OVERVIEW OF INDIAN PORT DEVELOPMENT Presentation by Indian
OVERVIEW OF INDIAN PORT DEVELOPMENT Presentation by Indian Ports Association
OVERVIEW: INDIA’S PORT SECTOR • India’s coastline of 7517 Km is spread over 9 maritime states – Gujrat, Maharashtra, Karnataka, Tamil Nadu, Kerala, Odisha, West Bengal, Goa, & Andhra Pradesh. The coastline is dotted with 12 major ports and 200 Non-Major Ports. • Around 90% of the country’s trade by volume and 70% by value is moved through the sea. • Port legislation & Structure - Indian Ports Act, 1908 allows Maritime States to set up their own port systems - Major Port trust Act, 1963, regulates 12 major ports. • Major Ports fall under operational & financial control of Ministry of Shipping & subject to tariff regulation by Law • Non-Major ports: under State Maritime Boards & free from formal tariff regulation
DEFINITION OF PORT & MAJOR PORT Section 3(4) : “Port” includes also any part of a River or Channel in which this Act is for the time being in force. Section 3(8): “Major Port” means any port which the Central Government may, by notification in the official gazette declare, or may under any law for the time being in force, have been declared to be a Major Port
• Major ports come under the Union list and hence come under the exclusive jurisdiction of Central govt. • Non Major ports i. e. Minor Ports come under the jurisdiction of governments of the Maritime state. INDIAN PORTS CONSTITUTIONAL POSITION
DECLARATION OF A PORT AS MAJOR PORT Sub section (8) of section 3 of Indian Ports Act 1908 empowers the Government of India to declare a port as a major port. "Major port means any port which the central government may by notification in the official gazette declare, or may under any law for the time being in force have declared, to be a major port. "
MAJOR PORTS IN INDIA
Break-Bulk & Dry-Bulk Handled During 2014 -15 34. 2 % 36908 24894 2687 13828 12672 2332 75. 8 % ‘ 000 Tons Kandla Kolkata Dock System Haldia Mundra Pipavav Paradip MBPT JNPT Gangavaram Visakhapatnam Kamarajar Port Ltd. Mormugao Krishnapatnam New Mangalore Cochin Chennai Tuticorin 30100 52968 38990 27063 9860 20774
Containers Handled During 2014 -15 38. 6% ‘ 000 TEUs 62. 4 % 0 45 4466 25 63 365 Kandla Kolkata Dock System Haldia Mundra Mb. PT Paradip JNPT Visakhapatnam 630 4 248 Mormugao New Mangalore Cochin Chennai Tuticorin 1552 560
Liquid Bulk Cargo(POL) Handled During 2014 -15 29. 3 % 70. 7 % 55589 36285 4181 571 22973 14017 ‘ 000 Tons Kandla Kolkata Dock System Haldia Mundra Pipavav Paradip MBPT JNPT Gangavaram Visakhapatnam Kamarajar Port Ltd. Mormugao Krishnapatnam New Mangalore Cochin Chennai Tuticorin 7126 17976 14641 3188 12736 606
PORTS SECTOR OUTLOOK Ø Indian tonnage currently stands at 10. 39 million GT 3 and Coastal vessels accounts for just 10. 9% (1. 0 million GT 4 ) of India’s total tonnage. Ø Coastal shipping accounts for less than 7% of domestic freight movement compared to 15% and 40% in US & Europe Ø The average fleet age of Indian ships is around 18 years, compared to a global average of around 12 years and the rate at which new ships are added is marginal Ø 52% of Indian fleets come under tanker segment followed by dry cargo bulk carriers – 29%
THE SAGARMALA INITIATIVE Sagarmala is an initiative floated by the Government of India to evolve a model of port led development which will transform India’s coastline as gateways of India’s prosperity. The prime objective of the Sagarmala project is to promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and costeffectively The Sagarmala initiative will address challenges by focusing on three pillars of development: I. Supporting and enabling Port-led Development through appropriate policy and institutional interventions II. Port Infrastructure Enhancement, including modernization and setting up of new ports III. Efficient Evacuation to and from hinterland.
THE SAGARMALA INITIATIVE Sagarmala emphasizes on holistic development Building Efficiency • Developing port capacity • Modernization of ports through mechanization and IT enablement Hinterland Development • Port led economic development • Improving hinterland connectivity Improving Policy • Improving inter-agency collaboration • Institution development • Faster clearances and approvals • Simplification of procedure
PRIVATE SECTOR PARTICIPATION The Government has been encouraging private sector participation in port development since 1996 The major areas which have been thrown open for private investment, mainly on Build, Operate and Transfer (BOT) basis are: § Construction of cargo handling berths § Container terminals and warehousing facilities § Construction of dry-docks and ship repair facilities etc. Foreign direct investment upto 100% is permitted for construction and maintenance of ports and harbours. Standardized RFQ, RFP and Model Concession Agreements have been put in place by the Ministry of Shipping, Government of India
NATIONAL MARITIME DEVELOPMENT PROGRAMME National Maritime Development Programme (NMDP) has been formulated by the Ministry of Shipping, Govt. of India. Under the Programme, 276 projects to be taken up for Implementation from 2005 to 2012 Total investment involved under the Programme is Rs. 1, 00, 339 crores Out of this, Rs. 55, 804 crores is for the Port Sector and the balance is for the Shipping and Inland Water Transport Sectors In the Major Ports, 276 projects undertaken under National Maritime Development Programme cover the entire gamut of activities: § Construction/upgradation of berths (76 nos. ) § Deepening of channels (25 nos. ) § Rail/road connectivity projects (45 nos. ) § Equipment upgradation/ modernization schemes (52 nos. ) and other related schemes (78 nos. ) for creation of backup facilities.
KEY AREAS TO FOSTER DEVELOPMENT OF MARITIME SECTOR Development of Shipping Building Industry • Providing low interest bearing long term funds to Indian Shipyards with interest rate subsidy from the Budget (leading players like China and Korea low cost of financing (typically ranges between 4%-8%p. a) • Provision for a 30% subsidy on price of each vessel for a period of minimum 5 years • Grant of SEZ status to Indian Shipyards with all attendant benefits Use energy from regasification of LNG for developing zero energy • Use energy available (cold air) at LNG terminals to refrigerate perishable goods terminals • It may turn out to be a zero energy gateway Development of supporting logistics to reduce overall logistics cost • India’s overall logistics cost is close to 13%-14% of its GDP, when compared to 7%- 8% in developed countries. • Develop inland waterways for movement of domestic cargo as its operating cost is 1. 06/ton/km (30% less than from railways (1. 41/ton/km) and 140% less than roads (2. 58/ton/km) • Development of new hubs for movement of cargo and logistics parks in tier-II and tier- III cities (Nashik, Nagpur, Chandigarh, etc. )
POLICY FRAMEWORK FOR DEVELOPMENT AND MODERNISATION OF PORTS 1/2 The Government of India has given the top priority to the Modernisation of ports, which is undertaken through: § Construction of new berths/terminals § Various expansion/ up gradation projects for berths § Installation of new and modern equipment § Up gradation/ replacement through higher capacity of cargo handling equipment § Mechanisation of cargo handling operations § Various computer aided systems to encourage automation in port operation § Installation of Vessel Traffic Management System (VTMS) for smooth movement of vessels § Implementation of Web- based Port community system
POLICY FRAMEWORK FOR DEVELOPMENT AND MODERNISATION OF PORTS 2/2 Expansion of Berth Capacities: Public Private Partnership (PPP) mode is the preferred mode of implementation of all new berth projects. Port projects are awarded through the competitive bidding process on revenue sharing model Mechanisation: Introduction of high capacity mechanized equipment in the form of mobile harbour cranes/floating cranes, etc. private sector participation, with a view to utilizing the latent capacity Development and Maintenance of Channels: Towards this objective, ports are required to undertake capital and maintenance dredging in the channel on a regular basis Port Connectivity: The projects on rail and road connectivity are implemented mainly by the National Highways Authority of India (NHAI) and the Railways in 2 broad categories; I. Road Connectivity Projects: Each Major Port will preferably have minimum four lane road connectivity. Such projects could be taken up through NHAI and / or on Build, Operate and Transfer (BOT) basis II. Rail Connectivity Projects: Each Major Port should preferably have double line rail connectivity. Such projects could be taken up by the Railways and / or BOT basis
An unprecedented increase in cargo-handling capacity – 800 Million Metric Tonnes in February 2014, from 575 Million Metric Tonnes in 2009. 87 new port projects have been sanctioned in the last four years, with an investment of INR 430 Billion. 28 PPP terminals are in operation in major ports and another 45 are under construction. New projects have seen an increase in capacity of 558 Mega Million Tonnes per annum. A projected increase in cargo capacity of 2289 Million Metric Tonnes by 2017 from 1235 Million Metric Tonnes in 2012. A projected increase in cargo traffic at major ports – 943 Million Metric Tonnes by 2017 from 546 Million Metric Tonnes in 2013. A projected increase in cargo traffic at non-major ports – 815 Million Metric Tonnes by 2017 from 388 Million Metric Tonnes in 2013. Container demand is expected to increase to 21 Million T. E. U by 2017, from 6. 5 Million T. E. U in 2012. Special Economic Zones are being developed in close proximity to several ports – comprising coal-based power plants, steel plants and oil refineries. REASONS TO INVEST
Port development – the opportunity to serve the spill-off demand from major ports. Port support services – operation and maintenance services such as pilotage, dredging, harbouring and provision of marine assets such as barges and dredgers. Ship repair facilities in ports – demand for ship repair services will increase, providing opportunities to build new dry docks and set up ancillary repair facilities INVESTMENT OPPORTUNITIES
AP Moller Maersk (Denmark) PSA Singapore (Singapore) Dubai Ports World (UAE) Jan Del Nul NV (Belgium) Hyundai Engineering and Construction Company Limited (South Korea) Royal Boskalis Westminister NV (Netherlands) CURRENT FOREIGN INVESTORS
SELECTED FRESH OPPORTUNITIES IN MAJOR PORTS CASE OF DRY DOCK MODERNISATION IN KOLKATA PORT TRUST
Ship-repairing facilities Kolkata Dock System
Ship-repairing facilities at Kolkata Port 3 Graving Dry Docks In Kidderpore Dock (KPDD) & 2 bigger Graving Dry Docks (in tandem) in Netaji Subhas Dock (NSDD) constitute the largest dry dock set up in India. Besides, 1 small workshop dry dock, 1 small slipways are also existing workshop slipway & 3 long 2 ELL Cranes at KPDD & 3 ELL Cranes at NSDD Large back-up workshops having machining, forging, casting & testing facilities Fire-fighting facilities, compressed air facilities, staff accommodation facilities, adequate keel blocks and side shores
THE FIVE-DRY-DOCK SET UP IN KOLKATA PORT (LARGEST IN INDIA) Dry Dock MAXIMUM PERMISSIBLE DIMENSIONS OF VESSEL Length (LOA) Breadth (Beam) Depth NSDD - I 172 m 23. 0 m 14. 32 m NSDD - II 172 m 23. 0 m 14. 32 m KPDD - I 160 m 19. 5 m 7. 62 m KPDD - II 143 m 19. 5 m 7. 46 m KPDD - III 102 m 14. 6 m 7. 31 m
ELL CRANE FACILITIES IN KOLKATA PORT DRY DOCKS 1 No. ELL Crane of 5 T capacity at 20. 00 m radius KP DD 1 No. ELL Crane of 7 T capacity at 25. 42 m radius 2 Nos. ELL Crane of 3 T/6 T capacity NSDD 1 No. ELL Crane of 3 T capacity
VESSEL REPAIRED OF VARIOUS SIZES AT KOLKATA PORT DRY DOCKS Year 2010 -11 2011 -12 2012 -13 2013 -14 2014 -15 No. of vessels repaired 23 27 30 26 18
The existing dry dock users Vessels and crafts of Kolkata and other major ports Shipping Corporation of India for passenger & cargo vessels Dredging Corporation of India for Dredgers Indian Coast Guard for ICGS vessels Garden Reach Shipbuilders & Engineers (GRSE) Private Indian vessels and foreign vessels
The proposed infrastructure development Installation of one 5 T ELL Crane at KPDD & one 15 T ELL Crane at NSDD Installation of 2 nos. 15 T Gantry Crane, one each at KPDD & NSDD Introduction of Cherry Picker at both KPDD & NSDD Renovation of the existing 4 slipways and 1 small workshop dry dock and back-up workshops The estimated development cost is Rs. 100 Crore
The prospective return on investment Kolkata, being the terminal port, is ideal for dry dock repairing of vessels which may increase by 40 -50% if development of facilities is taken up Return on investment may be revenue-sharing basis or on lease basis Presently, the clients are from all over India and development may attract those Indian vessels seeking overseas dry docks for modern facilities and also more foreign vessels terminating Liner voyages at Kolkata Port having unique ship repair facilities.
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