each on the east coast and west coast.

Chennai Port and Visakhapatnam Port on the east coast and Jawaharlal Nehru Port (JNP) and Cochin Port on the west coast will be developed into hubs capable of receiving 13,500 TEU containerships.

The Minister further stated that private investment under PPP has been envisaged under the NMA during the 2010-20 period. Of the total Rs 1,09,449.41 crore of investment planned in Major Ports during the decade, Rs 72,878.16 crore has been earmarked from the private sector for port development activities/projects like construction of berths, procurement of equipment, road-rail connectivity and other related projects.

Source Link