Privatization of terminals
India’s long coastline includes13 major ports and more than a hundred minor Ports spread in the coastal states of Gujarat, Maharashtra, Goa, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Orissa, and West Bengal. Of these, less than halfare operational. Major Ports are under thr control of the central government whereas Non-Major Ports (including private ports) are under the purview of State Governments.
Until the economic liberalization in the early nineties, the development of the port sector in India was mostly a monopoly of the central government. Almost two-thirds of the port cargo handling capacity and majority of the shipping tonnage was established during between independence and the liberalization phase. The emphasiswas on self-reliance and import substitution which constrained the development of trade.
The policy enabled Major Ports to build up capacity signify cantly. However efficiency and productivity were a cause of concern. Most critical efficiency parameters such as turnaround time, pre-berthing time, output per ship-berth-day etc. were performing at below acceptable levels.
After economic liberalization was initiated, the government recognized the need for private investment and expertise. A new regime was formulated to enable private sector participation in ports which assumed a more facilitatoryrole with respect and seeking to achieve performance on par with international ports. Severalnew foreign and domestic private players entered the sector. These included container shipping giants such as Maersk and DP World.
The new NSICT terminal at Nhava Sheva managed by P&O (Now DP world) heralded a new dawn in the privatization of container terminals in India. The terminal achieved very high traffic growth ratesandmanifold improvements in operational efficiencies. This had a cascading on the port sector. For example, the average daily output at JNPT’s private terminals in 2007-08 exceeded the port-operated terminal by 11 per cent. Likewise, output per ship berth-day was significantly higher at Chennai and Tuticorin, where the container terminals are being operated by private players.
Thanks to the PPP policy, a number of private terminals on Build-Operate-Transfer (BOT)basis came on stream in ports all over the country including solid bulk terminals,container terminals and liquid bulk berths. Presently, more than 70 per cent of the total container traffic is being handled at the private terminals.
In 2006, the government of India formulated the National Maritime Development Programme (NMDP) to facilitate private investment, improve service levels and promote competitiveness in ports. 276 schemes and projects, with investment of Rs55804 crores until 2011-12 were identified under the NMDP with focus on:
• Deepening of channels and berths
• Procurement of equipment
• Berth construction
• Connectivity Infrastructure
• Others
The size of investment needed was an important factor for the private sector participation in the sector. As on 30 June 2009, Rs4529 crore worth of projects have been completed. During fiscal 2009-10, an investment of Rs20000is proposed to be awarded to the private players throughPPP arrangements.
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