Operator Perspective: Key concerns and proposed recommendations

Key concerns and proposed recommendations

Over the past few years, the Indian port sector has witnessed a number of positive changes. The Sagarmala programme, with its focus on port-led development, has brought in much optimism in the sector. Overall, the policy thrust in the past few years has been positive. A great level of simplification has been achieved in terms of documentation and regulation including in the customs area. Despite the recent progress, the sector still faces several issues and challenges.

Operators’ viewpoint – Issues, concerns and recommendations

Considering the geographic location of ports and the fact that the ports compete with each other for handling cargo, they cannot be looked at as just service providers. There is a need to view ports as not just cargo handling service providers or facility providers but as complete solution providers. At present, this lacuna is the prime concern of port operators.

There is also a need to maintain a balance between the development of new ports and terminals, adding capacity at existing ports and increasing the efficiency of these ports. Overall, the current capacity is sufficient to cater to the growth in traffic for the next four-five years. Increasing productivity at the existing ports before creating new capacity is the need of the hour. Similarly, it is important to relook at the existing resources. Greater utilisation of current resources is critical.

A careful analysis of the scope of projects keeping in mind the future demand of the commodities to be handled at proposed berths/terminals is another must. After investing both time and funds in a project, changing the traffic patterns can be challenging for the private operator. The Jawaharlal Nehru Port Trust is a classic example of this. The port was designed for handling the import of foodgrains. However, when the port was commissioned for commercial operations in 1989, the country had become an exporter of foodgrains. Similar challenges were also faced at Chennai port with respect to coal and iron ore cargo.

Achieving an optimal modal mix is another recommendation by operators. Finding the right modal mix is not just about ensuring a shift from road to rail or rail to waterways, but to know which mode is to be used where. With regard to waterways as a mode of transportation, despite having an extensive network of waterways in the country, the potential of this relatively cheap and environment-friendly mode is yet to be fully exploited. The total cargo transported through inland waterways is less than 1 per cent of the total inland traffic in the country. Though a concerted effort by the government to increase its share in cargo handling is a step in the right direction, these measures need to be expedited.

The government has given a strong push to port modernisation, mechanisation and digitalisation, with a number of ease of doing business initiatives, and this augurs well for sector growth. In light of the increased traffic volumes and the ever-increasing competition among government-owned ports and private ports, digitalisation and greater technology adoption across different port services have been playing a greater role in improving connectivity among port and shipping stakeholders.

Private participation in the sector has increased in the past few years. The landlord model of engagement has been more prevalent at the major ports as compared to the service port model. Nevertheless, there is wide scope for private participation in the sector. It is important to establish a level playing field for port operators to attract greater participation from private players. Issues such as delays in land acquisition and obtaining environmental and coastal regulation zone clearances are key challenges in the timely implementation of infrastructure projects. Environmental challenges need to be looked at differently for the port sector, and therefore a special cell needs to be created to deal with port projects only.

Net, net, the central government’s vision of making the country a $5 trillion economy by 2024-25 is challenging but not unachievable. Keeping in mind that the maritime sector accounts for about 90 per cent of the export-import trade by volume and 70 per cent by value, it is expected to play a pivotal role in realising the dream. w

Based on a panel discussion among Rajiv Agarwal, Managing Director (MD) and Chief Executive Officer, (CEO), Essar Ports; Gautam Dey, Nodal Officer, Cruise Terminal Project, India, Mumbai Port Trust; Krishna B. Kotak, Chairman, J.M. Baxi Group; Arun Maheshwari, Joint MD and CEO, JSW Jaigarh Port, JSW Infrastructure; and Sanjay Sethi, Chairman, Jawaharlal Nehru Port Trust; at a recent India Infrastructure conference