“STUDY OF PORT PERFORMANCE IN INDIA: - MAJOR PORTS & MINOR

PORTS”

OUTLINE OF THE PRESENTATION

OBJECTIVE OF THE REPORT. INTRODUCTION TO INDIAN PORT

SECTOR. INDIAN PORT PERFORMANCE –

ANALYSIS AND. INTERPRETATION. FINDINGS AND CONCLUSION.

OBJECTIVE OF THE STUDY

The main objectives of this study are: - To analyze the efficiency of Major and

Minor Ports in the country. To identify the factors affecting the

Performance of the Major and Minor Ports.

PORT

The United Nations Conference on Trade and Development (UNCTAD) defines seaports as - interfaces between several modes of transport and thus, they are centres for combined transport. Furthermore, they are multi-functional markets and industrial areas, where goods are not only in transit but are also sorted, manufactured and distributed. As a matter of fact, seaports are multi-dimensional systems, which must be integrated within logistic chains to properly fulfil their functions.

An efficient seaport therefore, requires, besides infrastructure, superstructure and equipment, adequate connections to other transport modes, a motivated management and sufficiently qualified employees”.

INDIAN PORT SECTOR

Classified as Major or Minor Ports on the basis of ownership.

The Government of India wholly owns the 13 Major Ports while out of around 200 Minor Ports, most are owned and governed by the respective State Maritime Boards while some are owned by the Private players which are governed by the respective State Maritime Boards.

From these 13 Major Ports, 12 ports are governed by the Major Port Trust Act and 1 port viz. Ennore Port Limited is administered by the provisions of Companies Act.

CONT....

Accounts for around 95% of volume and 70% by value of the country’s overall international trade.

CONT....

Like any other industry its activities are influenced by: External Environment: Social, political,

economic and technological. Task Environment: Importers, exporters,

clearing and forwarding agents and other users of port.

Competitive Environment: Other ports and other modes of transport.

Public Environment: Government and other public bodies.

STRENGTHS

High growth High market Share Financial means available Some Ports located in strategic location

WEAKNESSES

Old infrastructure Low drafts Old and inefficient cargo handling systems Poor hinterland connections Rigid institutional frame work High tariffs Poor quality of services / business attitude Overstaffing Lack of capacity Lack of extension possibilities

OPPORTUNITIES

Introduce competition Huge Indian markets, and land locked

countries in the North Improve organization: training, IT, downsizing Port reform – more autonomy PPP other than BOT Invest in infrastructure, lower cost for port

users Invest in total transport chain

THREATS

Private Ports Minor Ports Bureaucracy Time

THE AGENDA FOR THE PORTS

Develop Two New Major Ports one each on east and west coasts.

Full mechanization of cargo handling and movement.

Major Ports to have draft of not less than 14 metres and hub ports 17 metres.

Identification and implementation of projects for rail, road and inland waterway connectivity to ports.

Development of two hub ports on each of the West and the East coasts

POLICY MEASURES

New Land Policy for Major Ports. New Policy on captive berths. New Policy on dredging. Shifting of transshipment of Indian containers

from foreign ports to Indian ports. Policy on co-operation and competition

amongst Indian Ports. Establishing ‘Indian Ports Global’ for overseas

investments by Indian Ports.

PRIVATE SECTOR PARTICIPATION

Leasing out existing assets of the Port. Construction/creation of additional assets, such as:

Construction and operation of container terminals. Construction and operation of bulk, break bulk, multipurpose and

specialized cargo berths. Warehousing, container freight stations, storage facilities and tank

farms. Cranage/handling equipment. Setting up of captive power plants. Dry docking and vessel repair facilities.

Pilotage. Captive facilities for port based industries. Leasing of equipment for port handling and leasing of floating

crafts from the private sector.

PROBLEMS

The framework in vogue does not describe the dimensions namely the Efficiency and the Vessel’s Economy and their causality to enable the port planners to be effective. It instead suggests traditional strategic implementation such as cost control, prices reduction, survival on subsidies and grants and creation of assets based on forecast. The approach should have been market driven, and customer focused. It aims at dealing with different variables instead of identifying and managing the under lying dimensions.

ANALYSIS AND INTERPRETATION

The volume of seaborne cargo traffic handled by ports is mainly shaped by the levels and changes in both the global and domestic activity. Cargo traffic at India’s 12 major ports during 2012-13 at 545.79 million tonnes declined by 2.6% compared with 560.19 million tonnes handled in 2011-12.

The year 2012-13 witnessed a drop in total cargo traffic of 2.6% over the preceding year and a shortfall with respect to the target set for 2012-13 by 9.2%.

CONTD....

Port Efficiency : - Average Turn-Round Time (TRT) Average Pre Berthing Detention Time

(PBDT) Average Output Per Ship Berth-day

AVERAGE TURN-ROUND TIME (TRT) has improved significantly during the past

one and half decades for all the major ports. Average TRT for all major ports improved from 8.10 days in 1990-91 to 3.63 days in 2005-06. Thereafter the TRT has increased steadily to 5.29 days in 2010-11. In 2011-12, the average TRT declined to 4.56 days and further to 3.94 days in 2012-13. The TRT varied in a range between 1.64 days at Cochin Port to 6.40 at Kandla.

Average Pre Berthing Detention Time (PBDT)

The average overall pre berthing detention time for all major ports has declined from 2.2 days in 1990-91 to 1.63 days in 2008-09. However, in 2009-10 and 2010-11, the average PBDT edged up to 2.16 days and 2.32 days respectively. In contrast, average PBDT on port account has seen a sharper decline from 2.10 days in 1990-91 to 0.50 day in 2010-11. Average PBDT on port account remained same at 0.50 days in 2011-12 and 2012-13. Average PBDT on port account was more than a day (2.05) at Kandla during 2012-13.

Average Output Per Ship Berth-day

During the last 20 years this indicator has seen a tremendous improvement. Average Output per Ship-berth day has increased to almost four times from 3,372 tonnes in 1990-91 to 13149 tonnes in 2012-13 for major ports. However, average output per ship berth day is marked by substantial variation across major ports ranging from a high 26308 tonnes in case of JLN port to a low of 2084 tonnes at Kolkata Dock System during 2012-13. This variation reflects the type of cargo being handled, level of mechanization and labour practices

THE MAIN FACTORS THAT HAVE LED TO INEFFICIENCIES IN THE INDIAN PORTS

Most major ports were originally designed to handle specific categories of cargo.

Equipment utilisation is very poor both because equipment is obsolete and poorly maintained.

Over staffing Time consuming lengthy Documentary

procedures Port access facilities and arrangements for

moving inbound and outbound cargo are inadequate and unsatisfactory

CONT....

A land use plan was developed in most ports. However, a clear vision on port planning and phased development is lacking for some ports

High BOF ‘Berthminded’ ports.

SUGGESTUONS

Enhance competitiveness Increase capacity Rejuvenate services Strengthen its supply chain and optimize

resource utilization Renovate infrastructure and facilities Remove bureaucracy Reduce cost Create new customer base

CONT....

Improve port organisation. Liberalisation Decrease the revenue share in BOT

contracts in order to attract terminal operators

CONCLUSION

The present needs are: There should be an incentive to more

competition amongst the Major Ports. Delegation of powers and responsibilities. Autonomy in tariff setting and investing. Fast decision making process. Operational freedom. Professionalism

CONT....

Apart from a few Major Ports, the financial position of the rest of the Major Ports is very good. Funds available for investments by ports: Over Rs 20.000 Cr in 2014. Huge borrowing capacity over Rs 40.000 Cr

in 2014.