The Jawaharlal Nehru Port Trust (JNPT) has shown mixed performance over the past one and a half years. The port occupied third position (after Kandla and Paradip ports) among major ports in 2015-16, with 64.03 million tonnes (mt) of cargo handled. Progress was also witnessed on the project development front. It laid the foundation stone for one of its most ambitious projects, the development of the fourth container terminal. However, during the first six months (April-September) of the current fiscal year, 2016-17, the port saw a decline of 4.49 per cent in
volumes over the corresponding period of 2015-16. At present, the port has several projects on the anvil, ranging from developing a container terminal, improving hinterland connectivity to setting up of a port-based special economic zone (SEZ). The Phase II dredging project is also under way at the port.
Performance
In 2015-16, JNPT handled around 64.03 mt of cargo compared to 63.8 mt in the previous year. Commodity-wise, containers are the predominant commodity accounting for around 90 per cent of JNPT’s traffic. The port handled more than 45 per cent of the total container traffic at major ports in 2015-16. Container volumes stood at 56.79 mt (4.49 million twenty-foot equivalent units [TEUs]) in 2015-16 (89.01 per cent share in total traffic at the port), followed by liquid bulk at 6.5 mt (10.15 per cent share).
Of the total container traffic of 4.49 million TEUs, the Jawaharlal Nehru Port Container Terminal (JNPCT) accounted for a share of 31.82 per cent (1.44 million TEUs), followed by the Nhava Sheva International Container Terminal at 22.26 per cent (0.99 million TEUs) and Nhava Sheva (India) Gateway Terminal (NSIGT) at 4.5 per cent (0.2 million TEUs). The remaining 41.42 per cent (1.86 million TEUs) was contributed by APM Terminals.
During the period April-September 2016-17, JNPT handled 30.78 mt, against 32.22 mt handled in the corresponding period of 2015-16. Though containers were the primary commodity handled, their volume declined by 4.5 per cent to 27.18 mt from 28.49 mt in the corresponding period of 2015-16.
Capacity at JNPT grew at a compound annual growth rate of 8.7 per cent during the five-year period. In 2015-16, capacity increased vastly by 12.59 per cent over the previous year with the commissioning of a stand-alone container handling facility with a quay length of 330 metres. The stand-alone terminal (NSIGT) has a cargo handling capacity of 10 mt.
The port’s efficiency levels also improved, as reflected in falling average turnaround and pre-berthing detention times. However, the capacity utilisation rate fell to 71.65 per cent in 2015-16 from 80.38 per cent in 2014-15.
On the financial front, there was an increase in total income from Rs 18.09 billion in 2014-15 to Rs 19.51 billion in 2015-16. The operating surplus also increased to Rs 9.38 billion in 2015-16 from Rs 8.37 billion in 2014-15.
Measures for ease of doing business
In the past year, JNPT has undertaken various measures to promote the ease of doing business at the port. Recently, in August 2016, Gateway Terminals India Private Limited introduced the continuous gate-in facility at the terminal for exporters. JNPT has also commenced logistics data bank services at the port from July 1, 2016. This will help importers and exporters track their goods in transit. Further, all the terminals at JNPT have eliminated the manual Form 13 and introduced the web-based e-Form 13 instead. JNPT has also extended its direct port delivery facility to all accredited clients, irrespective of their trade volume. The port trust has also commenced holding yard operations at JNPCT. The yard has been developed to ease congestion and streamline traffic to the terminal.
Ongoing and upcoming projects
JNPT is undertaking several projects to augment capacity. At present, the port has projects worth over Rs 168 billion on the anvil. These relate to the construction of a container terminal, improving port connectivity, dredging, etc.
The port is undertaking one of the biggest container terminal projects in the country – the development of the fourth container terminal. It is proposed to be developed on design-build-fund-operate-transfer basis for a concession period of 30 years. The Rs 79.15 billion project envisages a capacity addition of 4.8 million TEUs (60 mt) in two phases. The project was awarded to PSA International Pte Limited after it emerged as the highest bidder by offering a revenue share of 35.79 per cent to the port trust. The concession agreement for the project has been signed with Bharat Mumbai Container Terminals Private Limited, a special purpose vehicle of PSA International, on May 6, 2014 and on October 11, 2015, the foundation stone of the project was laid.
JNPT’s plan also includes improving connectivity to the port. To this end, it is undertaking one of the biggest road connectivity projects developed at the port so far – the widening of 43.9 km length of National Highway (NH)-4B, State Highway (SH)-54 and Amra Marg linkages to six/eight lanes along with two-lane service roads. The project, estimated to cost Rs 28.95 billion, will be executed by Mumbai JNPT Port Road Company Limited (MJPRCL). To finance the project, JNPT signed an agreement with the State Bank of India (SBI) and the Development Bank of Singapore (DBS) to raise external commercial borrowing (ECB) worth $400 million. Of the total ECB amount, $300 million will be raised by SBI, while the remaining $100 million will be raised by DBS. The loan is being provided at an interest rate of 2.025 per cent plus six-month Libor, which is approximately 3.15 per cent. While the borrowing by JNPT is for a tenor of 7.5 years, lending by JNPT to MJPRCL is for 16 years (two years for construction and 14 years for repayment).
With this, JNPT has become the first major port to raise a dollar denominated loan. According to Anil Diggikar, chairman, JNPT, “The funding by JNPT is the first of its kind for a major port and it opens up one more avenue for ports to raise funds by accessing international markets for their requirements. The project will primarily benefit and serve the needs of JNPT, as it will cater to the additional cargo which will be handled at the fourth container terminal.”
Another major project planned at JNPT involves the deepening of the existing 14 metre navigation channel to 15 metres in Phase II of the dredging project at an investment of Rs 20.29 billion. After the completion of dredging works, the port will be capable of handling fully laden ships of over 12,500 TEUs. On the mechanisation front, recently, in April 2016, JNPT signed a contract with China’s SANY Group Company Limited for the design, manufacture and supply of 15 electronic rubber-tyred gantry cranes (RTGCs). The increased fleet of RTGCs is expected to improve the efficiency and container handling throughput of the terminal.
Outlook
According to Diggikar, “JNPT is on a sustainable growth path and is looking at a cargo throughput of 10 million TEUs annually in the coming years. The port is also planning to double its capacity in the next seven years.” The commissioning of the dedicated freight corridor from Delhi to JNPT will further boost container traffic at the port.
The next few years are very crucial for the port. It needs to complete the Phase II dredging project as well as its long-delayed fourth container terminal. This is necessary to capture a significant share of cargo volumes as well as maintain its position as the premier container port and the key gateway to the west coast.