Smart Drive: Port cities and asset management

Port cities and asset management

Indian ports are exploring smart and sustainable solutions for improving their performance and efficiency. Besides an increased focus on smart asset management in port operations, new smart port cities are also being planned.

Smart port cities

A smart port city is a recent concept in town planning that has gained traction following the increase in industrial activity. A smart port city uses the latest technology, thereby creating an urban centre that is not only habitable and environmentally sustainable but also flourishes economically. To fulfil the needs of such a city, intelligent port management is required for reducing energy consumption, increasing economic efficiency and ensuring environmentally sustainable development.

These benefits lead to a sound balance between environment conservation and economic development. Unique features such as reduced consumption of conventional energy by making greater use of renewable sources, and implementing smart, innovative and eco-friendly mobility solutions are some of the characteristics of smart port cities. Increasing economic efficiency through the construction of intelligent infrastructure and the optimisation of cargo movement also make smart port cities distinct.

The development of smart port cities in India has recently been in focus, given the plans for the development of Paradip and Kandla as smart port cities. Apart from these two major ports, Visakhapatnam and Cochin also have enormous potential for development. Among non-major ports, Mundra is equipped with updated infrastructure and hence is a possible choice for a smart port.

While being akin to the smart cities concept, smart port cities aim at development with a greater emphasis on traffic, logistics and environment management. For this purpose, ports need to take development and modernisation initiatives, and these should be along with the development of evacuation corridors.

Certain factors such as berth and infrastructure productivity; capacity for receiving large vessels; level of automation; quality, safety and security of facilities; total energy consumption and use of renewable sources of energy; pollution levels; water and waste management; and environment management systems need to be benchmarked for providing detailed criteria for the smart port concept. For these parameters, improvements should be made incrementally rather than targeting very high levels to begin with. The problems on the ground should be identified and solutions devised to efficiently resolve the issues. However, the development of smart port cities is likely to face a number of problems – very large investment requirements; issues relating to collaboration between port authorities, government agencies and citizens; and hinterland connectivity.

Smart asset management

Asset management involves balancing infrastructure system costs, opportunities and risks with the desired performance level of assets, to achieve business goals and objectives. The concept of asset management has evolved in recent years to include various aspects of planning and budgeting during the procurement of assets and their operations and maintenance. In the case of companies handling a large number of assets, an integrated approach to asset management is crucial. This is because asset management combines financial, project, and operations and maintenance under a single umbrella. To ensure efficient asset management, port companies need to focus on the nuances of asset strategy and planning, asset creation and acquisition, asset operations and maintenance, and asset renewal.

The whole-life management of infrastructure assets is a growing priority for ports. This is because ports have very large asset bases, which need to be managed keeping in view both current and future requirements, while ensuring operational efficiency. Ports face growing challenges such as ageing infrastructure, capacity bottlenecks and a changing economic environment.

In order to overcome these challenges, port companies need to undertake effective asset management programmes. This requires strengthening of the organisational set-up with a dedicated team that collects, collates and analyses information on asset management, thus enabling companies to undertake efficient long-term asset management. Further, enhancing asset management systems by practices and tools for robust investment planning and decision-making is also extremely important. An example is the integration of service management across all operations, right from evacuation till the marine site. Modelling relationships between the existing and required infrastructure will assist in undertaking asset management in a scientific way. There is also a need to prioritise the capital available on the basis of certain criteria for prudent investment.

A key concern for ports is that it is not possible to get the requisite throughput, even when traffic is available. By addressing the factors mentioned above, major and non-major ports can improve asset utilisation.

Based on presentations by Devdatta Bose, Group Sector Head, and D.G. Sonwane, Senior General Manager, Tata Consulting Engineers; and Biswanath Bhattacharya, Partner, Infrastructure and Government Services, KPMG Advisory Services