Perspective on Port Sector in India

Gujarat Maritime Board

so

India
Contents:
1. Importance of Maritime Sector

2. Maritime Engagement of various countries in world

3. World Maritime History

4. Port Development configuration

5. Port and Supply chain security

6. World Seaborne Trade

7. Issues and constraints (Global)

8. Indian Maritime History

9. Trade and shipping trend

10. Containerization Growth

11. Issues and constraints (India)

12. Gujarat ports

13.

Importance of Maritime Sector
 Marine transportation plays a key role in Global economy
 90% of the world’s trade involves shipping
 Importance of water transport is increasing with economic Globalization
 Only mode of transport that can effectively linked the centers of industrial
production to their markets . Ports in developing countries represent a
key asset for economic development
 They need to operate efficiently and be properly structured in order to
support an increase in trade and GDP by linking countries, both coastal
and land locked, productive hinterland and consumers to global markets
 Through their nodal role of facilitating intermodal transport ports have a
significant role in contributing towards achievement of the Millennium
Development Goals,


Importance of Maritime Sector
 James Cook, captain of the Endeavour, first sighted the
Victorian coast in 1770, aborigines had been living in the ort
Phillip Bay region for at least 40,000 years.
 Generation of the first people would have seen the creation of
the bay itself, as the water rose to fill Bass strait and cut off
Tasmania from the mainland about 11000 years ago
 British ship first visited Port Phillip in 1802 and 1803.


Maritime engagement of major trading nations

Source: Compiled by the UNCTAD secretariat on the basis of data supplied by UNCTAD Handbook of Statistics
(trade) and Lloyds Register – Fairplay (fleet ownership).
 Maritime History
 Maritime history is a broad thematic element of history that often uses a
global approach, although national and regional histories remain
predominant. The earliest seaworthy boats may have been developed
as early as 45,000 years ago..
 In ancient maritime history, the first boats are presumed to have been
dugout canoes, developed independently by various stone age
population, and used for coastal fishing and travel.
 The indigenous of the pacific Northwest are very skilled at crafting wood.
 In the history of whaling, man began whaling in pre-historic times by boats


Contd..

 It is believed that navigation as a science originated on river Indus

some 5000 years ago.
 Pre-columbian transoceanic contact refer to interactions between the
Americans and people of other continents – Europe, Africa, Asia or
Oceania; before arrival of Christopher Columbus in 1492.



 Age of Navigation

 The magnetic needle compass for navigation was not

written of until the Dream Pool Essays of 1088 AD by the
author Shenkuo (1031-1095), who was also the first to
discover the concept of true north
 First use of magnetized needle for seafaring navigation in
Europe was written by Alexander Neck ham, circa 1190
AD.
 In 1300 AD, the pivot-needle dry-box compass was
invented in Europe.

Ships & Vessels
 Various ships were in use during the middle ages.
 The long ship was a type of ship that was developed over a period of centuries
and perfected by its most famous user the Vikings, in approximately the 9th
century.
 The Caravel was a ship invented in Islamic Spain and used in the Mediterranean
from the 13th century.
 Carrack was another type of ship invented in the Mediterranean in the 15th
Century. It was a larger vessel.
 Age of discovery was a period from the early 15th century and continuing in the
early 17th Century, during which European ships travelled around the world to
search for new trading routes and partners.

Age of Sail
 Age of sail technically and formally speaking, is the period in
which international trade and naval warfare were both
dominated by sailing ships
 The Age of sail mostly coincided with the age of discovery, from
15th to the 18th Century
 Naval ships used for wars
 In 1862, the steam powered CSS Virginia destroyed the sailing
ships USS Cumberland and USS Congress
 Age of Steam
 Steam technology was first applied to boats in 1770s.
 Technology only became relevant to trans-oceanic travel after
1815, by external combustion heat engines vessels.
 First ironclad battle ship was launched by the French Navy in
1859
 In 1900s, the internal combustion engine and gas turbine
came to replace the steam engine in most ship applications.
Port development configuration
 Components of Maritime Sector
 Ships
 Bulk carriers,
 VLCC, ULCC,
 Container ships- 20/40 ft containers
 Liquid carriers, LNG ships,
 Support Vessels-tugs, barges, bunkering vessels
etc.
 Oil Rigs

 Port Configuration
 Infrastructure
 Harbour side – Quay, jetty, breakwater, SPMs,
Liquid terminals, beacons, channel marking buoys
 Land side – Warehouses, platforms, godowns, CFS,
logistic parks, Road and rails, Administrative
buildings, Pipelines
 Activities involved
 Traffic Management
 Demarcation of channel, Navigation and
Navigational Aids, Communication, Electrification,
Dredging, Light House, VTMS
 Port operation
 Handling equipments, Mooring buoys

Port and supply chain security
 ISPS code of IMO was introduced in July 2004
 Implementation of ISPS resulted in small increase of port
/terminal handling costs
 2007: IMO statement that there still is much confusion about the
actual ISPS requirements
 Supply chain security concentrates on security issues in the
entire chain from Producer to consumer
 Pilot projects in several countries
 Negotiations on initiative to produce Supply Chain Security
Toolkit
 Scanning of cargo increasing
 Discussion about the procedures and costs
 WB involved in feasibility studies
World seaborne trade a by country groups, 2006
(In millions of tons)
World seaborne trade a by country groups, 2006
(In millions of tons)
Export/Import trade Value
Export Figure in Billion Dollars

Import Figure in Billion Dollars

Source: UNCTAD
EXPORT/IMPORT WORLD TRADE
Trend in ship size development
 During a long period ending in 1939 the size of tankers gradually rose to
between 10,000 and 12,000 deadweight tons

 by 1959 more than 37 per cent of the world fleet consisted of ships over
25,000 deadweight tons and 16 per cent were rated at more than 35,000
tons

 By the beginning of this year 1964, 1 5 tankers of at least 100,000 deadweight

tons were plying the seas

 Gradually VLCC and ULCC have been introduced.

 Higher discharge rates at the Ports and large sized vessels lie at the heart of
the present day maritime economics. This also means more deep water
ports.

Issues and constraints (Global)
 Economic Distance from world market affects most landlocked developing countries negatively,
as it entails a serious cost disadvantage in comparison with competitors in coastal
countries.
 Severe challenges to growth and development due to wide range of factors, including:
 Poor physical infrastructure
 Weak institutional and productive capacities
 Small domestic markets
 Remoteness from world markets and
 A high vulnerability to external shocks
 Trade Barriers- Tariff and Non-Tariff
 Genuine Development of multi-modal transportation system. Issues of transition
 Improving Security in ports
 Creating a level playing field between ports

Indian port sector
Indian maritime history
 India's maritime history predates the birth of Western civilisation.
 The world's first tidal dock is believed to have been built at Lothal around 2300 BC during the
Harappan civilisation.
 The Rig Veda, written around 2000 BC, credits Varuna with knowledge of the ocean routes
commonly used by ships and describes Naval expeditions using hundred-oared ships to
subdue other kingdoms.
 Two Indian astronomers of repute, Aryabhatta and Varahamihira, having accurately mapped the
positions of celestial bodies, developed a method of computing a ship's position from the stars
 The Andaman and Nicobar Islands then served as an important midway for trade between the
Indian peninsula and these kingdoms, as also with China.
 As trade between India and the Greco-Roman world increased spices became the main import
from India to the Western world, bypassing Silk and other commodities. The Indian
commercial connection with South East Asia proved vital to the merchants of Arabia and
Persia during the 7th–8th century.[


Contd..
 The period of 4000 years between Lothal and Bombay Dock, therefore, offers tangible
evidence of seafaring skills the nation possessed in the days of sail. In the early
seventeen century, when British naval ships came to India, they discovered the
existence of considerable shipbuilding and repair skills, as well as seafaring people.
An ideal combination was thus available for supporting a fighting force in India.
 During the mid-holoc Ocean witnessed the rise of three major civilizations of the
Mesopotamian, Egyptian and Indus Valley. They had strong trade and Maritime
linkages.
 Dholavira is another Harappan site located in the great rann of Khadir bet.
 The Mauryan empire (322–185 BC)- navy continued till the times of emperor
Ashoka(reign 273—32 BCE), who used it to send massive diplomatic missions to
Greece, Syria, Egypt, Cyrene, Macedonia through the sea route.
Map showing the history trade route
Milestone – Indian Ports
Contd..
Contd..
Contd..
Indian Port Sector at a Glance
Major Ports, India
India along its coastline of 7,517 km, has 13


major ports. It is a Concurrent Subject

12 major ports are Port Trusts, governed by the



provisions of Major Port Trust Act and 1 major

port is a corporate port.

In addition, there are 187 minor and intermediate


Kandla Kolkata

ports out of which, 41 minor ports are based Haldia

in Gujarat. Mumbai Paradip

Jawahar lal Nehru Port
Vishakhapatnam
Indian ports handle 95 per cent of India’s total


Ennore
foreign trade in terms of volume and 70 per Marmagoa

Chennai
New
cent in terms of value. Mangalore

Cochin
Indian ports handled cargo of 720 million tonnes
 Tuticorin
Major Ports
in 2007-08, a 11% increase over 2006-07
Source: Indian Port Association, National Maritime Development
Program

35
Legal frame work
 It’s a Concurrent subject. Most of the laws administered by GoI.
 The acts that govern the shipping activities in India are
 India Ports Act, 1908
 Major Port Trusts Act, 1963
 Inland Vessels Act, 1917
 Coasting Vessels Act 1837
 Merchant Shipping Act, 1958
 Merchant Shipping (Amendment) Bill, 2003
 Seamen’s Provident Fund Act, 1966
 Inland Waterways Authority of India Act, 1985
 Dock Workers (Regulation of Employment) Act, 1948
 Multimodal Transportation of Goods Act, 1993

Story So Far….
significant increase in India’s maritime traffic increasing


from 165 MTPA in 1991 to over 649 MTPA in 2006-07.

The cargo handled at the ports has been growing at an



Average Growth Rate of 11.1% over the period of 2004- Traffic Composition at Major Ports

Note: General cargo including Containers

06

Growth rate of container traffic is growing at a rate of



19.3% in 2006-2007.

Traffic projctd tp grow to a level of 790 MTPA by 2010



based on assumed GDP of 7%.

$13.5 billion (Rs.60,750 crore) of investments is envisaged



for the major ports under National Maritime Development

Program (NMDP).
37
 Growth in India’s Foreign Trade (Merchandise)

(US $
billions)

1.External Trade showing greater dynamism. Exports rising by 20% plus and imports by 30% plus in recent
years.
2.While exports took 10 years to double in the nineties, the doubling is now taking place in 3-4 years time.
38
3.India is not an export led economy. But external trade as a percentage of GDP is steadily rising.
 Commodity composition of exports
(Percentage shares)

39
Main drivers of growth are Chemicals, Engineering items, Iron ore and Petroleum
 Commodity composition of exports
(Percentage shares)
2002-03 2003-04

2004-05 2005-06

40
Main drivers of growth are Chemicals, Engineering items, Iron ore and Petroleum
Comparative Rank in Cargo handling ( 2007-08) Major
Ports vis -a- vis other port

Rank 1st

Rank 10th
Containerization
 Containerization has a deep impact on the maritime sector around the world.
 In early 1970s through the 1980s. Containerization was seen primarily as a
technological revolution
 It could improve ship turnaround time in ports and ensure cargo security.
 It gives economic benefits, transition from labour to capital intensive port
operations and finally recognized not just as a technological revolution, but
as the “trigger” for institutional, operation and changes which are still
continuing to impact on the maritime sector.
 Earlier the trend was to transport aggregate smaller valuable cargo in
containers. However, now the bulk cargo is also being transported in form of
containers
 Since 1980, container vessels of 2500 TEUs capacity were used. By the year
2002 ship in excess of 7000 TEUs came into operation. In the upcoming
years, ship in excess of 18,000 TEU is expected.


Container Traffic: Where are we?

(Lakh TEUs)

Source: IPA, Port Authorities

Container Traffic: Where are we?
Top 20 Container Ports
TEU

Provisiona
Penetration of Containerization

 Currently, containerized cargo represents about 30% by value of India’s

external trade.

 This proportion is likely to grow as containerization increasingly

penetrates the general cargo trades and increases its share from the
current 68% to nearer international levels of around 75-80% [World Bank,
2007].

 Traditional bulk cargoes like cement and foodgrains are also getting
containerized.

 Principal containerized commodities that India trades in include

engineering goods, agricultural commodities, textiles and readymade
garments, pharmaceutical products (bulk formulations) and machinery
(auto and electronic).
Driver factors of Indian ports
 Future of Indian may be driven by large private investment
 Development of complex industrial cluster/zone onshore like
Vizag, Haldia, Hazira, Dahej etc.
 Upcoming SEZs will need outlet for cargo movement
 Ship building Industry
 DFC- the Railway’s biggest ever venture will enable port cargo
movement
 A network of high performance of freight corridors will be developed
through SPV-DFCCIL.
 Feeder route of western corridor connecting the western ports of
Gujarat will be upgraded with estimated cost of Rs. 236.80 billion

Issues and constrains (india)
 Refinery exists in the hinterland, economies of hinterland would never
grow unless pipeline network
 Availability of land is main constraint for the transportation.
 India – self sufficient country and internal development oriented and
not export oriented. Internal trade has been inherent fragmented
trade.
 Private sector could not exists before 1995. GOG introduced private
port policy and first private port of Pipavav developed.
 In the changed scenario of drastically development of ports tends to
congestion in logistic road and rail connectivity.
 Indian flag ships are very small and also GRT is less
 Not many good sheltered locations for port, results in more cost of port
 Silting rate is comparatively high, results in additional cost of capital
and maintenance dredging
Background - Gujarat Port Sector
§ Strategically located with India’s longest
Gujarat : Strategic Location
coastline of 1600 km. Nearest maritime
outlet to Middle East, Africa and Europe

§ State has 42 ports - includes 1 major port and

41 non-major ports

§ The state has favourable marine conditions with

medium to large tidal variation Main Ports of Gujarat

§ The first state in India to invite Private

Sector Participation through competitive Gujarat
bidding Mundra
Kandla

Navlakhi
§ The first state in India to have Chemical Jamnagar
Okha Sikka
Terminal, first private port of India – Porbandar

Pipavav, the world’s one of the largest ship Dahej

Pipavav Hazira
recycling yards at Alang, India’s first two Magdalla

LNG Terminals in India


49
Traffic and Capacity Growth – GMB ports
 THANK YOU
Commodity composition – GMB ports
Traffic – Comparison with National Ports

Million Tons
Capacity Augmentation

Capacity in MMT Investment (Rs. Cr.)

Hinterland connectivity improvement at
Gujarat Ports
 The port hinterland connectivity of Gujarat ports play a vital part
in growth of port traffic.
 The quality and availability of roads and railways also
determines optimal capacity utilization of Gujarat ports.
 With a view to this, it is planned to improve and upgrade
road connectivity and provide rail linkages to ports of
Gujarat.

55
Contd..
 The linkages and logistics would be improved by ;
 Setting up SPVs and operationalization of projects for railway
connectivity to Hazira, Dahej and Bedi.
 Setting up of port connectivity and SPVs for other ports not having
connectivity viz. Porbandar, Okha.
 To ensure that four lanes good quality exit and entry to each port, which
is handling traffic above 1 million tons.
 To develop in tandem with other State Authorities the major access-roads
viz. coastal highway, Ahmedabad – Vadodara-Surat express highway etc.
 To improve the Coastal highway upto NH standard

56
Contd..

 Railway:
 Dahej
 64 km long BG rail connectivity (Project cost Rs. 198 cr.)
 SPV formed, Agreement signed amongst Equity share holders
 RVNL to take up the project soon . Tenders are underway.

 Hazira
 37 Km BG rail connectivity (Rs. 160 cr.)
 RVNL approved the project. MOU signed with RVNL. SPV
formed.
 Re-alignment of rail route in SEZ area is under revision

57
Contd..
 Railway:
 Bedi
 15 km BG rail connectivity joining Bedi and Rozi port (Rs. 25 cr.)
 Techno Economical survey carried out. Private port users have
shown interest for participation
 Railway board is requested for in-principle approval and form SPV
 Porbandar
 5 km missing link - (Rs. 21 cr.)
 Techno Economical survey carried out.
 Railway board is requested for in-principle approval
 For upcoming new Greenfield ports, Techno-Economical PFR entrusted to
M/s.Rites.
 Proposal submitted (April 2008) to GoI in Ministry of Shipping for BG rail
connectivity to minor ports of Gujarat under Delhi Mumbai Dedicated
Freight Corridor
58
Contd..
 Roads: (10 m wide)
 R&B department set up SH development project cell leading to NH/SEZ and
Ports.

 Phase 1
 Jakhau, Mandvi, Mundra and Dahej ports
 Total 170 km connectivity amounting to Rs. 426 cr. proposed.
 To be completed by May 2011

 Phase 2
 Pipavav, Navlakhi, Jodiya, Porbandar, Jafrabad, Ghogha, Dholai,
Sikka, Okha and new Greenfield ports
 Total 320 km road connectivity amounting to Rs. 795 cr. Proposed
 To be completed by Dec. 2011


59
Contd..

 Roads: (10 m wide)

 Phase 3
 Magdalla
 17 km road connectivity amounting to Rs. 43 cr.
 To be completed by July 2012

 ISSUE: Need for upgrading the roads up to 4 lane



60
State Wide Connectivity to GMB ports
– Rail, Road & Air
To Delhi

Gandhinagar
Kandla

Navlakhi
Mundra Jamnagar
Dholera
Rajkot
Okha Baroda

Bhavnaga
Airport/Airstrips r Dahej

Railway Network Porbandar Mithivirdi

National Highway
Veraval
State Highway Hazira
Pipavav
Vansibors
i
Maroli

To 61
Port Connectivity to Dedicated Freight Corridor

To Delhi
Palanpu
r
Existing Rail
Line
DFC

Mahesan
a

Ahmedaba
Kandla d

Mundra

Bharuch

Dahej

Surat

Hazira
Pipavav

Mumbai
To 62
Port services
 Maritime Transport Services
 International Transportation (freight & passengers) less sabotage
transport

 Maritime Auxiliary Services

 Maritime Cargo Handling Services
 Storage and Warehousing services
 Customs Clearance services
 Container Station and Depot Services
 Maritime Agency Services
 Maritime Freight Forwarding Services
Contd…
 Port Services
 Pilotage
 Towing and tug Assistance
 Provisioning, Fuelling and watering
 Garbage collecting and ballast waste disposal
 Port Captain’s services
 Navigation aids
 Shore-based operational services essential to ship operations, including
communications, water and electrical supplies
 Emergency repair facilities
 Anchorage, berth and berthing services
Contd..
 Logistic parks in JV with GIDB
 To improve container transportation
 Aggregation & Disaggregation of cargo
 Proposed possible locations – Dahej, Pipavav, Ahmedabad, Simar, Palanpur
 Land identified at Dahej for 1st Logistic Park. Lay-out planning is under way

 Dredging
 Presently GMB carries out 13 to 15 lac cum dredging at GMB ports
 There will be huge requirement and therefore, GMB proposed to form separate
Dredging Company

 Bunkering facilities
 In Indian cost, there is no substantial bunkering facilities.
 Storage and supply of Fuels
 Proposed location Okha and Porbandar

 Port mechanization
 Bulk Handling facilities to improve discharge rate
 Environment issues

 Portal – online e-services

 Tourism oriented projects – purchase of Hower craft, speed boat, Cruise liners
Ro Ro Ferry services
 Ro Ro / Ferry services
 Initially plan for Ghogha to Dahej Ro Ro Ferry service

 Administrative Approval obtained from GOG

 EIA at Ghogha under progress. Tenders to be invited by Sept. 2008

 Dahej land already acquired

 Offers from private ferry operators already invited

 Project cost – Rs. 100 cr. Expected to be operational by second half of

2010
 Services from destination Mandvi in Kutch, Porbandar and Okha in
Saurashtra are planned
Security, Safety and Environmental Measures at
Gujarat ports
 Coastal Security – GMB provide 3920 sq. mt. land for 5 marine police station at various ports
 ISPS Implementation – As per IMO directives 6 ports have been made ISPS Compliant. They
are certified by DG Shipping
 Setting of VTMS in Gulf of Cambay – through private participation (Investment Rs. 100 cr.),
scheduled to be completed by August 2009.
 Setting of VTMS in Gulf of Kutch in association with GOI – work in progress (Rs. 160 cr.) -
Delayed
 Navigational aids – constant monitoring and maintenance
 Oil Spill contingency plan
 Mangrove plantation – Plantation carried out at Jakhua and Dahej port in association with
Gujarat Ecology department in 90 Hector area
 Improving Environment standards by providing
 Increasing height of compound wall in cargo staking area
 Improving bulk cargo staking and handling facilities
 Plantation at various ports

 67
 Man power capacity building in the maritime sector in Gujarat

 Due to huge investment in port sector, employment opportunity of about

26,700 manpower will be created in 29 talukas of 15 Districts under
Sagarkhedu Sarvangi Vikash Yojana
 Looking to the tremendous development in maritime sector, there is
requirement of personals
 Managerial – Port Management, Research, Operation
 Technocrats – Port Planner, Designer, Engineers
 Skilled manpower – Technician, Tug operators, fitters, Electricians,
turners, drivers etc.
 Manpower in services industry

68
Issues and Constraints
 Land would be a major issue for fast implementation of the proposed projects.
 GMB would be procuring lands along new project sites and also building up land banks.
 GIDC may have to procure additional lands beyond back up area.
 Dispensation of captive jetties by giving them a set off needs to be revisited. It affects
commercial port development.
 Government agencies like GMB and GIDC may have to enter into joint-venture to set up Logistic
Parks.
 GMB Issues:
 Greater delegation to take up capital projects - proposal already submitted.
 Capacity building within GMB by way of training, retention and bringing in additional
manpower with specialized skills.
 Proposed amendment to Section 22(A) has largely resolved in tax related issues.
 Considering responsibility of huge capacity augmentation over next five years, bifurcation of
GMB at this stage is not advisable.

69
Thank you