Ports play a vital role in the overall economic development of the country. About 95 per cent by volume and 70 per cent by value of the country’s international trade is carried on through maritime transport. India is a major maritime nation by virtue of its long coast line of around 7,517 Kms on the western and eastern shelves of the mainland and also along the islands, bejewelled with 13 major and 176 non-major ports, strategically located on the world’s shipping routes.
The traffic at major Ports of India is expected to grow 1,214.8 million tonnes (MT) by 2019-20, whereas the traffic at non–major ports is expected to grow at a Compound Annual Growth Rate (CAGR) of 15.9 per cent from the present level of 288.8 MT to 1,269.5 MT by 2019-20, according to a press release by the Ministry of Shipping released on April 29, 2011. Therefore, the likely traffic at Indian Ports would grow to 2,484.4 MT by 2019-20 from the present level of 849.8 MT at CAGR of 11.3 per cent.
India has announced a combined US$ 110 billion package to develop its ports and shipbuilding industry by 2020. The ten-year plan is known as Maritime Agenda 2010-2020, which intends to develop the Indian Ports Capacity to 3,200 MT by 2020. This will replace the existing US$ 30 billion National Maritime Development Programme (NMDP), which is due to expire in March of 2012. The port sector under the new plan would invest US$ 66 billion, of which the majority will be from private investors. Two new ports will be built, one on each coast, while four of the 13 existing major ports will be substantially upgraded. These will be Nhava Sheva, Cochin, Chennai and Visakhapatnam.
The Indian government believes that the private sector will handle 50 per cent of the nation’s cargo by 2015. In 2009-10, 34 per cent of Indian cargo was handled by non-governmental terminals; this was up from 27 per cent in the previous year. A decade ago, the private sector handled just 5 per cent, according to Port Strategy. The Union Shipping Ministry has started working on some of its plans such as corporatisation of major port trusts. Mumbai’s Jawaharlal Nehru Port Trust (JNPT) will be the first port to be corporatised.
There are 14,500 kilometres (km) of navigable and potentially navigable inland waterways in the country of which the following five inland waterways have been declared as National Waterways:
- National Waterway-1: Allahabad-Haldia stretch of the Ganga–Bhagirathi-Hooghly river (Total length-1620 km) in the states of Uttar Pradesh, Bihar, Jharkhand and West Bengal.
- National Waterway-2: Sadiya-Dhubri stretch of the Brahmaputra river (Total length-891 km) in the state of Assam.
- National Waterway-3: Kollam-Kottapuram stretch of West Coast Canal and Champakara and Udyogmandal canals (Total length-205 km) in the state of Kerala.
- National Waterway-4: (Total length-1027 km) in the states of Andhra Pradesh and Tamil Nadu and the Union Territory of Puducherry.
- National Waterway-5: (Total length- 588 km) in the states of West Bengal and Orissa.
Out of above mentioned five National Waterways, developmental works are being carried out by Inland Waterways Authority of India (IWAI) on NW-1, 2 and 3 only.
SECTOR FACTS
- India has one of the largest merchant shipping fleet and is ranked 16th among the maritime countries.
- The annual capacity of India’s major and non-major ports is expected to increase upto 1.5 billion tonnes by 2012. According to India’s Planning Commission’s revised estimates, about US$ 8.5 billion is expected to be invested in the ports sector during the Eleventh Five Year Plan (2007–2012).
- Foreign direct investments (FDI) flows into Ports in April 2000 – October 2011 stood at US$ 1,635.08 million, according to the Department of Industrial Policy and Promotion (DIPP)
According to the Shipping Ministry,
- Ports, the gateways to India's International trade by sea, handle more than 95 per cent of the country’s total trade in terms of volume and about 70 per cent in terms of value.
- Indian port sector has crossed 1 billion tonnes mark in terms of cargo handling capacity.
Investment Opportunities
At the beginning of the financial year (2010-11), the Ministry of Shipping fixed a target of 21 projects under PPP for the major ports out of which two projects have been awarded so far at Tuticorin Port and Ennore Port. The targeted private investment through these projects is expected to be approximately US$ 3.07 billion during 2010-11.
For current status and investment opportunities in private public partnership (PPP) projects and other projects in the port sector, refer to following links-
(Source: Ministry of Shipping)
Inauguration of three major projects with a total capacity of 15 MT per year implemented at Ennore Port, namely the Common User Coal Terminal, Iron Ore Terminal and Car Terminal has taken the the annual capacity of Indian Port Sector to 1011 MT.
Investment Policy Updates
According to a recent Ministry of Shipping’s recent press communication a brand new programme – Perspective 2020 – will replace the existing NMDP plan. The Maritime Agenda 2010-2020 is a perspective plan of the Shipping Ministry for the present decade which has set the goals as follows:
- To create a port capacity of around 3,200 MT to handle the expected traffic of about 2,500 MT by 2020.
- To bring ports at par with the best international ports in terms of performance and capacity.
- To increase the tonnage under the Indian flag and Indian control and also the share of Indian ships in our EXIM trade.
- To promote coastal shipping as it will help in decongesting our roads and is environment friendly.
- To increase India’s share in global ship building to 5 per cent from the present 1 per cent.
- To increase the share of Indian seafarers from 6 – 7 per cent to at least 9 percent in the global shipping industry by 2015.
The Government of India is focusing on port infrastructure development in the country and is promoting private participation and foreign direct investment (FDI).
100 per cent FDI is allowed under the automatic route for:
- Leasing of existing assets of ports
- Construction/ creation and maintenance of assets such as-container terminals bulk/ break bulk/ multi-purpose and specialised cargo berths, warehousing, container freight stations, storage facilities and tank farms, cranage/ handling equipment, setting up of captive power plants, dry docking and ship repair facilities
- Leasing of equipment for port handling and leasing of floating crafts
- Captive facilities for port based industries
India's Shipping Ministry is considering removing fixing tariffs for major ports, passing responsibility for this to the ports themselves. Instead, a new regulator for the sector will be appointed who will be responsible for setting, monitoring and regulating service levels as well as technical and performance standards.
The guidelines for private sector participation in the Major Ports issued in October, 1996 allows and encourages private participation including Multi-National Companies (MNCs) in enhancing port capacities and modernization of port equipments etc. Accordingly, 100 per cent FDI is allowed in Port Sector to supplement domestic capital, technology and skills, for accelerated economic growth.
Source: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP)
Perhaps it is only India that is giving hope to global maritime industry when the world is reeling under an economic slowdown. The queuing up of foreign entities (to enter the country) clearly indicates this.
S S Kulkarni
Secretary General
Indian National Shipowners’ Association
WHAT'S NEW
The Visakhapatnam Port Trust has lined up a mechanisation and dredging programme involving an investment of Rs 2,600 crore (US$ 487.66 million) for the next two years. The port is also developing two berths for handling thermal coal and steam coal and these are expected to be completed by March 2013.
Mundra Port and Special Economic Zone Ltd (MPSEZ), private multi-port operator and a subsidiary of Adani Enterprises Ltd has handled a record 984,000 metric tonnes of fertilizers in November 2011, thereby making it one of the largest fertilizer handling ports in India.
The Union Government of India is considering a pact with neighbouring countries for development of dry ports. These ports will be connected through roads and railways, which would help to bring down cost for traders and provide them greater access to international markets, thereby increasing trade.
Mitsubishi Heavy Industries (MHI) and Anupam Industries have formed a joint venture (JV), Anupam-MHI Industries, to manufacture port cranes and material handling equipment for domestic and global markets.
The Jawaharlal Nehru Port Trust (JNPT) and the Venice Port Authority have signed an agreement to enhance cooperation between the two in the areas of port operations, port management and hinterland connections.
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