2. INTRODUCTION
India has a long coastline , spanning about 7516.6
km
Recently it is being served by 13 major ports and
187 notified minor and intermediate ports.
With the general policy of liberation and
globalisation of the indian economy , now ports
sectors have been thrown open into the hands of
the private sectors
No legal bars to private sectors participation port
facilities as per the provision of the existing Major
Port Trust Act 1963.
Now more of public private participation in the
ports are encouraged on a Build Operate
Transfer(BOT).
3. TYPES OF PRIVATE
PORTS
Private non-commercial port, established primarily
to service its own requirements and generally
does not offer port services to the public
Private commercial port, offering port services to
the public
Private river port, located along the river bank
Marina, exclusively used for securing motorboats
and yachts
4. Present Status of Ports in
India
Major Ports – under Government of India
12 Major Ports
259 berths
about 75% of total traffic
Cargo handled – 423 MT (2005-06)
Non-Major Ports -under State Governments
187 Non Major Ports (61 cargo handling);
97 berths
about 25% of total traffic
Cargo handled – 150 MT (2005-06)
Total Cargo handled-573 MT (2005-06)
5. INCENTIVES TO PRIVATE PORT
OPERATORS
Fifty percent (50%) reduction in port charges for
wharfage, berthing and usage fees for private ports
duly registered with the PPA
Payment of a one-time annual privilege fee instead of
a percentage share of the revenue from cargo
handling operations
Registered private ports are automatically allowed to
undertake cargo handling operations either on their
own or by contract.
Independent operations subject only to regulatory
powers of the PPA
Simplified process and minimum documentary
requirements to facilitate applications
6. PRIVATE SECTOR PARTICIPATION:
MAJOR PORTS
Berths leased out for 10 years to SAH. and TISCO at
Haldia - 1991 for impart of coking coal and export of iron
& steel material.
A consortium led by P&O Australia is setting up a $200
million Container terminal on BOT basis at Jawaharlal
Nehru Port Trial operation started in April 1999.
Agreement signed for construction of a captive Coal
Jetty at Mumbai by Tata Electrics.
Construction and management of two coal berths at
New Mangalore Port (BOT) - $ 120 Million
Development of captive port facilities proposed for
petroleum crude, LPG, LNG by Indian and foreign oil
companies at Haldia, Paradip, Visakhapatnam,
Mangalore, Tuticorin, Cochin.
7. COST FACTOR
Private sector investment
It is estimated that infrastructure investment of $20bn
is needed to increase India’s container capacity to a
level sufficient to accommodate the country’s
economic growth. Private sector involvement will be
crucial to achieving such a high level of investment.
Fortunately, Indian regulation encourages private
sector involvement by allowing 100% foreign direct
investment (FDI) in the port sector
Challenges faced
In addition to the need to secure substantial
investment in port infrastructure, the Indian ports
sector will face several other challenges to increasing
port capacity and efficiency.
8. cont….
Reduction in logistics costs
There is also a need for a reduction in logistics costs
in the ports sector. Currently, nearly half of India’s
cargo is internationally transhipped. Transhipment-
related costs add to the already high internal logistics
costs, which are currently around 14% of GDP. When
compared to logistics costs of 5%-9% of GDP in many
developed nations, India’s costs highlight serious
inefficiencies. Poor road infrastructure, a disorganised
trucking network, low containerisation levels (as
compared against the global average) and lengthy
customs clearance times all contribute to India’s high
logistics costs and must be addressed in order to
increase efficiency.
9. PRIVATE PORT GROWTH
Private ports in India have shown a significant
rapid growth , as a result of the booming global
trade , the country’s massive energy requirement
and less than expected growth of public sector
ports.
Private ports like Adani Groups , L&T , JSW
Group are gearing up to handle high volume of
cargo basically due to huge demand for Indian
Steel , oil , and Gas Projects
However a key risk to private ports growth would
be faced with the slow down of the Indian trade ,
infrastructure, and energy build out.
10. cont….
private smaller ports in india have been notching up double-
digit volume growth whereas the 12 major ports are nowhere
near the picture as they struggled to churn out a dismal 0.38
per cent increase, according to the daily news & analysis of
india.
the divergence in growth rates between private and major
public ports continues to be accentuated with every passing
quarter and the assessment of the indian ports association
(ipa) with public port even suffering negative growth.
according to data available for the past two financial years,
four minor ports – essar ports, mundra, gujarat pipavav and
karaikal – are way ahead in performance compared with their
public sector peers.
the volume at adani-controlled mundra port in gujarat grew 33
per cent to 16.6 million tonnes in the december quarter from
12.5 million tonnes in april-june 2010.
11. cont….
APM Terminal-controlled Gujarat Pipavav is cruising, too. In the last
two years, container volumes have climbed a massive 90 per cent.
The total container volumes handled in 2011 was 610,243 TEU, up
from 321,400 TEU in 2009.
Volumes for the Tamil-Nadu based Karaikal port have almost
doubled. The specifics are not available in the public domain, but
insiders revealed that the increase has been a staggering 197 per
cent.
The corresponding figures for Essar port are not available, but by all
accounts, the private venture looks poised for a solid growth this
fiscal. The total volume handled was 39.55 million tonnes last
financial year and for April-December 2011, the number came in at
around 30.87 million tonnes, the report said.
The major ports pale in comparison. Last fiscal, the growth rate in
total volumes at all 12 major ports stood at a measly 1.57 per cent
year on year. IPA data showed that the volume growth for April-
February 2012 has been negative at -0.74 per cent.
12. DEMAND DRIVER
Demand and Supply assessment of Ports in India
Opportunities for Equipment Suppliers in Indian
Shipbuilding Industries
Ship repair Opportunities in Indian Offshore
Industry
Indian Shipbuilding Industry Opportunities for
Global Equipment Suppliers
13. MARKET SIZE
With 12 major ports and 187 minor ports, 7,517 km long
Indian coastline plays a pivotal role in the maritime transport
helping in the international trade. Traffic handled at major
ports during April 2008 to January 2009 is recorded to be
436686 units. The ports in India offer tremendous scope for
international maritime transport both for passenger and cargo
handling
The Government of India targets to increasing the cargo
handling capacity of major ports by two folds to reach 1.5
billion metric tonnes (MT) by the year 2012. This will be
achieved at an investment of around USD 25 billion through
public-private partnerships. A Crisil research on Indian ports
and maritime transport estimates that ports will grow by 160
per cent over the 2011-12 period.
14. GOVERNMENT POLICY & REGULATION
Policy
100% FDI under the automatic route is permitted for port
development projects
100% income tax exemption is available for a period of 10
years
Tariff Authority for Major Ports (TAMP) regulates the ceiling
for tariffs charged by Major ports/port operators (not
applicable to minor ports)
A comprehensive National Maritime Policy is being
formulated to lay down the vision and strategy for
development of the sector till 2025.
15. CONT……
Among the tools used under the general regulation framework include the
following:
Tonnage Tax: These are the taxes paid by a shipping company based on
the total tonnage of its ships. It puts a tax burden of only one-two
percent, as compared to the current corporate tax of around 35 percent. It
facilitates a level playing field in the Indian Shipping Industry and increases
port profitability and makes them more competitive with foreign lines.
•Marine Charges: The old regime of marine charges has been restructured
to match the levels prevalent in neighbouring foreign ports. This will wean
away the transhipment cargo from foreign ports to Indian ports and, thus,
reduce the freight rate. Moreover, the introduction of hourly berth charges
has provided incentive to ships to leave ports immediately after completion
of discharge or loading.
•Cabotage Law: It restrains entry to the country’s coastal trade only to
national ships. In India, sections 407 and 408 of the Merchant Shipping Act
of 1958 govern it. Many marine consultants worry that protection under it
may no longer hold true with foreign shipping lines allowed to pick up to 51
percent stake in the Indian Maritime Major SCI.