JNPT aims to be among top ten ports

India’s biggest container port, Jawaharlal Nehru Port in Navi Mumbai is rolling out massive expansion plans with an aim to make it as one of the top 10 container ports of the world. And Jawaharlal Nehru Port Trust (JNPT) is attempting to achieve this goal in this decade. According to reports, an estimated $8 billion is being invested to make JNPT a preferred port of call for every shipping company. This was revealed by N N Kumar, who recently assumed the position as Chairman of JNPT in a media interaction. “JNPT is set to become a mult-purpose port from a predominantly container port,” said Kumar.
Ever since its inception on May 26, 1989, JNPT has charted India’s international trade breaking several records and creating new benchmarks. It handled 56 percent of the country’s containerized cargo. As the hub port on the Western Coast of India, JNPT is currently ranked 31st among the top 100 container ports in the world. However, as the busiest gateway and hub in India, it has been constrained in the past by lack of facilities, which has impacted trade.
Among the several investments in JNPT expansion plans it is the recent investment of Rs 8,000 crore by PSA Singapore to develop its fourth terminal. This is perhaps the single largest project in India’s port sector. The project involves developing a fourth container terminal with a quay length of 2,000 metres with a capacity to handle 4.8 million twenty-foot-equivalent-units (TEUs). According to a statement by PSA Singapore, the project, scheduled to be completed in six years in two phases, will raise JNPT’s capacity to handle container traffic to 10 million TEUs by 2018-19. With this capacity addition, JNPT will be able to handle 10 million TEUs, enabling it to be ranked among the top 10 global container ports.
Bharat Mumbai Container Terminals Private Limited (BMCT), a wholly-owned subsidiary of PSA Bharat Investments Pte Ltd (which is a subsidiary of PSA International), signed the concession with JNPT to develop the terminal on a design, build, operate, finance and transfer basis. ”Located at India’s largest and premier container gateway port, BMCT will have berths with a depth of 16.5 metres, the deepest in JN Port. BMCT will be equipped with the latest technology and equipment to serve important industrial and manufacturing centres and cities in India’s largest hinterland,” PSA Singapore said in a release. “PSA will work along with JNPT to develop this very important terminal in India to cater to the increasing demand for container handling capacity, and facilitate maritime trade in India,” said Tan Chong Meng, Group CEO, PSA International.
The concession is for a period of 30 years, at the end of which PSA has to transfer the project back to the government. PSA bagged the project earlier this year by offering to share 35.9 percent of revenue. However, this is the second time PSA has bid for the project. A few years ago, PSA had offered a much higher revenue share of 50.08 percent to develop and operate the terminal, but had subsequently backed out from signing the concession agreement. PSA has to start developing the first phase two-million-tonne a year capacity addition in three-and-a-half years or at the most in five-and-a-half years. The second phase capacity expansion will kick off either after two years or within six months of the developer handling one million tonnes of throughput, whichever is earlier.
In March this year Dubai-based marine terminal operator and developer DP World began the construction of its new container terminal at JNPT. It had signed an agreement with DP World’s Indian subsidiary Nhava Sheva to build the standalone container handling facility at the port at an estimated cost of Rs 600 crore. The new 330-metre berth will add 8,00,000 TEUs (twenty foot equivalent unit) of container capacity per annum and will help ease congestion at JNPT. The project would be executed on design, build, finance, operate and transfer basis, and is slated to be completed by December 2015.
“The new development would not have been possible without the dedication and commitment of the government of India to India’s trade community. As the busiest gateway and hub in India, Nhava Sheva has been constrained in the past by lack of facilities, which has impacted trade. We at DP World are proud to bring new capacity to this vibrant city and the fast growing economy of India,” said Sultan Ahmed Bin Sulayem, Chairman, DP World about the new project. “For the last five years, India’s premier port has been in critical need of capacity with container trade rising. The building of greater capacity is part of the port’s long term vision. Nhava Sheva (India) Gateway Terminal will provide the immediate relief that the trade community urgently requires and we at DP World are fast tracking the project to commence operations as early in 2015 as possible and we have already placed the order for the cranes that will be installed,” said Anil Singh, senior vice president and managing director, DP World Subcontinent.
JNPT already has APM Terminal and DP World. Now with PSA on board it is only a demonstration of global terminal operators’ confidence in India’s port sector. Media reports suggest that India’s growing port sector is expected to witness some big ticket merger and acquisitions (M&A) in 2014 as more and more investors start viewing the space as a high-return venture.
For the fiscal 2013-14 JNPT managed to maintain the throughput despite global slowdown in the shipping industry and despite labour problems at two of its terminals. At 4.16 million TEUs compared to 4.26 million TEUs in the previous year, there was a decline of 2.29 percent. 