Chennai: Ports, so far overwhelmingly characterised by unwieldy operational structures and outdated management practices, have so far been largely untouched by the wave of privatisation that is fast changing the face of other industries. Not so anymore. Almost all major Indian ports are inviting some degree of private participation in their operations, a recalcitrant labour force and other issues notwithstanding.
Already, Gujarats Pipavav and Adani ports are privately operated, as are container terminals like the Nhava Sheva Inter Container Terminal at the Jawaharlal Nehru Port Trust (JNPT) and PSA Sical at Tuticorin port. Many more such initiatives are on the anvil, for instance, P&O Australias involvement in the Chennai Port. However, its early days yet, and ports romance with private participation may well turn out to be short-lived.
Though the government relaxed regulations allowing for private investment in ports in 1996, private players were perceived to be unreliable. Moreover, the odds were stacked overwhelmingly in favour of the port trusts, making it unviable for private business to pledge its money in the absence of tangible returns on investment. However, under the New Deal, private participation could make the following possible: a) leasing of existing port assets by the construction of new assets
b) the construction and operation of container terminals, break bulk and bulk cargo berths
c) carnage handling
d) setting up of captive power plants
e) a dry-docking repair facility and,
f) leasing equipment for port handling and the leasing out of floating assets. A slow beginning
Joint ventures between major ports (which come under the Centre) and minor ports (which are governed by the state government) were also permitted. In addition, some state governments have drawn up plans to develop minor ports along their shoreline.
Consequently, all major ports have anchored their growth and profitability plans on private participation.
To facilitate this, port trusts are making their own investments in deepening drafts and modernising infrastructure. For instance, the Chennai Port Trust is extending one of its berths by 280 metres. The port trust has recently signed a 30-year agreement with P&O Australia to hand over its container terminal to the Australian company in three stages.
Firstly, the existing container terminal will be handed over to P&O in November. In the second stage, the wharf will be extended and will be handed over to P&O in December. In the final stage, the iron ore terminal will be dismantled. The last initiative depends on the development of Ennore Port - the country's first corporate port. Chennai Port is also planning to lease two berths to private players. Not to be outdone, Ennore Port has also drawn up ambitious plans to keep pace with the changing tides. To start with, the port intends to privatise marine services like pilotage.
On its part, the Mumbai Port Trust also plans to hand over three container terminals and two general cargo terminals to private parties. Says Mr Arun K Mago, chairman, Mumbai Port Trust, "We short-listed two parties for our dry docks but were not satisfied with their bids. We have now decided to issue another tender for the project. In addition, Mumbai Port will also lease out its two chemical jetties for private management. "Last year, the port signed an agreement with the Tata Electric Company (TEC) for building a coal jetty though the work is yet to begin," he adds. To facilitate private investment and increase traffic for itself, the Mumbai Port Trust (MbPT) will deepen the ports draft to 12-13 metres from the current level of 9 metres. JNPT is also building a chemical terminal on a build-own-transfer (BOT) basis that is expected to be operational by 2003-4.
This facility also includes five offshore berths. Similarly, the New Mangalore Port Trust has also drawn up plans to regain its lost traffic. Says the ports chairman, N Dhana Raju, "Our current focus is to attract feeder traffic between Mangalore and JNPT. Some, like Maserk, have started calling at our port again, and we are talking with the others too. Private parties are coming forward to provide mechanised handling facilities for iron ore exports," he adds.
The port is investing Rs 7 crore in a vessel traffic management system for navigational safety in addition to a bigger investment for the construction of a deep draft multi-purpose berth. In Andhra Pradesh, the state government has invited `expressions of interest' to develop the Gangavaram Port that enjoys deep draft facility. The Vishakapatnam Port Trust has already expressed its interest in the project.
The acid test in private participation in the port sector is the success of the P&O-managed Nhava Sheva terminal at JNPT. Interestingly, the port grew by default, filling in the vacuum created by the Mumbai Ports inefficiency.
also see : The road ahead
The
other point of view
Swimming
with their hands tied
A
skewed equation
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