Presentation on Private ports of India

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Presentation on Private ports of India

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Presentation on Private ports of India

  1. 1. PRIVATE PORTS OF INDIA PRESENTED BY ALOK KUMAR DIPAN SARKAR PAROMITA GHOSH PRABTENDU PAL RAJESWARI SAHU
  2. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.
  16. 16. http://www.unitedworld.edu.in/ Campus Ahmedabad Campus: Karnavati Knowledge Village, A/907,Uvarsad, S.G.Highway, Gandhinagar Kolkata Campus: Infinity Benchmark Tower 10th Floor, Plot - G1, Block - EP& GP, Sec - V, Salt Lake, Kolkata. Reg. Office: 407, Zodiac Square, 4th Floor Opp.

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