Given the rising demand for port infrastructure on the back of growing imports, prospects are high that non-major ports will serve the spill-off demand from major Indian ports and boost their capacities in line with the anticipated new demand. Surya Kannoth
The Ministry of Shipping through its Maritime Agenda 2010-2020 has set a target capacity of over 3,130 MT by 2020, largely through private sector participation. More than 50 percent of this capacity is expected to be created at non-major ports.
Falling in line, government-owned Paradip Port Trust in Odisha has an ambitious plan to capture at least one-third of container traffic of Mumbai’s Jawaharlal Nehru Port Trust (JNPT), India’s largest container port, with an investment of about Rs 16,500 crore in multiple projects spread across in 10 years to increase the port’s capacity to 270 million tonnes per annum.
The current capacity of the port stands at 108.5 million tonnes per annum. At a recent investment forum in Mumbai to attract investors in various Paradip Port projects Paradip Port Trust chairman S S Mishra said, “different projects would require an investment of 16,500 crore, for which we will go in for a public private partnership (PPP) in addition to Rs 900 crore coming in from internal accruals.”
Setting up six new captive berths of more than 10 million tonnes per annum (TPA) capacity, each is part of the development of a Western Dock complex at the port, which alone requires an investment of Rs 6,500 crore.
It is also setting up a southern oil jetty of 10 million TPA, which the port plans to commission later this year. Among other new projects the port is planning the automation process to hike capacity by 50 million TPA; a new iron ore berth of 10 milllion TPA; a coal berth of 10 million TPA; a multipurpose clean cargo berth of five million TPA; an LNG terminal of 10 million TPA and an Inland Container Depot (ICD).
Talking about competition from other ports and sustaining the growth numbers Mishra said, “On the east coast Gopalpur is yet to materialise. We may be hit by competition in the short run but being a government-run port, there are several advantages which are like guaranteed tariff for three years and no hidden costs.”
Likewise, the current congestion at Tamil Nadu’s Tuticorin Port bodes well for the Vallarpadam International Container Transshipment Terminal (ICTT) as cargo is being diverted to Kochi.
Tuticorin Port has put an embargo restricting imports by 50 percent, owing to heavy rush at the port. Due to this, both importers and exporters are finding it difficult to move cargo as the embargo is on account of congestion at the port. Moreover, it is not stipulated as to when the port operation would return to normalcy, said a press release issued by the port authorities.
The Vallarpadam International Container Transshipment Terminal (ICTT) registered a record throughput of 30,258 TEUs in May, according to DP World, which operates the terminal. Throughput in May was higher than that in the previous month, and even exceeded the throughput recorded in May 2013.
Clocking the fastest growth in cargo handling, Adani’s Mundra Port handled 100 million metric tonnes in FY13-14. The port today possesses capacity to handle over 200 million tonnes of cargo, which is much ahead of the port’s original timeline of 2020. “I see Mundra Port as a strategic harbinger which our network of ports on Indian coast will emulate, and grow exponentially,” said Gautam Adani, chairman of the Adani Group in a press statement.
Mundra boasts of the world’s largest and fully mechanized coal import terminal with a capacity of 60 MMTPA which was commissioned in December 2010. Adani Ports, which also operates terminals in Hazira and Dahej, in Gujarat, Mormugao in Goa and Visakhapatnam in Andhra Pradesh, is now setting up a bulk cargo handling facility in Tuna Tekra (Kandla Port) in Gujarat and a container terminal at Ennore in Tamil Nadu.
Recently, Adani completed the acquisition of Dhamra Port in Odisha from Tata Steel and L&T Infrastructure Development Projects. In May, it executed a pact with both the companies to acquire the port for about Rs 5,500 crore.
“The Dhamra port acquisition now gives us an opportunity to replicate the development and phenomenal growth of the Mundra port on the eastern coast of India and thereby continue to execute on our pan-India strategy,” said Gautam Adani. The port handled 14.3 million tonnes of cargo in 2013-14.
Following the acquisition, the second phase of development will be initiated within 90 days and completion targeted in 30 months, Adani Ports has said. Dhamra Port, which handles coal, iron ore and other minerals is expected to handle different types of cargo in the coming days. The company expects 15-20 percent increase in cargo at the port in this financial year.
Meanwhile, Karmarajar port (erstwhile Ennore port) is aiming to become an alternative to Chennai port for the export of cars considering the fact that the port is planning to create additional car parking facility to accommodate 4,000 vehicles at a time. The port handles coal that was once Chennai port’s main revenue generating cargo.
In response to a wishlist of industry players at a trade meet at the Madras Chamber of Commerce and Industry, Kamarajar port’s corporate planning and business development GM R. Senthil Kumar said the port would soon come out with a tender for additional car parking facility and it would be operational in 18 months.
“We already have a huge car parking facility that can accommodate 10,000 cars at a stretch. Another 2,500 cars can be parked near the shipping area. Now, we will add an additional facility that will enable parking of 4,000 more cars,” he added.
With six cargo handling berths with a total capacity of 30 million tonne per annum, the port is expected to handle 24 million tonnes of cargo this fiscal, which would be around 34 per cent growth compared to 17.89 million tonne handled in 2012-13.
Elaborating on the port’s expansion plans, he said the port had awarded contracts for development of container terminal, multi-cargo berth and third coal terminal for Tangedco and all the three projects were expected to be ready in 2016.
Cargo growth outlook
According to the rating agency ICRA, the cargo growth outlook for the port sector will continue to be strong over the medium to long term driven by the domestic requirements of coal, for power and other sectors; crude oil, for meeting domestic petroleum requirements; and containers, given the cost and logistical advantages associated with containerization.
The rating agency goes on to say, “the non-major ports, by virtue of their superior cargo handling infrastructure, large capacity and high operating efficiency, will be well-placed to wean traffic away from major state-run ports as well as garner a larger proportion of the incremental cargo.”
Furthermore, as there is no near-term resolution to the infrastructural problems, major ports will continue facing issues around capacity and efficiency.