In the past year, there have been significant developments in Gujarat’s port sector, with steps being taken to revise the existing policies. The period was also marked by the award and completion of key capacity augmentation projects. A number of initiatives were also taken on the technology front.
A look at some of the key developments in the state’s ports and shipping sector…
- During 2015-16, ports in the state (major and non-major) handled a total traffic of 439.88 million tonnes (mt), accounting for 41 per cent of the traffic handled across all the ports in the country. Sikka port handled the maximum traffic at 128 mt, accounting for 29 per cent of the total traffic handled in Gujarat. It was followed by Mundra port, operated by Adani Ports and Special Economic Zone Limited (APSEZL), which handled 109.02 mt of traffic. Of the total traffic handled at major ports in the country, Kandla handled the maximum at 100.05 mt, accounting for a 16.5 per cent share.
- In order to revise the two-decade-old port policy, the state government has asked the Gujarat Maritime Board (GMB) to revisit the policy with the target of sustaining the present share of GMB’s traffic in India’s maritime trade. The government has appointed EY as consultants to draft the new policy which is expected in April 2017. As part of the policy, locations for new ports will be identified and the concession period for greenfield ports will be increased. The policy will promote coastal shipping, green port development, and the setting up of a maritime university. The policy will also encourage the deployment of advanced technologies for mechanised cargo handling and integrated port management systems.
- The year witnessed the completion and award of several major projects. Gujarat Pipavav Port Limited completed its capacity augmentation project, increasing its container handling capacity from 0.85 million twenty-foot equivalent units (TEUs) to 1.35 million TEUs. The cost of the project was about Rs 4.6 billion. Besides, in March 2016, a UAE-based bunker supplier, the Gulf Petrochem Group, began bunkering operations at Pipavav.
- In a big move, the Kandla Port Trust (KPT) awarded the contract for the development of a container terminal at the port. The project was awarded to International Cargo Terminals and Infrastructure Private Limited following which a special purpose vehicle (SPV), Kandla International Container Terminal Private Limited (KICTPL), was formed for the execution of the project. KPT signed a concession agreement with KICTPL in February 2016 for the development, operation and maintenance of a container terminal at Berth Nos. 11 and 12 at the port. The terminal will have a length of 545 metres and a capacity of 22.8 million tonnes per annum (mtpa). The estimated cost of the project is Rs 1.59 billion.
- A contract was also awarded for India’s first floating liquefied natural gas terminal at Jafrabad. The terminal is being developed by Swan Energy Limited in a joint venture (JV) with Exmar of Belgium. The terminal, with a capacity of 10 mtpa, is expected to be built at a cost of Rs 56 billion and the project received approval from GMB in December 2016. Swan Energy Limited through its 100 per cent subsidiary, Swan LNG Private Limited, has subcontracted the marine and dredging work for the terminal to Abu Dhabi’s National Marine Dredging Company.
- There was also some movement on the grant of environmental clearances to projects. The Ministry of Environment, Forest and Climate Change (MoEFCC) granted the environmental and coastal regulation zone (CRZ) clearances for the Phase III expansion of Dahej port. The port is being developed by Adani Petronet (Dahej) Port Private Limited, a JV between the Adani Group and Petronet LNG Limited, and involves an investment of Rs 4.64 billion.
- The Expert Appraisal Committee (EAC) has recommended that the MoEFCC grant environmental and CRZ clearances to Reliance Industries Limited (RIL) for the expansion of its jetty facility in Jamnagar, Gujarat. The clearance has been recommended for handling chemical and petrochemical products at the jetty. RIL has proposed the expansion of its existing liquid jetty by setting up an additional berth to handle cargo of about 8 mtpa. The cost of the project is estimated to be Rs 7.5 billion.
- Some progress was seen on the technology front too. APSEZL-operated Mundra port inaugurated a new digitised port community system in February 2016. The new system will enable the quick dispatch of import-laden units, minimise dwell days of rail import containers, facilitate paperless and error-free documentation and electronic clearing/submission of transfer protocols. In another initiative by the Mundra International Container Terminal (MICT), a technically advanced terminal operating system – TOS ZODIAC – was installed. The operating system is expected to facilitate ease of doing business and enhance the efficiency of the terminal operations .
- APSEZL took delivery of three new rail-mounted gantry cranes, for its container terminal in Mundra. The installation of the new cranes is a part of the initiative to enhance handling capabilities of inland container depot-bound containers at Mundra port. The cranes have a capacity of 65 mt, twin lift spreaders and four high-stacking capabilities in addition to the technologies incorporated for safety and operational efficiency.
- On the financial front, APSEZL raised Rs 13 billion through the allotment of non-convertible debentures (NCDs) in November 2016. The company issued 13,000 rated, listed, secured, taxable, redeemable NCDs with a face value of Rs 1,000,000 each, on a private placement basis. The NCDs will be listed on the wholesale debt market segment of the Bombay Stock Exchange.
- A number of initiatives were also taken in the shipping sector. The Gujarat government announced the Ship Recycling Policy, 2016. The policy, which has been framed by the state government and GMB, aims to revive the ship recycling industry at Alang. The government has rationalised most of the charges payable by plot holders and allowed them the flexibility to resize, realign and readjust plot sizes as per their requirement and vessel size. Earlier, ship-breakers did not have the permission to dismantle vessels in plots of particular sizes. As per the new policy, the permission for the plot will be given for a long-term lease of 10 years, instead of five years as in the past.
- Two ship recycling yards in Gujarat received environmental clearance from the MoEFCC during the period under review. Clearance was given for the upgradation of the existing ship recycling yard at Alang Sosiya at an investment of Rs 16.3 billion. Further, APSEZL received environmental and CRZ approvals for setting up a ship recycling facility at its port in Mundra. The proposed facility, spread over 40.7 hectares, will recycle ships of up to 16,000 light displacement tonnage or 80,000 deadweight tonnage.
- Meanwhile, the Ministry of Shipping (MoS) sanctioned the first instalment of Rs 100 million to GMB for coastal community development under the Sagarmala programme. GMB will utilise the funds for capacity building and safety training of workers involved in ship recycling activities at the Alang Sosiya recycling yard. The total project cost, which is estimated to be Rs 300 million, will be sanctioned over a period of three years.
- Reliance Infrastructure Limited (RInfra) acquired the management control of Pipavav Defence and Offshore Engineering Company Limited in January 2016. RInfra owns a 36.5 per cent equity stake in the company which has been renamed Reliance Defence and Engineering Limited.
- In the past year, many new shipping services started in Gujarat. Sima Marine India Private Limited, a subsidiary of Dubai-based Simatech Shipping LLC, launched coastal container shipping services in India covering four ports – Cochin, Mundra, Goa and Mangalore. Further, Kawasaki Kisen Kaisha Limited, Japan, has upgraded two of its services, with additional calls at Pipavav port (INDFEX-1) and Mundra port (CIX-2). Wan Hai Lines Limited also commenced operations of new shipping services, CHS3, from Japan to India. CHS3’s maiden voyage commenced from Osaka port on May 30, 2016 to Nhava Sheva and Pipavav in India.
- Coastal shipping in the state also received attention. Kandla port started coastal roll-on, roll-off (ro-ro) services at the port. The first vessel, MV Dresden, with a gross registered tonnage of 37,237 tonnes, berthed at the port on September 30, 2016.
- Meanwhile, the shipping ministry has released Rs 585 million as the first instalment of grant-in-aid to GMB for dredging works for new ro-ro ferry services between Gogha and Dahej, in the Gulf of Khambhat. The total project cost is estimated to be Rs 2.34 billion, of which 50 per cent will be funded by the central government under the Sagarmala programme.