JNPT maintains its rank
JNPT in Mumbai continues to maintain its rank as the top port in the country attracting investment for infrastructure development to handle increasing volume of cargo. Reji John…
In the recent union budget proposal the government has made legislative proposals to make 12 state-run ports to get corporatized, which will entail an incorporation under the Companies Act. And the news is that Jawaharlal Nehru Port Trust (JNPT), country’s largest container port, will be the first one to get corporatized as soon as the government implements the legislation.
“As the success of so-called minor ports has shown, ports can be an attractive investment possibility for the private sector. Ports in the public sector need to both attract such investment as well as leverage the huge land resources lying unused with them. To enable us to do so, public sector ports will be encouraged, to corporatise, and become companies under the Companies Act,” said Arun Jaitley, India’s minister for finance while delivering his budget speech in the parliament.
Corporatisation of ports will lead to privatisation and thereby, allow private players to leverage on the existing unutilised land resources as well as improve efficiency in operations.
The government of India is planning an ambitious programme of infrastructure and port development as part of India’s drive to develop its industrial manufacturing sector. Port investment increased substantially under the former government in 2013 with the removal of prohibitive tariffs for private investment in new terminal projects at major ports. The exemptions of smaller private ports from tariff regulations also increased their competitiveness and led to more investment in smaller facilities. The government is now looking to establish an additional five major ports across India in the next five years, supported by at least $28.7 billion in private investment.
“We are looking at foreign loans since we have a natural hedge in terms of dollar income and the rates are almost seven percent lower than the domestic rate. This would be a huge saving on our investments. We expect DP World to start partial commissioning by May 15, 2015 which would add around 400,000 TEU to our [current] total capacity of 4.5 million TEU,” said Neeraj Bansal, Deputy Chairman, JNPT.
JNPT will attract investments of over Rs 21,000 crore by 2020, making it one of the biggest investment destinations in the country. The plan to convert the existing four-lane, 45-km road connecting JNPT and the hinterland of Maharashtra into a 10-lane road is prime among them. Eight of the 10 lanes will be for trucks and other vehicles, while the other two will be elevated roads for mass rapid transport vehicles.
The problem of shipping berths at JNPT is already addressed. It has given the rights of 330 metres of quayside to DP World, which is investing around Rs 600 crore on this front. An additional terminal for development has been given to PSA of Singapore, which will invest around Rs 8,000 crore in developing it.
Another landmark project that will make JNPT even bigger is the dedicated freight corridor (DFC) between Delhi and Mumbai, which is also one of the most important projects under the ‘Make in India’ initiative of the government. DFC will see JNPT traffic multiply several fold. JNPT will also develop a multi-modal hub. The port authority is also developing a special economic zone (SEZ) on a 277-hectare land.
In January this year, Nitin Gadkari, India’s minister for shipping announced that JNPT would develop a parallel port in Maharashtra. Subsequently JNPT made up its mind to pick Dahanu, however, it was willing to take a second look at Vijaydurg as well just in case of problems of permission being rejected on account of environment lobby or local protest.
The new port will require around 1,000 hectares. Since there will be no displacement of existing people, as no existing land will need to be acquired, the costs of any mitigation will be limited. The central government is set to grant the new port all the clearances that it might require.
That gave Maharashtra two benefits. Not increasing the draft to 18 metres at JNPT allowed the height of the proposed Mumbai Trans-Harbour Link (MTHL) to remain at the same height that was earlier proposed. If bigger ships had been allowed to come into JNPT, the height of MTHL would also have to be raised. That would mean considerably higher costs for the state. The second benefit is the state has first all-weather, deep water port. Both Dahanu and Vijaydurg offer a natural depth of 20 metres.
JNPT plans to make this port a multi-product one. It will cater to bulk, liquid and container traffic, though the focus will be on the first two. Currently, all coal, oil, food grain or any other bulk product that has to be imported or exported goes to Gujarat’s ports. The new port will be jointly owned by both JNPT (75 percent) and the Maharashtra government (25 percent).
JNPT reported a marginal increase in its cargo handling for the fiscal 2014-15 at 63.80 million tonnes. The port, which is located off the Mumbai harbour, had handled 62.33 million tonnes of cargo, including containers and liquid cargo, in the previous fiscal. In the core container segment, it reported 7.33 percent growth in traffic handled at 4.467 million standard units (TEUs), which is the highest ever single year handling. Besides, the port’s share in the overall container traffic handled in the country stood at 56.13 per cent.
JNPT has three terminals at present, among which Gateway Terminals India (GTI), a joint venture between APM Terminals and the Container Corporation of India (CONCOR) witnessed the highest traffic with a 45.06 percent share, followed by its own terminal Jawaharlal Nehru Port Container Terminal (JNPCT) at 28.97 per cent, while Nhava Sheva International Container Terminal (NSICT) operated by DP World had a share of 25.97 per cent. Of the total cargo handled by the port, share of containerised cargo was 56.93 million tonnes or 89.24 percent, liquid cargo was 6.19 million tonnes or 9.70 per cent while the remaining 0.68 million tonnes or 1.06 per cent was miscellaneous cargo in the form of dry bulk and break bulk.