Tides of Change

The past year witnessed several developments across the maritime chain – in ports, shipping, coastal shipping, shipbuilding and inland water transport. There was progress in the promotion of ease of doing business and environment-friendly modes of transport, introduction of new technologies, project completion and stake acquisitions. Further, the government announced a gamut of long-term measures that are expected to drive growth in the sector.

Indian Infrastructure provides a snapshot of the key developments in the sector in the past year…

  • Several important policy and regulatory measures were introduced during the year. In order to create a more adaptive regime to facilitate future developments and advancements, Parliament passed the Inland Vessels Bill, 2021 on August 2, 2021, replacing the Indian Vessels Act, 1917. The bill will now be sent for the assent of the president. Earlier, in July 2021, Parliament had passed the Marine Aids to Navigation Bill, 2021. The bill aims to replace the over 90-year-old Lighthouse Act, 1927 and incorporate global best practices, technological developments and India’s international obligations in the field of marine aids for navigation.
  • With a view to promote the expansion of port infrastructure and facilitate trade and commerce, the Major Port Authorities Bill, 2020 was passed in February 2021. It aims to decentralise decision-making and infuse professionalism in the governance of major ports. Besides, the Ministry of Ports, Shipping and Waterways (MoPSW) has finalised and issued guidelines for promoting floating jetties/platforms for multiple uses. Earlier, in September 2020, the MoPSW had launched the Society for Affordable Redressal of Disputes-Ports for affordable and timely resolution of disputes in a fair manner, and enrichment of the dispute resolution mechanism with a panel of technical experts as arbitrators.
  • In the meantime, the MoPSW has issued a number of bills for public consultation. These include the Coastal Shipping Bill, 2020; the Merchant Shipping Bill, 2020; the Indian Ports Bill, 2020; and the Dredging Guidelines for Major Ports, 2020. The shipping ministry has also issued draft guidelines for floating jetties for harbours, marinas and fish landing facilities, for public consultation.
  • The shipping ministry has been undertaking requisite efforts to move state-run ports from the “trustee” set up to an “authority” model of governance. To this end, the MoPSW has prepared a list of seven operational cargo berths run by the major ports that will be privatised through the public-private partnership (PPP) route in 2021-22. In a welcome development, the port industry’s major private players such as Adani Ports and Special Economic Zone Limited (APSEZL), Essar Ports, the JM Baxi Group, DP World and APM Terminals Management BV have shown interest in this Rs 25 billion plan.
  • A number of modernisation, mechanisation and digitalisation initiatives were taken at the major ports to promote EoDB. In July 2021, the Deendayal Port Trust signed an agreement with Central Electronics Limited for implementation of a radio frequency identification (RFID)-based access control system in the port.
  • The country’s largest container handling major port, the Jawaharlal Nehru Port Trust (JNPT) has also undertaken a gamut of initiatives to promote EoDB at its terminals. In June 2021, JNPT inaugurated two mobile X-ray scanners to enhance efficiency and reduce import dwell time at the Nhava Sheva International Container Terminal, Jawaharlal Nehru Port Container Terminal (JNPCT) and APM Terminals Mumbai. Meanwhile, the MoPSW is implementing an enterprise business system project at five major ports (Mumbai, Chennai, Deendayal, Paradip and Kolkata [including Haldia]) to provide a digital port ecosystem.
  • In order to facilitate direct movement of containers from factories without intermediate handling at any container freight station, a state-of-the-art direct port entry facility at V.O. Chidambaranar port was inaugurated in October 2020. Meanwhile, PSA Mumbai, in collaboration with ODeX India Solutions, has launched a digital online payments solution for its direct port delivery customers.
  • The year 2020 saw a significant increase in the adoption of technological initiatives. All maritime stakeholders, from major port trusts to private port and berth/terminal operators and customs authorities, did not leave any stone unturned to sail through the crisis situation on the back of technology. Key initiatives from 2020 include extension of the services offered by National Industrial Corridor Development Corporation Limited Logistics Data Services to Nepal and Bangladesh for installing RFID readers at the integrated checkposts at the India-Nepal and India-Bangladesh borders; launch of an indigenous software solution for vessel traffic services and vessel traffic monitoring systems; deployment of the Navis N4 terminal operating system at APM Terminals Mumbai, JNPT; upgradation of the navigation and vessel manoeuvring training system at JNPT; introduction of additional features on the logistics data bank portal; and rolling out of Phase II of the pan-Indian faceless assessment under the ambit of Turant Customs.
  • Several new projects were also inaugurated during the year. These include a modern dry dock at Deendayal port; the country’s first floating storage and regasification unit at H-Energy’s terminal at Jaigarh port; a new inter-terminal route connecting the Bharat Mumbai Container Terminals with all the other four container terminals of JNPT; a small-scale liquefied natural gas terminal at Hazira port; a new centralised parking plaza at JNPT; a mobile X-ray container scanner facility at JNPCT; and a 220/333 KV mobile unit sub-station at the JNPT yard.
  • The non-major ports, in their effort to outperform the government-owned ports, have been undertaking a plethora of initiatives to boost cargo handling. As a result, Mundra port has surpassed JNPT to become the largest container handling port in the country. The APSEZL owned and operated port handled 0.97 million twenty-foot equivalent units (TEUs) during April-June 2020-21, as compared to 0.85 million TEUs handled at JNPT.
  • APSEZL, the country’s biggest private port operator, has been on a stake acquisition spree for the past one year. Having completed three big acquisitions with a combined value of Rs 146.59 billion, the private operator has been on the prowl for more, as other port promoters have been looking for cash during the pandemic. In February 2021, Adani Ports completed the acquisition of Dighi Port Limited for a consideration of Rs 7.05 billion. Then, in March 2021, APSEZL acquired the 31.5 per cent stake held by Windy Lakeside Investment Limited in Gangavaram Port Limited (GPL). Following this, the company signed an agreement to acquire a 58.1 per cent stake in GPL on March 23, 2021. During the same month, APSEZL signed an agreement with Vishwa Samudra Holdings Private Limited to acquire the latter’s 25 per cent equity stake in Adani Krishnapatnam Port Limited at an enterprise value of Rs 28 billion. With this, APSEZL’s stake in the port will increase from 75 per cent to 100 per cent.
  • Progress was also registered in the development of greenfield ports. In June 2021, the Gujarat government approved the development of a greenfield port at Nargol, south Gujarat, via PPP with an extended build-own-operate-transfer period of 50 years. The state government has also given in-principle approval for the development of a new jetty worth Rs 1.92 billion at Navlakhi port. The other greenfield port projects that received requisite approvals during the past year include a riverine port on the Mahanadi river, Machilipatnam port (Phase I), Bhavanapadu port (Phase I) and expansion of Cuddalore port. Meanwhile, a transshipment port at Great Nicobar Island in the Bay of Bengal has been planned, to provide an alternative to similar ports in the region.
  • On the shipping front, too, some important developments were noted. The union cabinet approved a scheme to provide Rs 16.24 billion over a period of five years as subsidy to Indian shipping companies in global tenders floated by ministries and central public sector enterprises for import of government cargo in July 2021. The development comes in light of the government’s efforts to achieve the objective of Atmanirbhar Bharat. In a separate development, the government provided virtual data room access to the shortlisted bidders vying to buy the Shipping Corporation of India.
  • With a view to promote the Indian shipbuilding industry, the MoPSW has directed all major ports to only procure or charter tugboats that are made in India. Accordingly, all procurements by the major ports would now need to be carried out as per the revised Make in India order.
  • The Inland Waterways Authority of India has relaxed the conditions in the tenders for privatising the multimodal cargo terminals at Varanasi, Haldia and Sahibganj on National Waterway 1, in order to attract more bidders.
  • In November 2020, the roll-on roll-off passenger service between Hazira, near Surat, and Gogha, Bhavnagar district, was inaugurated.

In sum, the long-term outlook for the sector remains promising, and the opportunities for various stakeholders are abundant. While the sector will remain heavily dependent on global trade cycles, the vision for the sector appears to be well laid out.


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