Modernization of Indian Ports

 India has been an emerging and vibrant economy with a huge market and the potential to grow as the fastest economy of the world.  This economic upsurge is one of the important drivers for the growth of Indian Ports in the years to come.  Coupled with this, the technological changes in shipping sector have triggered the growth in Indian Ports and provided stimulus for cargo handling.

Modernization of Ports

                1)  policy  initiatives   taken  by  the Government  for  increasing  the  pace  of privatization and formulation of guidelines for fixation of upfront  tariffs. 

                2)The maritime states also have come up with several policy initiatives and identified  potential locations for development of new outlets. 

      3) Thus, the major ports and non-major ports have assumed complementary roles, besides creating healthy competition which in turn enabled the sector to provide cost effective and quality service to the customers.

Future Plans

             1) Development  of  new  outlets

            2) Augmentation  of  existing  service  centres  

    3) Induction  of  state-of-the-art  cargo  handling equipment and improvement in logistics in order to meet the challenges emanating from the anticipated growth in the trade

            4) The Indian Ports are aiming at a surplus capacity of above 25% over the projected demand. 

Structural Changes

                In addition to capacity augmentation, all the major ports are aiming at bringing structural changes in the administration of the ports to improve organizational effectiveness.  To this end, 

                1) All the ports are planning towards implementing “landlord port” concept duly limiting their role to maintenance of channels and basic infrastructure leaving the development operation management of terminal and cargo handling facilities to the private sector. 

                  2)The ports are aiming at lean staff by extending information technology to the entire gamut of operations. 

PPP Mode

                Public Private Partnerships will be the preferred mode for the development of port terminals and other commercially viable activities in the  Major Ports.  The standardization of  RFQ,  RFP and MCA and the formulation of guidelines for  fixation of upfront tariffs have served to make the PPP process transparent and to give confidence to the investors. Recently a Private Group has commissioned 12 million tonnes per annum expansion at its Vadinar terminal in Gujarat at a total cost of Rs.1065 crore.  With this Vadinar Port’s capacity has gone up to 58 million tonnes per annum. Similar efforts ostensibly contribute to capacity expansion of Ports.

A Level Playing Field

                In terms of  the  Regulatory  Framework  of  the  Private  Sector  Participation  (PSP)  guidelines (1996), the ports  were directed to ensure that private investment does not result in creation of private  monopolies  and that private facilities are available to all users on equal and competitive terms.  Accordingly, it was felt that a policy may be formulated for prevention of private monopoly in the Port Sector for ensuring healthy competition amongst the private operators and smooth award of projects for capacity augmentation at the Major Ports.  Under  Section  111  of  the  Major Port  Trusts  Act,  1963  and  in  consultation  with Chairpersons of all Major Ports as well as stake holders, the following policy  has been laid down with  effect from 2.8.2010 for preventing private sector monopoly in Major Ports: “If there is only one private terminal/berth operator in a port for a specific cargo, the operator  of  that berth or his associates shall not be allowed to bid for the next terminal/berth for handling the same cargo in the same port”.

                While, the Maritime Agenda, 2010 - 20 envisages ambitious programmes to reach 3.12 billion tonnes port capacity within the next decade, a strong monitoring and feedback mechanism is very important to achieve the target