Charting Growth

Sector focuses on enhancing port capacity and efficiency

During the past year, the ports and shipping sector in India has undergone significant changes with the introduction of amendments, technological advancements, energy conservation measures and completion of projects, among other developments.  The government has undertaken measures to support the public-private partnership (PPP) model in the sector by introducing new guidelines and regulations. Further, steps have been taken to improve port governance, augment capacity uti­lisation, and enhance port efficiency and connectivity.

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

Ports

Soaring port traffic

During April-June 2022-23, cargo traffic at ma­jor ports increased by 8.9 per cent to 196.71 million tonnes (mt) from 180.61 mt during April-June 2021-22. Meanwhile, cargo traffic at non-major ports increased by 10.5 per cent to 169.69 mt during April-June 2022-23, from 153.55 mt handled during April-June 2021-22. The soaring prices of crude oil and impor­t­ed coal have contributed towards a significant increase in cargo traffic.

Policy and regulatory measures for PPP projects

In a notable development, the Ministry of Por­ts, Shipping and Waterways (MoPSW) has identified 81 PPP projects till financial year 2025, with an expected cumulative value of Rs 423 billion, for the development of berths, termina­ls, oil jetties, etc., at major ports.

New MCA for PPP projects

The MoPSW launched a new model concession agreement (MCA) in November 2021 to reduce arbitration and litigation in the sector. A provision has been made that gives concessionaires the flexibility to fix their tariffs based on market conditions, which will create a level playing field, allowing private terminals at major ports to compete with private ports for cargo.

Tariff guidelines announced for PPP projects

The MoPSW announced the Tariff Guidelines, 2021, for PPP projects at major ports in Decem­ber 2021. The guidelines allow concessionaires at major ports to set tariffs as per market dyna­mics. These new guidelines will also be ap­plica­ble to future PPP projects, including projects that are currently at the bidding stage.

Guidelines for early resolution of PPP projects

The MoPSW has finalised guidelines for early resolution of PPP projects at major ports. In the case of projects that become stressed during the construction stage [pre-commercial operation date (COD)], the concessioning authority would pay a full and final settlement to the concessionaire or to the lenders of the concessionaire, for taking over the useful assets created by the concessionaire. On the other hand, for PPP projects, undertaken by major ports, that be­co­me stressed both at the pre-COD and post-COD stages, the due process before the Natio­nal Company Law Tribunal will be followed.

JNP becomes the first landlord port

The Jawaharlal Nehru Port (JNP) has become the first major port of the country to become a 100 per cent landlord port, with all berths being operated on the PPP model. The port has five terminals, and the Jawaharlal Nehru Port Container Terminal (JNPCT) is the only one that is self-operated. The JNPCT has two berths with a total leng­th of 680 metres and a 15 metre draught which will be handed over under the PPP contract, along with a backup area of 54.74 hectares, for 30 years.

Key project updates

  • The mechanisation of the Berth 14 Project at New Mangalore port has been completed. The project was taken up in two phases at an estimated cost of Rs 2.8 billion.
  • The expert appraisal committee of the Mini­s­try of Environment, Forest and Climate Ch­ange has recommended the grant of environmental clearance for capacity expansion of Gangavaram port. Adani Ports and Spe­cial Economic Zone Limited (APSEZL) inten­ds to augment capacity at Gangavaram port from 40.95 million tonnes per annum (mtpa) to 60.95 mtpa.
  • The Deendayal Port Authority has announc­ed plans to increase handling capacity with two privately funded mega container and ca­rgo terminals at Tuna-Tekra.
  • Dredging Corporation of India Limited has won a contract, worth Rs 2.5 billion per year, for maintenance dredging in Mumbai port and the JNP Trust navigational channel.
  •  Bharat Mumbai Container Terminals Private Limited has issued letters of award to Man Infraconstruction Limited for two contracts under the fourth container terminal project at JNP Trust.

Sagarmala programme update

Sagarmala is a flagship programme to promote port-led development in the country under the project themes of port modernisation, connectivity enhancement, port-led industrialisation and coastal community development. As of Ap­ril 2022, 202 projects have been completed at a total investment of Rs 992.8 billion, and 600 projects are at various stages of implementation (under construction, under bidding and announced).

JSW forays into container cargo business

JSW Infrastructure Limited has commissioned its first container terminal at the New Mangalore Port Trust in Karnataka on a design-build-fin­a­nce-operate-transfer basis. The project will make a phase-wise investment of Rs 3 billion to expa­nd its capacity to 0.4 million twenty-foot equivalent units (TEUs) by financial year 2024.

Work commences at the country’s biggest container port

APSEZL has started work on expanding Mun­dra port at an investment of around Rs 12.4 billion. About 1.2 million TEUs of capacity will be added at container terminal 5.

Measures for energy conservation

APM Terminals Pipavav has commissioned a 1,000 kW peak DC capacity solar power plant at the port. This is part of the Gujarat Green Ga­te­­way project. PSA Mumbai launched a 1 MW solar farm in February 2022, as part of its commitment to sustainability and increased us­age of renewable energy sources. The DP Wo­rld-operated International Container Tran­s­shipment Terminal at Vallarpadam has also unveiled a solar power plant with a production capacity of 1,122 MW per annum.

Technological advancements

  • The customs department has commissioned a mobile X-ray container scanner for speedy clearance of containerised export-import cargo at New Mangalore port.
  •  APSEZL, in a joint venture with Empezar Soft­ware Labs Private Limited, has incorporated a subsidiary company, EZR Technolo­gies Private Limited, to oversee software design and development, and information technology-enabled services and products, among other areas.
  • The Syama Prasad Mookerjee Port Tr­u­st has inaugurated the radio-over-internet protocol.
  • The Haldia Dock Complex has soft-laun­ched its comprehensive ease of doing business portal.

Major ports to become self-sustainable

The MoPSW has announced that all major ports will be made fully self-sustainable with respect to electricity by 2030. Further, the In­dian Ports Association has been directed to in­tegrate the master plan of all ports for Vision 2047, and prepare a comprehensive plan/re­po­rt for major ports.

Berth hiring and vessel-related charges exempted for six months

The MoPSW has recently directed all major ports to exempt all berth hiring and vessel-related char­ges currently being levied on roll-on/roll-off passenger ferries for the next six months, with immediate effect. This is to provide some quick respite to the marine sector from the impact of the global increase in the price of fuel.

Shipping

New vessels launched

Nirdeshak, the second of four survey vessels (large) (SVL) projects being built by Garden Re­a­ch Shipbuilders and Engineers (GRSE) in collaboration with Larsen & Toubro shipbuilding for the Indian Navy, was launched at Kattupalli, Chen­nai, in May 2022. The SVL ships will repla­ce the existing Sandhayak Class survey ships with new-generation hydrographic equipment to collect oceanographic data. In addition, APM Terminals Pipavav has secured a new service Jade Express mainly for transshipment cargoes. The weekly service, introduced by Maersk, will connect Port Pipavav to Port Qasim.

Khidderpore dry dock unit inaugurated

The GRSE’s Kchidderpore dry dock unit at the SMP was inaugurated in December 2021. As per the agreement signed, GRSE and SMP Port aim to develop a dynamic partnership to explore new business opportunities in ship repair, and refit the defence and commercial segments.

Inland water transport

  • Oil barge launched to transport furnace oil, minerals and metals: The Kerala Shipping and Inland Navigation Corporation (KSINC) recently launched the Amrutha oil barge to transport furnace oil from Kochi to Kerala, and minerals and metals in Kollam. KSINC has spent Rs 45 million on the construction of the vessel in its yard. Apart from furnace oil, the barge is licensed to transport petroleum products and is capable of refuelling large ships mid-sea.
  • Guwahati gateway ferry terminal foundation stone laid: The foundation stone was laid for the construction of the Guwahati gateway ferry terminal, which will be built at a cost of about Rs 2.89 billion. The government has allotted the project to Larsen & Toubro, and work on the terminal is expected to be completed within 24 months.
  • Water metro terminals construction completed: Kochi Metro Rail Limited has completed construction work on three water me­t­ro terminals at Kakkanad, Vyttila and Elo­or under the Kochi Integrated Water Tra­ns­port Project. Moreover, construction work on the water metro terminals at Vypeen, Bolgatty, High Court, South Chittoor and Cheranelloor has progressed to the final stages. The project involves the development of an integrated water transport system in Kochi.

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