Priority on Efficiency

Ports and maritime trade serve in a big way to enhance the logistics and
eventually the GDP. Ports have finally come into the spotlight, and PPP
investments have sped up implementation. But building ports is just half the
battle won. Global maritime trade sets high benchmarks in business excellence to
which Indian ports are adapting only now. Dipal Gala reports

    To sustain India's present high rate of growth, India has to increase its share in world trade.
Since 95 per cent of India's external trade by volume and 70 per cent by value takes place
through ita ports, it is imperative to augment and upgrade port infrastructure.
    From 2003 to 2010, traffic through major ports grew at a Compounded Annual Growth Rate
(CAGR) of 8.45 per cent. Traffic volumes at major ports increased from 345 million tonnes per
annum to 561 million tonnes per annum, an increase of 63 per cent.
    Simultaneously, there has been tremendous growth in the traffic handled by non-Major Ports
and their share in total traffic handled has increased from 10 per cent in 1995 to 31.5 per cent in
2010.
    This growth in traffic, has resulted in the capacity utilisation of more than 90 per cent at major
ports with some experiencing more than 100 per cent capacity utilisation. This connotes
congestion and very high berth occupancy. For efficient port operations, 70 per cent capacity
utilisation is considered to be optimum.
    The Shipping Ministry expects traffic at major ports is likely to grow at a CAGR of 8.03 per
cent from 561 million tonnes in 2009-10 to 1,215 million tonnes by 2019-20, whereas the traffic
at non-major ports is expected to grow at a CAGR of 16 per cent from the present level of 289
million tonnes to 1270 million tonnes. Thus, the anticipated traffic at Indian ports would be 2485
million tonnes by 2019-20 from the present level of 850 million tonnes at a CAGR of 11.32 per
cent.
    To meet this anticipated traffic, the major and non-major Ports have formulated plans for
development of new terminals, upgrading existing berths and modernising operations by
inducting state of the art cargo handling equipment. Considering the objective of 70 per cent
capacity utilization, it is necessary to increase the overall capacity of Indian Ports to 3230 million
tonnes by 2020 which is more than three times the present level of 963 million tonnes.
    This will entail large-scale investment and induction of newer technologies to reduce cost and
to bring in efficiency in operations. This is not possible without involving private sector as active
partners in development.
The PPP Experience
In the port sector, the experience with PPPs has been very encouraging. The port sector has not
only been able to attract private investment for large number of infrastructure projects but has
also benefited from cost effective and efficient port operations ushered in by private players. The
terminals set up through PPP mode have achieved performance levels which match the best
internationally in terms of efficiency and cost effectiveness.
    Attracting private capital through PPP projects has been achieved in the Port sector because of
a favourable and investment friendly policy framework that was put in place by Government of
India.
    As a result, 24 PPP projects involving an investment of Rs.6,486 crores have been completed
and are under operation. Another 19 PPP projects are under implementation involving an
investment of about Rs.12,498 crores and 21 more projects are under bidding. In the last 18
months alone, 19 PPP projects have been awarded a dozen projects are scheduled to be awarded
before the end of this financial year.
    These projects include International Container Terminals at JNPT, International Container
Transhipment Terminal (ICTT) at Vallarpadam, LNG Regasification Terminal at Cochin, Mega
Container Terminals at Chennai and Ennore, new coal berths in Paradip, Tuticorin and Vizag
among others.
    All the big names in the international maritime sector and leading Indian operators have
invested in BOT projects in the Port sector.
    Though the experience with PPP projects has been successful, it has not been without
challenges. There have been considerable delays and uncertainty in getting clearances from
various Ministries and agencies. Litigation during tendering process also takes its toll on some
PPP projects. There was thus a need to streamline the clearance processes and ensure that
decisions are taken within a timeframe, promptly.
    Shipping minister Vasan is of the view that a robust regulatory framework needs to be put in
place for the port sector for all operators, public or private, and all ports, major or nonmajor, to
have a level playing field. At present, tariffs are fixed for major ports by the TAMP while non-
major ports are free to fix their own tariff. There are concerns that some non-major ports with a
locational advantage, charge exorbitantly from the trade. The role of TAMP also needs to be
reviewed in the changing context.
    The Ministry of Shipping is in the process of drafting a comprehensive legislation
consolidating the Indian Ports Act, 1908 and the Major Port Trusts Act, 1963. There are
suggestions that Port Trusts should adopt the 'Land Lord' port model in the long run to ensure
more efficient service and to promote exim trade.
The highlights of some of the policy initiatives taken by the Shipping Ministry :

• 100 per cent Foreign Direct Investment (FDI) under Port development projects automatic route.

• 100 per cent income tax exemption for a period of 10 years.

• Standardisation of bidding documents to ensure uniformity and transparency in the award of

projects.

• Model Concession Agreements have been standardised and simplified.

• Tariff setting mechanism modified with tariffs being set upfront by Tariff Authority for Major
Ports (TAMP).
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P
o
rt
M
a
n
a
g
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m
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t
T
he
lat
es
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of
In
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an
po
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a
ga
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dr
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pr
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di
pa
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al
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es
gr
ou
p. c
o
m 
    
Effi
cie
nc
y
wil
l
be
the
ke
yw
or
d
in
po
rt
ma
na
ge
me
nt.
To
ma
na
ge
the
ex
pe
cte
d
inc
rea
se
in
tra
de
vol
um
e,
sev
era
l
po
rts
ha
ve
br
ou
ght
in
effi
cie
nci
es
at
var
iou
s
lev
els
.
Hig
h
Tu
rn
ar
ou
nd
Re
du
cin
g
be
rth
oc
cu
pa
nc
y
an
d
inc
rea
sin
g
its
util
iza
tio
n
is
oft
en
the
ce
ntr
al
pol
icy
of
po
rt
ma
na
ge
me
nts
to
ma
na
ge
hig
he
r
vol
um
es.

Te
ch
nol
og
y
Te
ch
nol
og
y
co
me
s
to
the
res
cu
e:
a
hig
hly
me
ch
ani
se
d
ter
mi
nal
op
era
tin
g
sys
te
m
at
po
rts
suc
h
as
M
un
dra
ha
s
be
en
abl
e
to
bri
ng
in
dra
sti
c
im
pr
ov
em
ent
in
po
rt
ma
na
ge
me
nt.
Th
e
glo
bal
sta
nd
ard
is
co
mp
let
e
onl
ine
op
era
tio
ns,
so
tha
t
op
era
tor
s
do
no
t
ha
ve
to
co
me
to
the
po
rt
to
res
olv
e
det
ails
.
    
Th
e
M
um
bai
Po
rt
ha
s
ins
tall
ed
a
Ve
sse
l
Tra
ffic
Ma
na
ge
me
nt
Sys
te
m
(VT
MS
)
to
ha
ndl
e
hig
h-
de
nsi
ty
tra
ffic
effi
cie
ntl
y.
Ma
ny
po
rts
in
so
ut
he
rn
Ind
ia
inc
lud
ing
the
Ch
en
nai
po
rt
are
in
the
pr
oc
ess
of
fin
aliz
ing
de
als
to
ins
tall
the
VT
MS
an
d
ma
y
be
co
me
the
or
de
r
of
the
da
y
in
po
rt
op
era
tio
ns.

M
ate
rial
Tra
cki
ng
At
the
Kri
sh
na
pta
na
m
po
rt,
tru
cks
tha
t
mo
ve
wit
h
loa
de
d
ma
ter
ial
are
all
on
RFI
D
an
d
the
cus
to
me
rs
ca
n
tra
ck
ev
ery
kil
o
of
the
ir
ma
ter
ial,
an
yw
he
re
wit
hin
the
po
rt
or
ou
tsi
de.

Su
rve
illa
nc
e
Sys
te
ms

Als
o,
re
qui
re
d
is a
hig
h
lev
el
of
sec
uri
ty.
Be
tw
ee
n
the
hu
nd
re
ds
of
ve
hic
les
inv
olv
ed
in
loa
din
g
an
d
unl
oa
din
g,
an
d
the
ma
ssi
ve
sto
rag
e
ho
us
es,
po
rts
an
d
the
ir
wa
re
ho
us
es
ne
ed
hig
h
sur
vei
lla
nc
e.
Se
cur
ity
sys
te
ms
als
o
hel
p
to
av
oid
acc
ide
nts
tha
t
we
re
a
ear
lier
a
reg
ula
r
oc
cur
an
ce
in
ma
ny
po
rts.

Sp
ee
dy
Fre
igh
t
Po
rts
lik
e
Pip
av
av
ha
ve
Co
nta
ine
r
Fre
igh
t
Sta
tio
n
(CF
S)
wit
hin
the
po
rt
lim
its
for
co
ns
oli
da
tin
g
car
go
mo
vin
g
to
or
fro
m
the
im
me
dia
te
hin
ter
lan
d.
As
a
res
ult,
co
nta
ine
rs
ca
n
typ
ical
ly
be
mo
ve
d
fro
m
the
CF
S
to
the
ves
sel
in
a
rea
lly
sh
ort
sp
an,
a
cle
ar
tim
e
an
d
cos
t
sav
ing
s
ad
va
nta
ge
for
bo
th
car
go
ow
ne
rs
an
d
shi
ppi
ng
lin
es.

Co
m
mu
nic
ati
on
Wi
thi
na
po
rt
are
a
lar
ge
nu
mb
er
of
pla
yer
s
an
d
on
e
or
mo
re
ter
mi
nal
op
era
tor
s.
Be
sid
es
the
se
the
re
are
shi
p
ag
ent
s,
tru
ck
ers
,
car
go
ag
ent
s,
fre
igh
t
for
wa
rd
ers
,
etc
.
For
effi
cie
nc
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the
re
ha
s
to
be
a
go
od
co
m
mu
nic
ati
on
sys
te
m
to
int
era
ct
wit
h
ea
ch
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an
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av
oid
du
pli
cit
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of
op
era
tio
ns
by
dat
a
sh
ari
ng.
Thi
s
ca
n
be
br
ou
ght
ab
ou
t
thr
ou
gh
Po
rt
Co
m
mu
nit
y
Sys
te
m
(PC
S).
    
Po
rts
are
als
o
co
nsi
de
rin
g
var
iou
s
ot
he
r
op
tio
ns
to
inc
rea
se
pr
od
uc
tivi
ty.
A
Do
ck
Aid
Sys
te
m
for
ca
n
hel
p
eli
mi
nat
e
acc
ide
nts
wh
ile
be
rth
ing
ves
sel
s;
Au
to
ma
tic
M
oo
rin
g
Sys
te
m
av
oid
s
the
ne
ed
for
hu
ma
n
int
erv
en
tio
n;
Oil
Spi
ll
De
tec
tio
n
sys
te
m
usi
ng
rad
ars
an
d
Fer
tili
zer
Car
go
Co
mp
lex
Sys
te
m
sp
ee
d
up
ba
ggi
ng
pr
oc
ess
are
gai
nin
g
pr
om
ine
nc
e.
Is
th
ere
a
sig
nifi
ca
nt
shi
ft
in
ma
riti
me
tra
de
- ie
fro
m
Ea
st
co
ast
of
Ind
ia
to
Ea
st
Asi
a-
wh
ere
ne
w
wo
rld
ma
rke
ts
are
?
Gr
ow
th
in
the
cu
mu
lati
ve
vol
um
e
of
car
go
ha
ndl
ed
by
Ind
ian
po
rts
in
20
09-
10
wa
sa
15
%
yo
y
inc
rea
se.
Ind
ia
is
an
ex
po
rte
r
of
iro
n-
or
e
an
d it
im
po
rts
co
al
(th
er
ma
l/c
oki
ng)
in
bul
k
qu
an
titi
es.
Fur
the
r,
the
re
are
var
iou
s
ot
he
r
br
ea
k
bul
k
an
d
bul
k
co
m
mo
diti
es
wh
ich
co
ns
tit
ute
the
ma
riti
me
tra
de
of
Ind
ia.
Ma
jori
ty
of
thi
s
tra
de
is
wit
h
the
Asi
a/
Au
str
ali
a
an
d
on
ot
he
r
sid
e
ext
en
din
g
to
Mi
ddl
e
Eas
t/A
fric
a.
    
Th
e
iro
n
or
e
tra
de
gre
w
at
CA
GR
of
aro
un
d
10
%
du
rin
g
20
03-
20
07
an
d
ex
po
rt
of
iro
n-
or
e
fro
m
Ind
ia
to
Chi
na
tri
ple
d
du
rin
g
the
sa
me
pe
rio
d.
M
or
e
tha
n
thr
eef
ou
rth
de
ma
nd
of
se
a
bo
rn
e
tra
de
of
iro
n-
or
e
co
me
s
fro
m
Asi
a
an
d
he
nc
e
ea
st
co
ast
of
Ind
ia
bei
ng
in
clo
se
pr
oxi
mit
y
to
Chi
na
an
d
ot
he
r
Asi
an
co
un
tri
es
is a
pr
efe
rre
d
ch
oic
e
ag
ain
st
we
st
co
ast
.
    
Si
mil
arl
y,
de
ma
nd
for
im
po
rt
of
Co
al
is
inc
rea
sin
g
wit
h
the
inc
rea
se
in
en
erg
y
re
qui
re
me
nt
an
d
ex
pa
nsi
on
of
ste
el
ind
ust
ry.
Th
e
co
al
tra
ffic
at
Ind
ian
Po
rt
ha
s
inc
rea
se
d
by
ab
ou
t
23
%
in
fiv
e
ye
ars
,
wh
ere
in
Ind
ia's
the
rm
al
co
al
im
po
rt
ha
s
inc
rea
se
d
by
35
%
fro
m
20
03-
20
07.
Au
str
ali
a/S
ou
th
Afr
ica
/In
do
ne
sia
co
ntr
ibu
tes
mo
re
tha
n
60
%
of
the
tra
de
an
d
ea
st
co
ast
bei
ng
at
a
clo
ser
pr
oxi
mit
y
to
all
the
se
co
un
tri
es,
a
ma
jori
ty
of
co
al
(th
er
ma
l/c
oki
ng)
car
go
is
bei
ng
im
po
rte
d
fro
m
the
se
co
un
tri
es
via
Eas
t
Co
ast
.
Th
e
sa
me
is
ex
pe
cte
d
to
inc
rea
se
in
fut
ur
e,
wit
h
gre
en
fiel
d/
br
ow
nfi
eld
ex
pa
nsi
on
of
ste
el
pla
nts
an
d
po
we
r
pla
nts
as
we
ll
as
inc
rea
sin
g
po
rt
ca
pa
cit
y
in
the
Eas
t
Co
ast
.
    
Ot
he
r
ma
jor
fac
tor
s
for
shi
ft
in
the
tra
de
fro
m
W
est
to
Eas
t
Co
ast
of
Ind
ia
inc
lud
e
ina
de
qu
ate
dra
ft,
co
ng
es
tio
n
at
po
rts
on
the
we
ste
rn
co
ast
an
d
co
nst
rai
nt
of
av
ail
abi
lity
of
lan
d
for
lar
ge
sto
rag
e
are
a.
    
D.
V.S
.
Raj
u,
C
M
D,
Ga
ng
av
ara
m
Po
rt

Ad
ver
tis
em
ent
 
Links

Port
Mana
gemen
t
The
latest on
the
radar of
Indian
ports is a
gamut of
technolo
gy
driven
manage
ment
processe
s

dipal.gala
@timesgr
oup.com 

    Efficiency
will be the
keyword in
port
manageme
nt. To
manage
the
expected
increase in
trade
volume,
several
ports have
brought in
efficiencies
at various
levels.
High
Turnaroun
d
Reducing
berth
occupancy
and
increasing
its
utilization
is often the
central
policy of
port
manageme
nts to
manage
higher
volumes.
Technology

Technology
comes to
the rescue:
a highly
mechanise
d terminal
operating
system at
ports such
as Mundra
has been
able to
bring in
drastic
improveme
nt in port
manageme
nt. The
global
standard is
complete
online
operations,
so that
operators
do not
have to
come to
the port to
resolve
details.
    The
Mumbai
Port has
installed a
Vessel
Traffic
Manageme
nt System
(VTMS) to
handle
high-
density
traffic
efficiently.
Many ports
in southern
India
including
the
Chennai
port are in
the process
of finalizing
deals to
install the
VTMS and
may
become
the order
of the day
in port
operations.

Material
Tracking
At the
Krishnapta
nam port,
trucks that
move with
loaded
material
are all on
RFID and
the
customers
can track
every kilo
of their
material,
anywhere
within the
port or
outside.
Surveillanc
e Systems
Also,
required is
a high level
of security.
Between
the
hundreds
of vehicles
involved in
loading and
unloading,
and the
massive
storage
houses,
ports and
their
warehouse
s need high
surveillanc
e. Security
systems
also help to
avoid
accidents
that were a
earlier a
regular
occurance
in many
ports.
Speedy
Freight
Ports like
Pipavav
have
Container
Freight
Station
(CFS)
within the
port limits
for
consolidati
ng cargo
moving to
or from the
immediate
hinterland.
As a result,
containers
can
typically be
moved
from the
CFS to the
vessel in a
really short
span, a
clear time
and cost
savings
advantage
for both
cargo
owners and
shipping
lines.
Communic
ation
Within a
port are a
large
number of
players and
one or
more
terminal
operators.
Besides
these there
are ship
agents,
truckers,
cargo
agents,
freight
forwarders,
etc. For
efficiency
there has
to be a
good
communica
tion system
to interact
with each
other and
avoid
duplicity of
operations
by data
sharing.
This can be
brought
about
through
Port
Community
System
(PCS).
    Ports are
also
considering
various
other
options to
increase
productivit
y. A Dock
Aid System
for can
help
eliminate
accidents
while
berthing
vessels;
Automatic
Mooring
System
avoids the
need for
human
interventio
n; Oil Spill
Detection
system
using
radars and
Fertilizer
Cargo
Complex
System
speed up
bagging
process are
gaining
prominenc
e.
Is there a
significant
shift in
maritime
trade - ie
from East
coast of
India to
East Asia -
where new
world
markets
are?
Growth in
the
cumulative
volume of
cargo
handled by
Indian
ports in
2009-10
was a 15%
yoy
increase.
India is an
exporter of
iron-ore
and it
imports
coal
(thermal/c
oking) in
bulk
quantities.
Further,
there are
various
other break
bulk and
bulk
commoditi
es which
constitute
the
maritime
trade of
India.
Majority of
this trade is
with the
Asia/Austra
lia and on
other side
extending
to Middle
East/Africa.

    The iron
ore trade
grew at
CAGR of
around
10% during
2003-2007
and export
of iron-ore
from India
to China
tripled
during the
same
period.
More than
threefourth
demand of
sea borne
trade of
iron-ore
comes
from Asia
and hence
east coast
of India
being in
close
proximity
to China
and other
Asian
countries is
a preferred
choice
against
west coast.

    Similarly,
demand for
import of
Coal is
increasing
with the
increase in
energy
requireme
nt and
expansion
of steel
industry.
The coal
traffic at
Indian Port
has
increased
by about
23% in five
years,
wherein
India's
thermal
coal import
has
increased
by 35%
from 2003-
2007.
Australia/S
outh
Africa/Indo
nesia
contributes
more than
60% of the
trade and
east coast
being at a
closer
proximity
to all these
countries, a
majority of
coal
(thermal/c
oking)
cargo is
being
imported
from these
countries
via East
Coast. The
same is
expected
to increase
in future,
with
greenfield/
brownfield
expansion
of steel
plants and
power
plants as
well as
increasing
port
capacity in
the East
Coast.
    Other
major
factors for
shift in the
trade from
West to
East Coast
of India
include
inadequate
draft,
congestion
at ports on
the
western
coast and
constraint
of
availability
of land for
large
storage
area.
    D.V.S.
Raju, CMD,
Gangavara
m Port
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