Jawaharlal Nehru Port Trust (JNPT) has achieved a growth of 7.33 per cent during the financial year 2014-15 by handling 4.467 million TEUs of container traffic. Neeraj Bansal, Chairman-In-Charge, JNPT, says that most of the major ports need immediate dredging and that requires huge investments. The Shipping Ministry has worked out a PPP model in dredging in order to address this issue.
Can you please apprise us of the reasons for the dismal growth of the Indian port sector as compared to ports like Sri Lanka, Malaysia, Singapore, etc?
The growth of India´s maritime sector is constrained due to many developmental, procedural, and policy-related challenges like involvement of multiple agencies in the development of infrastructure, lack of requisite infrastructure for evacuation from major and non-major ports, leading to sub-optimal transport modal mix, limited hinterland linkages that increase the cost of transportation and cargo movement, low penetration of coastal and inland shipping in India, limited mechanisation and procedural bottlenecks, lack of scale, and deep draught and other facilities at various ports in India. All these add up to the congestion and increase the ship turnaround time. But, the Indian Government has taken many initiatives to remove this anomaly. It has allowed foreign direct investment (FDI) of up to 100 per cent under the automatic route for projects regarding construction and maintenance of ports and harbours. It has also facilitated a 10-year tax holiday to enterprises engaged in developing, maintaining, and operating ports, inland waterways, and inland ports.
Please tell us about the port´s achievements during the last one year?
The port handled 4.467 million TEUs of container traffic, registering a growth of 7.33 per cent during the financial year 2014-15, that is the highest ever container traffic since the inception of the port, and 56.13 per cent of the total container throughput of the country´s major ports. Presently, we have three working terminals - JNPCT (Jawaharlal Nehru Port Container Terminal), Nhava Sheva International Container Terminal (NSICT) operated by DP World on PPP (public private partnership) basis, and the terminal handled by other PPP partner Gateway Terminals India (GTI). All the three terminals have been successful in recording positive performance since their inception. The port has been constantly focussing on modernising its operational activities, and updating itself with the latest technologies. JNPT is a container specialised port, and is leading the volume of container cargo being handled by the ports in India. We currently own about 45 per cent of the total containerised cargo being handled in India, and have been consistently maintain¡ing our prime position over the last several years.
What is the country´s requirement of ports for fulfillment of EXIM trade?
The port trade in India is at an all-time high and is increasing by the day. So, there is a constant need for capacity enhancement through advanced technology. The inland waterways system needs to be addressed more aggressively. We need small ports around the coast, which will be exclusively for inland shipping. This will help in decongesting our roads and develop our coastal shipping.
As per the Shipping Ministry data, India´s 12 major ports have witnessed a drop to 55 per cent in share of cargo volume in 2013-14 as compared to 72 per cent in 2007-08. Can you please tell us about the factors that led to the fall in the cargo volume share?
Most of the major ports need immediate dredging that requires huge investments. To address this issue, the Shipping Ministry has worked out a PPP model in dredging, which is a very welcome move.
While the cargo growth outlook for the Indian port sector continues to be strong over the medium to long term, driven by the domestic requirements of coal for power and other sectors, and crude oil for meeting domestic petroleum requirements. Some near term uncertainty may, however, be associated with particular cargo categories like imported coal due to uncertainties plaguing the power sector and persisting delays in execution of green-field power projects; iron-ore due to unresolved policy issues; and containers due to the weak global environment affecting EXIM trade. Further, the resolution of the ongoing tariff policy related discussions to bring clarity on the tariffs going forward would be crucial for the long-term cargo growth prospects at the major ports.
Which model is feasible and efficient for port project execution? What are the pros and cons of PPP model in the port sector?
While there are arguments for and against this mode, the overall outlook for PPPs has been positive, in terms of bringing about competition, fairness in operations, and efficiency and quality of service. The move towards PPP as a solution for improved infrastructure, compe¡titive environment, and higher service level to customer was early in India. It has evolved significantly. However, there are issues developed during implementation of these projects, and need a greater deliberation among the stakeholders. It is also an opportunity for the Indian PPP experience to be taken to countries wanting to leverage PPPs in the port sector.
What are the major challenges faced by the Indian port sector? What are your expectations from the government for the sustainable growth?
Congestion, capacity constraints, and hinterland connectivity are the main challenges. The government is already trying to co-ordinate the new port development in key strategic hubs, and encourage private investment to ensure that the ports, which are key elements of infrastructure, allow the country to keep pace with the demands of its economic development.
How important is the port sector for the growth of the economy?
With a coastline of 7,517 km, our country´s geography offers immense scope for expanding business verticals through different transport routes. The need of the hour, hence, is to rapidly modernise and update the country´s port sector by considering future demand requirements. This will tremendously improve EXIM trade activities, and effectively reduce traffic congestion in other modes of transportation like roadways. Also, the government needs to focus on enhancing and strengthening the hinterland connectivity. China is one such successful example. The efficiency of hinterland networks within China has contributed immensely to improve the country´s EXIM trade activities. Water Highways is now being planned by the Ministry of Shipping. While improving the country´s trade activities, such initiatives will also result in attracting huge business opportunities for the port sector.
Please apprise us of the importance of seamless connectivity to ports?
The port is connected to the national network of the railways through the Panvel- Uran section of the Central Railway. Panvel is further connected to Konkan Railway, Diva on Central Railway, and Vasai on Western Railway. The Ministry of Railways has planned for a dedicated freight corridor, connecting JNPT with the northern hinterland.
Please tell us about your expansion plans and proposed investments?
The current capacity of the port is 4.1 million TEU. The container handling capacity of JNPT will go up to 9.7 million TEU with our two new terminals, viz., 330 metric tonne (MT) standalone container terminal (CT) and the fourth CT. The 330 MT extension will add 0.8 million TEU and the fourth CT, at an estimated cost of Rs 7,915 crore, is one of the biggest FDI port projects in India. It will enhance the port´s capacity to 4.8 million TEU. The phase-I will be completed by November 2017, adding capacity of 2.4 million TEU, and phase-II will be completed by November 2022. We are also planning to develop a port-based SEZ.
The project is expected to be fully completed by 2017, and involves an investment of Rs 600-700 crore from JNPT. The remaining portion of the investment will come from private manufacturers who will set up industrial units in the SEZ. We have signed an MoU with MMB for a satellite port at Wadhvan near Dahanu. This will be developed as a major port which will have 74 per cent equity share by JNPT and 26 per cent by the Maharashtra government.
Maritime Agenda envisages plans for creation port capacity of around 3200 MMT for handling the expected traffic of about 2500 MMT by 2020. Do you think that our ports are geared up for such a massive capacity augmentation?
The port sector is expected to witness a huge growth in the coming years. This year, international analysts are projecting India to achieve a growth of around 7.5-8 per cent which is more than China´s growth, which is pegged at around 7 per cent. With this, we are expecting immense growth prospects for the port sector. Ports will evolve as the gateways for economic growth in India in the coming years. The Ministry of Shipping has allotted us a target of 15 per cent growth for this fiscal. We are very confident of achieving this. Our effort will be to produce the best results and set new benchmarks in the port sector.
- SUPRIYA ABHIJEET OUNDHAKAR