At a time when the Covid-19 pandemic severely disrupted supply chains across the country, the Jawaharlal Nehru Port Trust (JNPT) ensured the delivery of vital goods by remaining fully operational. Besides, the port has been taking a plethora of initiatives to maintain its dominant position in container handling. In an interview with Indian Infrastructure, Sanjay Sethi, IAS, chairman, JNPT, shares his views on the port’s success stories, various digitalisation and modernisation initiatives undertaken, expansion plans and the steps taken to deal with the pandemic. Excerpts.…
How has JNPT contributed to India’s growth story over the years?
Over the past 32 years, JNPT has been continuously evolving and upgrading to improve on its operational efficiency parameters. In the process, the port has been consistently improving its volume and dwell time by implementing many trade-friendly measures. Continuous growth and expansion have helped JNPT maintain its position in handling container cargo.
Among many firsts at JNPT, the Nhava Sheva International Container Terminal was India’s first public-private partnership initiative in the port sector in July 1997, when JNPT awarded build-operate-transfer concession to the terminal. Also, the fourth container terminal project marks one of the largest foreign direct investments (FDI) in infrastructure projects in India. We benchmark our services against the best ports in the world and are constantly evolving to meet global market demands.
What has been JNPT’s response to the Covid-19 pandemic?
Last year, when the pandemic struck the world, one of the few sectors that could help the ecosystem was the ports and logistics sector. The critical role played by the Indian ports, logistics and supply chain sectors in the country’s economic growth story cannot be understated. Indian ports ensured the availability of essential goods to sustain national and international needs. By remaining fully operational at a time when numerous industries came to a complete standstill, JNPT continued its delivery of vital goods such as medical supplies, fuel and food items during difficult times. In spite of the various challenges faced during last year, we achieved a few important milestones. The most significant amongst them was the opening of the new centralised parking plaza and the special economic zone (SEZ).
What is the importance of developing world-class ports? What are JNPT’s expansion plans?
Today’s era is that of mega-ships, enormous models of engineering ingenuity, carrying more cargo than ever before at 10-15 per cent lower operational costs and forcing the world to move towards mega ports. The cost of not creating mega ports is higher than creating them.
As part of the Sagarmala vision, India’s cargo traffic handling capacity will be enhanced from 1,550 million tonnes per annum (mtpa) to 3,000 mtpa by 2025. In order to fulfil the need for handling deep draught ships, JNPT is also developing a new world-class mega port with an all-weather deep draught facility at Vadhavan, near the west coast of Maharashtra, to serve increasing export-import trade. It will be developed as an all-weather, all-cargo port, which will facilitate the berthing of modern ultra-large container vessels. In February 2020, the union cabinet approved the setting up of the country’s 13th major port at Vadhavan in Maharashtra at a total cost of Rs 655.45 billion and with a natural draught of 20 metres. The new port has a potential to cater to the vast hinterland region covering the states of Maharashtra and Gujarat, the western parts of Madhya Pradesh and north Indian states. The proposed port will also cater to the spillover traffic from JNPT, once its planned capacity of 10 million twenty-foot equivalent units (TEUs) is fully utilised. The development of this port will enable berthing of container vessels of 16,000-25,000 TEU capacity, giving the advantage of economies of scale and reducing logistics costs. India is expected to break into the list of countries with the top 10 container ports in the world with the development of the Vadhavan port. Also, after completion of the 4th terminal at JNPT, which is anticipated to increase its capacity up to 10 million TEUs by 2025, it will stand as the 17th largest container port in the world.
The fourth container terminal is being developed in partnership with the Port of Singapore Authority. It is expected to cost Rs 80 billion and will be funded through 100 per cent FDI. Work on Phase I with a capacity of 2.4 million TEUs was put into operation in December 2017 and when fully operational post the completion of Phase II, it will enhance our capacity to 10 million TEUs.
JNPT developed the multi-product special economic zone (SEZ) by investing Rs 5.65 billion in its owned freehold land of 277 hectares at Navi Mumbai, 6 km southeast from the port. The allotment of land for the industry for 60 years lease is done through e-tender-cum-e-auction process as per policy guidelines for Land Management of the Government of India. A total of 162 hectares land in JNPT SEZ is to be allotted and till date through various e-tender process 65 hectares of land is allotted to 26 micro-small- and medium-enterprises and two free trade warehousing units. Recently, out of this 28 units in JNPT SEZ, six units have generated their first export invoice from JNPT SEZ and are declared as operational SEZ unit. Thus, JNPT has become the first multi-sector port-based operational SEZ, PAN India. This will set a new benchmark for port-led industrialisation.
In continuation of the JNPT SEZ success story, Hindustan Infralog Private Limited, a joint venture between DP World and the National Investment and Infrastructure Fund (who is the successful bidder for two FTWZ plots in JNPT SEZ) has announced an investment of Rs 10 billion to develop the Nhava Sheva Business Park, a free trade warehousing zone at JNPT SEZ. The project is taken up in phased manner and first phase will be completed by the end of 2021 and will provide a seamless experience for both domestic and international traders at JNPT and will be boon for the stakeholders of JNPT for their trading and warehousing activities.
In addition to this, JNPT is developing dry ports in the hinterland of Maharashtra at Jalna, Wardha and Nashik, based on a hub-and-spoke model for cargo clearance and aggregation, extending hinterland connectivity. To meet the growing demand for liquid cargo, JNPT has undertaken a project to develop a liquid jetty of 4.5 mtpa capacity at a cost of Rs 1.81 billion. The port also commenced commercial operations at the newly built coastal berth on July 9, 2021, in order to give momentum to coastal shipping. Besides, JNPT is also carrying out a road widening project. The port has invested Rs 30 billion for the project and this will be a major facilitator in JNPT’s growth plan. All these projects will not only accentuate JNPT’s capacity and efficiency in business but will also provide employment and livelihood to the local community, and thus help in inclusive development.
How are the various EoDB measures transforming JNPT?
Aligning with the direction of the Ministry of Ports, Shipping and Waterways, the port has initiated a number of activities under the ease of doing business (EoDB). JNPT had adopted a three-pronged approach – improvement of infrastructure, simplification of processes and digitalisation of activities.
Today, more than half of the import container traffic in the port is routed through direct port delivery (DPD), enabling trade to save on logistics cost and time. The DPD model has helped reduce clearance time for bills of entry to less than 24 hours, from three to five days earlier. The port has also introduced direct port entry, a facility created exclusively for exporters to bring in export containers directly to the port, as well as inter-terminal rail handling operation (ITRHO), which aims to maximise train placement, track productivity, efficiency and cost-effective handling; reduce dwell time of import inland container depot (ICD) boxes, connecting export ICD boxes to their respective terminals on time; and increase the rail quotient. Overall, ITRHO increases the rail share and volume of transshipment containers at JNPT. The port has also installed one drive-through (rail) container scanner and an integrated common rail yard facility.
Under the digital initiatives, the port has introduced a mobile app, radio frequency identification (RFID)-based terminal gate transaction, container tracking (first time in India), and e-delivery orders. The port has also adopted an RFID-based gate automation system to ensure that the gate transaction time is reduced from 10 minutes to 1 minute, besides providing a high-security profile. The port launched an upgraded version of the port community system (PCS) to enable all stakeholders to exchange data/transactions on the “PCS 1x” platform on a real-time basis. In order to bring all regulators near the port area so that operation efficiency increases and seamless trade is attained, JNPT has allotted office space to the Food Safety and Standards Authority of India, animal quarantine, plant quarantine, the textile commission and drug controller. All these ease of doing initiatives together have helped JNPT reduce cost and time for the exim trade.