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CHAPTERS
CONCLUSION
321
During the last three decades, the enormous expansion in international sea borne
trade has been ~~ by unprecedented development and changes in the legal and
technological framework of shipping and related industries. The most notable
technological innovation is unitisation of general cargo. Containerisation, which has
grown out of the concept of unitisation has expanded at an astounding pace and has
established itself as a major mode of carriage of general cargo on shipping routes
connecting the developed and the developing world. The conventional general cargo
vessels are being gradually replaced by newer ranges of larger and specialised vessels in
response to the needs of cargo transfer methods. Improving competitiveness of sea
transport and increasing port efficiency is the aim behind all these endeavors. The
impact on developing countries of these technological changes, in the ·early stages, was
not so severe because the technological innovations in the wake of unitisation by and
large, lent themselves to conventional handling with existing port facilities. Moreover,
the ship owners could still decide which vessels to put on a particular trade route. The
situation has changed radically now. The transfer of unitised forms of carriage is forcing
ship owners to bring sophisticated and specialised new tonnage vessels on trade routes
serving the developing countries. The changing needs of the ship owners are exercising
relentless pressure on port authorities to react quickly and positively to these changes by
providing more and more specialised services. Massive investments are needed to adapt
existing berths or construct new specialised terminals, purchase new equipment and
introduce new operating procedures and practices. The need to find solutions to the new
and complex port management problems, including the development of human
resources is equally pressing. Against this backdrop, it seems necessary to review the
Indian port sector in terms of achievements, problems and prospects.
The Indian Port Scene
On the eve of independence, the Indian ports of Calcutta, Visakhapatnam,
Madras, Cochin, and Mumbai ports together handled about 18 million tonnes of cargo.
The other major ports came up in the subsequent plan periods in the following
chronological order; Kandla, Mormugao, Paradip, New Mangalore, Tuticorin, Haldia
and JNPT. By 1997-98, the sea-borne traffic through all the eleven major ports
322
increased to about 251.51 million tonnes, of which over 178.51 million tonnes
accounted for the overseas trade. The average annual growth rate of traffic for all the
major ports between 1950-51 and 1996-97 has been around 5.4 percent but in the last
decade, it has been above 7 percent. The traffic break-up of 1997-98 is as follows:
• 1 04 million tonnes of liquid bulk,
• 88 million tonnes of dry bulk,
• 23 million tonnes of containerised cargo and
• 3 6 million tonnes of other cargo.
• Import and export traffic during 1997-98 were 142.65 and 94.66million tonnes
respectively.
On the domestic front, the picture is quite bright as container traffic is steadily
growing over the years in absolute terms. Also, the share of containerised to general
cargo is steadily growing and has crossed the 50 percent mark. But, on the international
scene, it is quite disheartening to see that no Indian port rank among the top 20
container ports in the world based on TEU throughput. The major Indian ports have
been slow to build facilities for containerised general cargo although significant
progress has been made in recent years in introducing this new technology. Modem
dedicated container terminals are operating in Chennai and JNPT and two new
terminals have opened in early 1992 at Calcutta and Cochin. Despite these major
investments in the four main container-handling ports, hourly and daily output rates are
very low.
In the handling of sea-borne traffic, the role of intermediate and minor ports has
been a complimentary one to the major ports. The minor ports at present handle only
about 10 percent of the total port's traffic. Quite a few of these handle overseas traffic
in which the major import items are foodgrain, fertiliser, etc., while building material,
oil cakes, ores and salt figure in the export list. Among the States, Gujarat has the
largest coastline with the largest number of ports handling about 70 percent of the total
cargo of all minor Ports of India. Gujarat is also the first maritime state in the country to
have constituted a Gujarat Maritime Board (GMB) to administer, control, manage and
develop minor ports of the state. It is also the first State that has developed a deep water
port 'Pipavav' under joint venture partnership.
323
Next to Gujarat in terms of length of coast line, comes Tamil Nadu followed by
Andhra Pradesh and Kerala. In Tamil Nadu four minor ports have been declared for the
use of private companies. In Maharashra State also, a Maritime Board has been set up
recently to look into the development of minor ports through private participation. The
different State Governments are proposing to develop minor ports in a phased manner
with or without private sector participation.
India today is encouraging private sector participation and most of the ports are
working out areas for private investments as well as services that are needed to improve
efficiency in the ports. Under the privatistion process, new container terminals are being
built at Cochin, Goa, Vishakhapatnam, Haldia, Calcutta, Tuticorin, New Mangalore,
Kandla and JNPT. Apart from the development of the existing ports, the Government
also has immediate plans to develop four minor ports - Ennore (TN), Gangavaram
(AP), Kakinada(AP) and Gopalpur (Orissa), into major ports soon. The Maharashtra
Maritime Board, which is developing seven intermediate ports - Vadhawan, Dighi,
dabhol, Jaigad, Ratnagiri, Vijaydurg and Redi- has already indicated to investors, that
these ports would have the freedom to levy their own tariffs for all vessel and cargo
related services. Only the passenger services would be regulated by the State Maritime
Board. As a result, Vadhawan could directly complete with two of the major ports in the
vicinity - Mumbai and JNPT. Vadhawan is being developed by P& 0 of Australia.
Similarly, Adani Port, being developed by the Mundhras, would come in direct
competition with Kandla.
Hypotheses Tested
The discussion on the hypotheses tested in this thesis follows:
I. A change in the port-hierarchy is the function of the changes in the factors
affecting functioning and performance of ports.
There has been a positive relationship between port rank and port functioning
and performance. By composite-index ranking method, it has been found out that ports,
which improved in functioning and performance temporally~ also improved in relative
hierarchical position. Similarly, poor performing ports like Calcutta, Cochin and more
recently Murmugao, all have ranked low in the port hierarchy. JNPT's performance has
324
improved over the years from the fifth rank to the first rank. Kandla is the next port in
hierarchy after JNPT. New Mangalore has improved its position by three ranks so as to
reach the second position by 1996-97. This improvement in port performance has been
mainly due to addition of oil traffic by the New Mangalore oil refinery. While Tuticorin
has maintained its fourth position over the years, Vishakhapatnam's performance has
improved over time from eighth to fifth position. Paradip follows Visakhapatnam
improving its position to sixth from ninth. While Calcutta has improved marginally,
Cochin's performance remains variable over time. Mumbai's position remains
consistently low. These ports however, occupy the lower rung in the performance level.
But the two ports which have remarkably gone down in position over time are
Murmagao and Chennai. While fall in the former's position is understandable due to
worldwide slump in iron -ore trade. The port, which primarily handles iron-ore, got
adversely affected. The reasons for the latter are different. Chennai is losing
transshipment traffic to other competing ports like Colombo and faces severe
competition from domestic new ports like Tuticorin.
2. Cargo handling capacity of a port is a function of both natural (eg. draught
availability) and man made factors (manpower, capital expenditure etc.).
The basic function of any port is to handle cargo, the nature of which differs
from port to port and from time to time in response to variations in certain natural and
man-made factors. (Refer Chapter 4) Among all the factors affecting the function of a
port, ship berth day output is the most important positive factor while turnaround time is
the most important negative factor affecting cargo traffic in any Indian port. A very
strong positive relationship exists between capital expenditure and ship berthday output
(as in JNPT), traffic and ship berthday output (as in New Mangalore, Cochin, Chennai,
Paradip and Calcutta). An equally strong negative relationship exists between
turnaround time and berthday output (as in Mormugao, Mumbai, New Mangalore,
Visakhapatnam, Calcutta).
Generally, it is observed that a higher pre-berthing detention leads to a higher
turnaround time as in Kandla, Visakhapatnam, Mumbai and to some extent in Cochin.
325
Strength of manpower has been detrimental to traffic growth in most ports like in
Cochin, Tuticorin, Chennai, Visakhapatnam, Paradip and Calcutta. But in contrast, in
some ports, as manpower strength increased, traffic too increased as in comparatively
newer ports like JNPT and Haldia where employment opportunities grew with time
concurrent with increase in traffic. The situation is different in the former case where
old established ports like Calcutta, Cochin, Visakhapatnam etc. have the perennial
problem of surplus manpower as these ports are today highly overmanned. The burden
of manpower is obvious in these ports and today the total manpower strength is
declining which is a healthy sign.
3. The internal functioning of an individual port is determined by factor/factors
unique to that particular port.
This hypothesis has been tested against all the major Indian ports over time in
Chapter 4. This exercise has been undertaken with the intention to identify the chief
factor, natural or man-made, that affects individual port functioning. Once identified,
this will help any port planner to suggest improvement in port functioning by
controlling that very factor.
It is interesting to find out that for each individual port, dominant factor or
factors that affect quantum of cargo flow differed and has been unique. For example,
draft availability is the chief factor in Calcutta while capital expenditure emerges as the
dominant factor in JNPT. While pre-berthing detention is the dominant factor in ports of
Kandla and Mumbai that affect port functioning, high idle time at Calcutta deters
efficient port functioning. Manpower is a burden in older ports like Cochin, Mumbai
and Calcutta while newer ports like JNPT have the burden of capital debt.
4. Performance or productivity of a port is a function of the interplay of a number
of variables and is not a matter of chance.
An universally accepted criterion for measuring port efficiency has not yet been
formulated. This is in fact one of the major limitations for estimating port efficiency. In
the present study, port performance has been assessed on the basis of certain selected
indicators, physical and financial. Moreover, each of the selected indicators have their
326
own limitations (Refer Chapter 5). For example, the problem with financial indicators is
that a port can show a good performance on the financial front, but may still be very
inefficient as a transport interface. On the other hand, a port that is very efficient as a
transport interface may not necessarily achieve an adequate financial performance.
Therefore, any statement made about port performance is not final and absolute.
Performance is dependent on productivity and efficiency - both of which vary with
time. Therefore, it is quite likely that the conclusions on port performance that have
been arrived in this study may change over time.
5. The comparative performance of an individual port over time and several ports
viz-a-viz other ports is a function of its age. Newer ports perform better than older
ports.
This hypothesis, tested in Chapter 5, holds true for the Indian major ports. JNPT,
Kandla, Tuticorin and New Mangalore (the newer ports) fare better in terms of port
performance index as compared to Calcutta, Mumbai, Chennai or Cochin (older ports).
6. The financial viabilty of a port is primarily a function of the volume and cargo
mixes it handles.
One indicator of financial viability is operating ratio. It is the ratio between
operating expenditure and operating income. Lower the ratio, better is the financial
health of the port as it indicates less of expenditure and more of income. It is interesting
to note that the port which stands out in this aspect is Kandla whose operating ratio has
never been over 56percent (1991-92). It has managed over the years to keep its ratio
below 50percent on an average, which is undoubtedly a healthy sign. This is mainly
because it primarily handles liquid bulk cargo which requires little manpower and basic
infrastructure and port facilities. Of all commodities, margin on liquid bulk handling is
the maximum with scope for cross- subsidisation and the'refore a port handling liquid
cargo (POL and products mainly) is always make surplus and earns more. Kandla
exemplifies this. (See Table 5.11) On the other hand, Mormugao for example is a
predominantly iron-ore exporting terminal and so operating ratio has always been high
(around 70 percent to 75 percent). Similarly, in Cochin, oil traffic is comparatively less
327
and so it is in Paradip and Calcutta. Therefore, ports handling low volume & high value
commodity and products earn more. Financially that port is sound which handles POL
& products as it has scope for cross-subsidisation against other commodities that it
handles. This hypothesis has been tested in Chapter 5.
7. There is a negative relationship between labour intensity and port performance.
It is an acceptable fact that the Indian port sector is heavily overmanned.
Salaries and wages for port employees constitute the largest share of operating
expenditure for any port. Most ports can maintain or even improve their performance or
productivity with less manpower. Over the years, as traffic has increased consistently,
manpower engaged in cargo handling activities has declined so that output per
employee has improved over time as seen in Chapter 5. On the basis of labour
productivity between 1982-1998, ports can be divided into 2 distinct categories - the
older ports like Calcutta, Mumbai and Cochin where labour productivity rates are
lower( as labour intensity is high) as compared to newer ports like New Mangalore,
Kandla, Mormugao and JNPT which have iesser number of workers.
8. Containerisation cannot succeed unless it is accompanied by multi-modal
transport network.
As have been discussed in Chapter 6, containerisation has not picked up in
Indian port sector as compared to other East Asian ports. Containerisation in isolation or
part containerisation does not yield desired results. Containerisation should be closely
followed by multimodal transport network in order to extract full benefits of the former.
So container penetration in our country has remained somewhat superficial because out
of a potential containerisable cargo of about 20 million tonnes, hardly 8 million tonnes
have so far been containerised.
Problems
• One of the problems that the Indian port sector faces today is the mismatch
between traffic and aggregate port capacity. The capacity of the port is the aggregate
capacity of individual berths depending upon the types of commodities handled at that
berth. The cargo-handling capacity of Indian major ports has been increased from 20
328
million tonnes in 1952 to 251 million tonnes by 1997-98. But the actual traffic handled
in 1997-98 turned out to be 257 million tonnes, a growth of 10 percent over the
previous year's traffic. So it is clear that there is a long gap between traffic demand and
available capacity. Most of the major ports are operating beyond their capacities and the
rest very near to their saturation limits. The over stretching of the capacities has adverse
effects like high berth occupancies, inadequate maintenance and upkeep of assets.
Performance of the ports also suffers from obsolete equipment, poor draft facilities,
inadequacy of container handling facilities and labour intensive methods of bulk
handling of sensitive commodities like thermal coal and general cargo. Because of these
inefficiencies the country looses colossal money. So India can be competitive in the
global market only if the transport costs are kept to the minimum for quick timely
movement of goods.
As has been the experience in India, there exists a mismatch between the traffic
and aggregate port capacity. There would be a gap of about 168 million tonnes in
capacity in 2005, mostly in the ports of Paradip, Visakhapatnam, Chennai, Tuticorin
and Kandla. At these ports, there are physical limitations and constraints in the creation
of capacities of this magnitude and it may be necessary to build new Outer Harbours
contiguous to the existing ones or develop newer ports at suitable "greenfield" locations
nearby (like Ennore near Chennai), through combined efforts of the Governments and
the Private sector. Major ports account for 95 percent of the cargo traffic handled at all
the ports in the country. The existing port handling capacity is inadequate for dealing
with raising levels of international trade in the coming years.
There is an urgent need therefore, for capacity augmentation. The steady growth
witnessed in the last 50 years will not be enough to meet the forthcoming challenges.
The following facts have to be considered : the total capacity of the major ports at
present is around 215 million tonnes and the overall port capacity required to handle the
projected traffic is estimated to be 540 million tonnes in 2005-2006. This means an
additional capacity of 307.43 million tonnes will have to be added by 2005-06.
In order to increase the capacity of the port sector the MOST has estimated the
fund required in the Ninth Five Year Plan (1997-2002) to the tune of US $ 4.5 billion.
The Government of India has initiated action for policy reforms required for enabling
329
effective participation of private sector in port development. Moreover, the maritime
states have launched ambitious programmes to develop the existing minor ports and
also create new ports through private sector participation. Interest is also being shown
by the potential port users to develop captive facilities. It is hoped that clearer picture
will emerge in due course. A close watch on the developments and closer interaction
with the maritime state governments is also necessary.
• Another key problem is low productivity in the port sector. The major factors
•
•
contributing to this are summarised below:
Operational constraints such as frequent breakdown of cargo handling
equipment due to obsolescence and wrong specification. It should be noted that
the working Group for the Eighth Plan had suggested the formation of a
Standing Committee to periodically review the status of equipment in order to
dispose of the obsolete equipment. The procedure is being followed in some
ports.
Inadequate dredging and container-handling facilities.
Inefficient and non-optimal utilisation of port infrastructure.
Lack of proper co-ordination in the entire logistic chain.
Low level of containerisation is another problem of the Indian port sector .
Containerisation, which brought about a technological revolution in the
transportation world, is still to make an impact in India. Indian ports are costlier
than other ports in the region for handling containers. The additional cost burden
due to use of second and third generation vessels has been estimated at US$ 250
million a year. Container delays at Indian ports cost US$ 70 million a year. 1
Investment on port modernisation is an unattractive proposition for the private
entreprenuers for the following reasons2:
Huge capital cost (anywhere between Rs. 300 to 1000 crores even for the first
phase.
Indian Shipping, Vol. 49, Nos. 1-2, November.
K.V. Natarajan, 'What government can do for port development', Indian Ports, Vol. XXX, No.3, Jan 1999
330
High gestation period for design and execution (5 to 7 years)
More initial investment in the early phases with fewer returns than subsequent
investments in greenfield situations or more pay-back time compared to other
investment propositions.
Low returns necessitating increase in the lease period for viability, increase in
lease period leads to increase in the risk of investment.
Commercially unviable tariff charged for return on investment inclusive of
payback of current capital.
Present rules and regulations are not conducive for private investment.
Risk of being challenged legally during the course of business due to lack of
protective legislation.
The proposal to establish a Free Pore in India is part of the modernisation
process. India has free trade zones and export processing zones but their performance to
attract foreige capital remains far from being satisfactory. It is expected that a free port
with necessary infrastructure and liberal fiscal policy regimes could bring in many
advantages including foreign direct investments, technologies and foreign exchange.
Proposals for establishment of Free Port in Goa and Tuticorin in Tamil Nadu are long
standing.
• Re-adjustment of work-force is another associated problem with modernisation.
The country has a total employed workforce of 150 million. Of this about 50 million
are in the organised industries which are relatively better off as they have access to
resources, institutional finance, research and development facilities. It should be
mentioned that in sectors where the pace of mechanisation is slow and its impact on
the levels of employment less visible, it is accepted willingly because the resultant
increase in productivity brings higher income to labour. Greater effort is needed to
educate the worker not only in the port industry but in other industries too about the
benefits of increased productivity to him, to the employer and to the economy as a
whole. Productivity consciousness in a developing economy like India is a vital
ingredient in the optimum utilisation of scarce resources. Adoption of modern
methods and techniques to step up productivity are infact needed in all fields of
M. Dattatreyulu, 'Establishing a Free Port in India', Indian Ports, October 1993.
331
economic endeavour. Each industry has to adopt rational methods of production to
be able to generate adequate resources for growth and development. The maritime
industry is no exception either. The major focus in the process of port
modernisation in India should be on:
Increasing capacity utilisation and improving productivity;
Enforcing measures for cost reduction;
Strict inventory control; and
A voidance of waste.
Adoption of new technologies and their integration into the port system is not
contingent only on the ability to find adequate financial resources and skilled
manpower. It also requires an analysis and assessment of the impact of such
technological changes on port labour and other interacting agencies such as the customs
and transporters operating in the hinterland. Unless the procedures and practices
currently in operation are streamlined and oriented to the objectives, the gains of new
technologies will remain elusive. Collectively these developments present complex
policy and planning issues, which require a multi disciplinary approach to appreciate
and resolve many problems.
An aggressive march towards modernisation is needed. It has to be a continuous
process and not a one shot measure. Modernisation without retrenchment is difficult to
achieve. This has been the experience the world over. India, which has a huge backlog
of unemployed and underemployed persons exceeding 40 million, retrenchment would
be a formidable problem. However elaborate and imaginative the welfare mechanism
evolved maybe, it can only partially mitigate the hardships of unemployment.
Modernisation may increase the employment opportunities as a whole at macro
level but not for the unskilled and semi-skilled labour. This is the fear. Modernisation
may help widen the base of the economy, and improve the purchasing power of the
people, which will in turn trigger the demand for more industries and generate
additional jobs. But the additional employment which will be created per unit of
investment may not be commensurate with the backlog of the unemployed.
332
Prospect
Port development has not proceeded along the expected lines as laid down in the
five-year plans. The major port performance has not been up to the mark because of
surplus labour, poor equipment and other operational constraints. The new economic
policy therefore stresses private investment that can bring in new technology to tone up
efficiency. Private participation is needed to supplement government efforts in raising
resources for port development. The government has also approved the setting up of an
independent regulatory authority in the port sector to fix and revise port tariffs every
three years (TAMP- Tariff Authority for Major Ports). There is at present no uniform
system of tariff fixation at the major ports. Even the accounting and the billing systems
are not uniform. In the absence of a uniform system of tariff fixation in the 11 major
ports, TAMP was established to build a uniform system of tariff fixation in 1997.
TAMP is open to the inclusion of minor ports within its jurisdiction. Such steps would
necessitate certain legislative changes in the Port Trust Act.
The port sector is an illustration of the 'Mixed Economy' policy of the country.
Both the public and private participation co-exists in the industry, though the 'public'
dominates over the 'private'sector. The provision of auxiliary services - stevedoring,
ship agency, dearing and forwarding, etc., is in the domain of the private sector. The
entire construction of marine infrastructures is carried out by the private sector. To face
this stupendous task and to meet the challenge, it is considered necessary to invite and
involve the private sector in this pursuit. It may not be possible for the Port Industry to
raise the enormous resources from internal sources. The Government may provide the
resources with its emphasis on investment in the social sector. Thus, private
participation in the development process is necessary. While the Government may
retain the controlling stakes, privatisation of certain services of ports needs
consideration. Ports perform multifarious activities such as cargo handling, storage,
warehousing, customs clearance, security and administration. Each of these activities
could be considered for commercialisation and private sector participation. It is
advisable to make the ports work as corporate entities with administrative independence
and the freedom to generate resources for their development.
333
The port sector is an illustration of the 'Mixed Economy' policy of the country.
Both the public and private participation co-exists in the industry. The predominance of
'public' over 'private' is evident. The provision of auxiliary services - stevedoring, ship
agency, clearing and forwarding, etc., is in the domain of private sector. The entire
construction of marine infrastructures is carried out by the private sector. The
ownership, the investment for development, the provision of primary services and their
management, the supervision of the construction of the marine structures, employment,
etc., are retained by the public sector. This is the scenario at the Ports in the country.
The country may need by 2020, a port capacity of more than 760 million tonnes
per annum against its resent capacity of less than 250 million tonnes per annum. More
importantly, the Port user demands a better quality service. These demands on the Ports
by their users, warrant building a huge port capacity requiring not less than 400 billion
rupees during the next 25 years and induction of the 'state-of-art' technology,
particularly in cargo transfer systems, to raise the productivity levels to international
standards.
To face this stupendous task and to meet the challenge, it is considered
necessary to invite and involve the private sector in this pursuit. It may not be possible
for the Port Industry to raise the required huge resources from its internal resources. The
Government may provide the resources with its emphasis on investment in the social
sector. Thus, private participation in the development process is envisaged.
Also, the World Bank in its "Strategy Report on Indian Port Sector" voices a
similar opinion though in a different form. It advocates 'Privatisation' to satisfy the
objective for which the Ports are established as 'Trusts'. They, as a Service.1ndustry,
should serve the 'Public Interest'. According to it, this interest is served when Ports put
their economic and human resources to optimum use. It states 'any sub-optimal use
would mean that the trust mandate is not fully executed'. Also, it believes that
privatisation would place the Ports in their proper role- as 'Landlord' and 'Regulator'.
The Inter-governmental Group, constituted in 1991, identified the following
areas of the Port Industry for private participation.
Container Terminal Development and Operation;
Container/Break-bulk cargo handling;
334
Stevedoring and Warehousing;
Liquid bulk handling and storage;
Dry bulk cargo handling;
Lighterage services;
Provision of Tugs, Barges, Cranes and services to vessels;
Maintenance services, including Estate Management;
Dredging Operations and Pilotage; and
Provision of new Berths and captive facilities.
It is expected that privatisation would usher in an era of better performance and
productivity in the following ways :
• Firstly, the association of the private sector, to a greater extent, with the Port
Industry envisages an adequate flow of private investment in building the additional
Port capacity and modernising the present capacity.
• Secondly, the foreign private investment would provide an easy transfer of
technology, particularly in the area of cargo transfer system, including the container
technology and pave the way for technological innovation and higher cargo transfer
rates.
• Thirdly, private participation results in reduction in overheads and rationalisation of
the out of proportion manning scales, which is the bane of the low productivity,
through higher wages, competiveness and sensitive approach to employee-employer
relations.
• Fourthly, professionalisation of the management with induction of properly trained
and skilled personnel at different levels by restructuring and redesigning the
organisation would provide the desired professionalisation of the Industry.
• Lastly, the appearance of new Ports in the private sector would reduce the
monopolistic nature of the Industry and permit competitiveness through which
increased efficiency is ensured.
There are certain modes of privatisation , which find favour with the corporate
world. In case of Port Industry, the preferred method seems to be BOT (Build, Operate
335
and Transfer). The proposals to build and operate Ports at Dhamra and Gopalpur in
Orissa, Krishnapatnam in Andhra Pradesh, Vizhinjam in Kerala, Dhabol, Jaigad,
Vijaydurg, Deogad, Ratnagiri and Redi in Maharashtra and Hazira, Maroli, Simar,
Vansi-Borsi and Muthivirdi in Gujarat will be the trend setters for privte participation in
the Port development.
This trend, particularly participation in a significant way at the major ports, is
expected to gain momentum once guidelines on the subject are cleared by the Govt. of
India. These are some of the important advantages foreseen from private investment and
participation in the Port Industry. Thus, the emergence of the concept of 'Landlord' and
'Terminal Operator' dichotomy, a common system at the Ports in the developed
countries, is anticipated.
Indian ports now need to plan with a 15-20 year perspective. We are far behind
other Asian countries, be it China or a tiny state like Singapore. China's port policy of
1978 targeted for a port to be developed almost at every 50 kms along its coast, whereas
India with its 6000 kms long coastal line has only 11 major ports. Again, the Port of
Singapore, which does not have its own cargo handles 190 million tonnes of container
cargo per annum, whereas India's throughput of container cargo from its 11 major ports
is not even 20 percent of the above. This is despite the fact that India enjoys a
geographically advantageous location to handle transshipment cargo in addition to the
inland cargo. There is, thus, a huge deficiency in the present port infrastructure facilities
in comparison with what the country should have in the context of globalisation and the
recent thrust for export as planned by the Indian Government. Indian ports will have to
upgrade their technology levels to be comparable to international standards.
Therefore, the Port authorities need to take up area rejuvenation programmes.
Indian ports have large tracts of urban land, which could be optimally utilised for
facilitating the required restructuring. The process of restructuring and modernisation
would also involve a shift to better management and change in a worker's job
description. This would require up gradation of the worker's skills in line with new
needs. What therefore needed is an integrated and comprehensive approach and
possibly an appropriate institutional mechanism to give shape to our plans. Some of the
ports must become 'megaports' operating as the warehouse for the Indian subcontinent.
336
It may be advisable to develop at least two ports for this purpose, one each on the east
and west coasts. The world over, a port, which handles cargo of roughly 70 to 100
million tonnes, is considered to be optimal economic size. This is the size we should
target for the 'super' -or 'megaports'.
337