Port: Sector Trends

January, 2008

EXIT
 Contents
1. Overview of the Port Sector
a) Global trends in the sector
b) Expected Requirement of Funds
2. Traffic Forecasts
a) Current cargo distribution
b) Capacity forecast
c) Demand –Supply gap
3. Port Connectivity
a) Dedicated freight corridor
b) Project for improving rail connectivity of ports
c) Golden Quadrilateral
4. Residual issues
a) Model Concession agreement vis-à-vis project parameters
b) Implication on shareholding pattern
c) States own framework
d) Safeguarding PPP interests

2.
Overview of the Port Sector
 India is following international trends in the Port Sector

International Trends Situation in India

•High growth in world trade: Merchandise trade •Same: Traffic at Major port has grown by average 10% each year
Growth
Growth grew by 8 % in 2006, 6% in 2005 and is expected this decade. Minor ports grew at more than 12%
to grow by 6 % in 2007.

•Ports are serving as intermodal links as critical •Getting there: More ICD/CFS being set up near ports with value
Intermodal
Intermodal nodes in international supply chain networks. added services. Road and rail connectivity improvement projects
Links
Links launched

•Increasing privatisation: Shift from service port •Same: Major Ports are gradually increasing participation from
Privatisation
Privatisation to landlord port model private sector. 13 terminals with capacity of 38.8 mtpa operational

•Increasing containerisation: Top 20 container •Same: Container traffic at Major Ports grew at CAGR of 15.9% from
ports witnessed double digit growth in the last 1999-00 to 2006-07 and during last year the growth was

Containerisation few years overwhelming 21.73%. Even during first half of FY08 container traffic
Containerisation
at JNP grew at 25%. Other cargo grew at less than 6%.

• For year 2006-07, Containerisation level in India is around 68%.

•Traffic concentration on large intermodal •Same: One port JNPT handles 60% of all container traffic among
Traffic
Traffic platforms: first 10 containers ports handled 31% major ports.
concentration
concentration of the world traffic in 1980, and more than 40% •Dry Bulk traffic is concentrated on three ports in the east – Vizag,
today. Paradip and Kolkata

Industry
Industry
concentration
concentration •Emergence of few global players •No such trend is there in India, but global payers are bullish at
Indian ports and taking over operations where ever possible.
Vessel
Vessel trends
trends •Increasing speed and size of vessels •Indian ports do not have capacity to handle such vessels. However,
4. plans have been made to improve capacity and channel depth
Source: World Bank, UNCTAD, WTO, CRISIL Analysis
 ….Still a long way to go
• Installed port capacity in India and China are ~0.75 btpa (0.504 + 0.25 ~ major and minor port
capacity) and 5.6 btpa respectively.
• Container terminal capacity in China is ~60 m teu vis-à-vis India’s capacity of 8.6 million teu in
2006-07.
• The largest container vessel making a call at JNP India’s premier container terminal is 6,000 teu,
whereas Emma Maersk (more than 13,000 teu capacity) makes call at a number of Chinese ports
namely Yantian, Hong Kong, Ningbo, Xiamen etc.
• Chinese ports the average turnaround time is 0.8-0.9 days whereas at JNP and Visakhapatnam
(main ports for Container and Bulk) is 1.67 days and 3.65.
• As per Federation of Indian Mineral Industries (FIMI) rail freight in Australia, Brazil and other
developing nations like China is around Rs. 0.43 per tonne per Kilometer whereas in India it is
nearly four times higher at Rs. 1.81 per tonne per km (and is increasing).

For a Vessel of 2500 teu and 26,000 GRT the vessels charges at Indian and other regional ports
Vessel related charges at various ports in India, Asia and Far-East Asia region (USD)

Marine Charge Hong Visakhapa

US $ Mundra JNP Pipavav Cochin Dubai Mauritius Aden Salalah Singapore Kong Colombo tnam Chennai
Port Dues 14,300 2,785 2,808 6,656 1,275 1,170 910 858 1,566 1,389 1,911 6,526 5,980
Pilotage 4,961 9,828 14,466 347 780 468 272 691 2,031 1,911 8,845 9,282
Tug 409 3,575 750 2,504 1,154 1,447 764
Berthing 259 1,521 190 166 148 -
Harbour Dues 304 - - -
Berth Hire 1,300 770 1,092 2,059 1,535 967 109 447 601
Total Charges 15,600 8,515 13,728 23,182 2,290 5,525 3,953 3,824 5,112 5,982 4,696 15,818 15,863

* Consolidated charges are given at Salalah Web-sites. *Berth-hire and tug charges are for a shift of 8 hours.
5.
Source: Various Port-websites and TAMP.
 ….Still a long way to go

• The draft at Singapore is 19+ m where as at JNP its 13.5m only.

• The berth length at Singapore and Dubai are 13,800 and 4,426 m whereas total berth length at
JNP is 3200 m (including 2 shallow berths of 600 m each) only.

• Bulk cargo handling cost at most of the Indian ports are in range of Rs. 35 per ton to Rs. 200 per
tonne depending upon the type of commodity, which is slightly on higher side when compared to
other international ports in dollar terms however, time spend in handling is much more.

Container handling charges at Indian port in Rs/teu Container handling charges at Dubai and Salalah

Service Pipavav JNPCT NSICT MICT Mumbai Container type Dubai (USD) Salalah (USD)
Gateway boxes (INR) Upto 20'
Ship-yard – loaded 3,000 2,210 2,210 2,720
Full 129 75
Ship-yard – empty 1,785 1,785 2,560
Full T'ship 143 140
Yard to rail (ICD) – loaded 3640 1,105 1,105 1,080 3,770
Empty 66 30
Yard to rail (ICD) – empty 1,105 1,105 1,040 3,270
Yard to truck – loaded 340 340 680 2,470
Empty T'ship 96 100
Yard to truck – empty 340 340 640 1,970
Total box cost Over 20'
Ship-road – loaded 3,000 2,550 2,550 3,400 2,470 Full 191 115
Full T'ship 199 200
Ship-rail – loaded (INR) 3640 3,315 3,315 4,375 3,770 Empty 90 40
Ship-rail – loaded (US$) 91 83 83 109 94 Empty T'ship 136 140

6.
 Expected Requirement of Funds

7.
 Going forward the XIth Plan, will see a doubling of port capacity
95% of total volume of international trade is handled The government is planning to more than double the
by Ports yet they face capacity bottlenecks capacity at Major and Minor Ports in the XI Plan
Traffic & Capacity at Major Ports in the past Capacity addition envisaged in XI Plan (MT)
120% 500 Total =1,575
456 450 114%
Capacity Utlisation (%)

100% 424

Traffic/Capacity (MT)
390 398
384
400
363 350
80% 344 345
314
291 288 300 97%
272
258
281 1002
60% 250 Major Ports
200 Total =737
40% 150
Minor Ports

20% 100
50 509 151%
0% 0
1999- 2000- 2001- 2002- 2003- 2004- 2005-
574
00 01 02 03 04 05 06 228
Capacity Utilisation Traffic Capacity
Present Capacity (Mar 07) Capacity by Mar 2012
Source: Indian Ports Association, CRISIL Analysis Source: Working Committee report on 11th FYP, CRISIL Analysis
The National Maritime Development Programme will be For Minor Ports states like Maharashtra, Andhra
major driver for investments in the Major Ports Pradesh and Gujarat are taking the lead
Expected
• Investment of Rs.55,804 crores in the major ports to Present Additional Capacity
State
boost the existing infrastructure at these ports. 276 Capacity Capacity by March
(Mar 2007) during 11th FYP 2012
projects identified.
Andhra Pradesh 18.5 84.3 102.8
• Will be implemented in two phases.
Gujarat 182.0 56.0 238.0
•Phase-I covers all investment till 2009 (from 2005- Karnataka Ports 4.0 26.0 30.0
06) Kerala 0.1 27.7 27.9
•Phase-II covers all the projects upto 2012. Maharashtra 11.1 85.2 96.3
• Around 64% of the proposed investment in major ports Tamil Nadu 0.9 28.8 29.7
are envisaged from private players. Others 11.8 37.1 48.9
8. Total 228.3 345.2 573.5
 And most of this will be driven by the NMDP
The NMDP will add 402 MT of capacity by 2011-12 in Major Ports by investments of over Rs. 55,000 Cr.
Project Head No. of Budgetary Internal Private Others** Total Total 58% of total
Projects Support Resources Investment (USD Billion)
investment will be for
Deepening of channels/ berths 25 2,731 3,340 185 48 6,304 1.54
Construction/reconstruction of berths 76 563 3,867 28,083 50 32,564 7.94 construction of berths
Procurement of Equipments 52 0 1,428 1,075 130 2,633 0.64 and most of it is
Rail and Road connectivity works 45 90 2,232 0 3,634 5,956 1.45
envisaged to come
Others*** 78 225 2,904 5,162 56 8,347 2.04
Total 276 3,609 13,772 34,505 3,918 55,804* 13.61 from Private players

SI. NO. Port Name Project Cost (Rs. Cr.)

1 J.N.P.T. 4th Container Terminal 3000.00
2 New Mangalore LNG terminal 2600.00
3 Cochin International Container Transshipment Terminal 2118.00
4 Cochin LNG Re-gassification Terminal 2050.00 Top 20 projects in
5 Tuticorn Outer Harbour Facilities 1865.70 NMDP
6 Ennore Port Ltd. LNG Terminal 1700.00 •Focus of projects is
7 Tuticorn Ship building yard 1350.00 for containers,
8 Ennore Port Ltd. Container Terminal 1300.00 LNG/POL and Coal
9 Kandla Berthing and allied facilities 1200.00
10 Tuticorn Development of Outer Harbour - construction of break water 1171.20
11 New Mangalore Outer Harbour for development of of Addl. Port Facilities 1325.00
12 Mumbai Two off shore container terminals 1228.00
13 Ennore Port Ltd. Mega Power plant coal terminal 760.00
14 Cochin Special Economic Zone 850.00
15 Cochin Crude Oil Terminal for Kochi Refinery 720.00
16 New Mangalore Container Terminal for transshipment 700.00
17 Kandla Offshore Liquid Terminal 698.38
18 Kolkata Port Trust Three riverine jetties at saugor 700.00
19 Viskhapatnam SBM facility for crude oil (HPCL) 540.00
20 Paradip Deep Draught Iron Ore Berth 504.77
Source: NMDP, March 2006.
*For the period F.Y. 2006-07 to F.Y. 2011-12. After deducting Rs. 6,038 crores that was expected to be spent by 2006-07, the remaining investments of
Rs. 49,765 crores are expected to take place by 2011-12.
9. ** Includes projects executed by other agencies. Eg, NHAI
*** Technology upgradation, illumination, storage area development etc.
 Government estimates indicate USD 22 Billion dollars of investment
11th FYP estimates that of the total Requirement, 67% will come from the private sector
Total Investments in 11th FYP
Investment plans of Major Ports (Rs. Cr.) Rs. Cr. (USD Billion)

Kolkata 1,098 3,138 4,236 (1.03)

Paradip 1,249 1,363 2,611 (0.64)

Vishakapatnam 1,396 1,625 3,021 (0.74)

Ennore 1,330 5,300 6,630 (1.62)

Chennai 1,255 834 2,088 (0.51)

Tuticorin 1,819 5,115 6,934 (1.69)

Cochin 1,554 6,282 7,836 (1.91)

New Mangalore 1,009 4,952 5,961 (1.45)

Mormugao 443 731 1,174 (0.29)

Mumbai 1,724 1,084 2,808 (0.68)

JNPT 4,465 3,453 7,918 (1.93)

Kandla 1,176 2,992 4,168 (1.02)

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Plan Outlay Private Sector

Ports 11th Plan Outlay Private Sector Total Investments in 11th FYP Rs. Cr. (USD Billion)
Total for Major Ports 18,533 36,868 55,401 (13.51)
Non-Major Ports 12,020 23,912 35,932 (8.76)
10. Total for All Ports 30,554 60,780 91,334 (22.27)
Traffic and Capacity Forecasts
 Traffic

12.
 Gujarat has had the maximum traffic but Karnataka and Goa have shown the highest
growth
Evolution of India Ports Traffic *
CAGR %
(In MT)

9.32
574

521
150
465 Gujarat 6.83
139
418
384 131
Total =368 93 Maharashtra 12.51
125
80
108 120 14.16
72 43 Goa
39 15.63
62 38 Karnataka
52 54 36 37 14 Kerala 1.1
29 28 14
22 26 22 14 74 Tamil Nadu
19 18 13 70 6.65
13 12 60
56
54 53 74 Andhra Pradesh
65 8.40
51 58
50 48 33 10.56
25 30 Orissa
20 21 24
54 West Bengal 11.92
31 31 36 42 47

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Source: NMDP report – March 2006, IPA, website-IPA
13.
*Includes data for Major and non-major ports
 Gujarat will retain the top position but Karnataka and Goa will have the highest
growth
Traffic Forecasts - Liquid
(In MT)
CAGR %

378
Gujarat 13%
332
303 Maharashtra 7%
275 184 Goa 2%
Total =248 159
144 Karnataka 5%
128
114 Kerala 17%
47
43 1 Tamil Nadu 15%
40
38 1 30
35 1 1 29
1 29 18 Andhra Pradesh 12%
25 27 15 24
13 15 20
10 16 17 Orissa 15%
14 38 45
29 31 34
9 11 13 15 16 West Bengal 4%
11 11 12 13 13
2007-08 2008-09 2009-10 2010-11 2011-12

Source: CRISIL Analysis

14.
*Includes data for Major and non-major ports
 Bulk traffic is dominated by the East Coast ports and they will grow faster than
western coast ports
Traffic Forecasts – Dry Bulk/Break Bulk
(In MT)
CAGR %

460

414 72 Gujarat 4%
376
352 68 Maharashtra 4%
37
Total =331 66
36 50 Goa 3%
67
62 33 22
48 Karnataka 6%
34 7
31 46 18
4
46 85 Kerala 45%
45 17
2
18 72
18 2 60 Tamil Nadu 14%
2
51 54 76
74 Andhra Pradesh 7%
70
58 61
Orissa 19%
65 77
39 42 52
West Bengal 8%
26 27 29 31 34

2007-08 2008-09 2009-10 2010-11 2011-12

Source: CRISIL Analysis

15.
*Includes data for Major and non-major ports
 Maharashtra and Gujarat dominate the container traffic but Tamil Nadu and Kerala
will grow much faster
Traffic Forecasts – Container
(In MT)
CAGR %

Gujarat 10%

Maharashtra 16%

Goa 4%

170 Karnataka 3%

Kerala 49%
146
16
119 Tamil Nadu 16%
14
98 15 79
Total =86 67 Andhra Pradesh 53%
11 12
58 0
44 51 0
15 18 Orissa 41%
0 0
9 36
0
4 4 24 32
20 22 4 6
0 7
0 West Bengal 19%
1
0
6 2
0
7 0
8 11 13
2007-08 2008-09 2009-10 2010-11 2011-12

Source: CRISIL Analysis

16.
*Includes data for Major and non-major ports
 Overall the east coast ports are expected to grow faster than the west coast ports
Traffic Forecasts – Total
(In MT) CAGR %

1009

893 Gujarat 10%

798
726
272
Maharashtra 10%
Total =665
241
Goa 3%
225
163
206 Karnataka 5%
187 146
51
132 53
49 Kerala 30%
123 42
111 47 47
47 34 Tamil Nadu 15%
46 146
46 45 26
43 18 124
15 101 Andhra Pradesh 10%
85 93
128
117
107 Orissa 18%
88 95
81 93
48 53 64
43 46 49 54 60 West Bengal 9%

2007-08 2008-09 2009-10 2010-11 2011-12

Source: CRISIL Analysis

17.
*Includes data for Major and non-major ports
 Capacity Forecasts

18.
 Bulk of the liquid capacity will be added by Orissa and Maharashtra
Major Ports Capacity Addition Forecasts - Liquid
(In MT)

SBM at Cochin
Berth for chemical and POL product at Ennore

Total =33
0 •IOC is setting up SBM at Paradip
6
0 •HPCL is planning to set up an
•Construction of two berths at Mumbai
18 SBM at Vishakhapatnam
0
14.3
0
1 14.1
0
27 0
15 6
5 14
0
2 5
0
3 0
3 1
0 0 0 1
0 0
2007-08 2008-09 2009-10 2010-11 2011-12
West Bengal Orissal Andhra Pradesh Tamil Nadu Kerala
Karnataka Goa Maharashtra Gujarat

Source: CRISIL Analysis

19.
 East coast is expanding capacity for bulk cargo
Major Ports Capacity Addition Forecasts – Dry Bulk/Break Bulk
(In MT)

• Two dry bulk berths at Haldia

•Coal and Iron Ore berth at Ennore

•Coal and Iron Ore berth at Paradip

38
5
29 4
0 1
2
26 4 1
0 3
8 2
7 20
0
Total =12 0
3 20
7 0 10
4
1
0 0
3 7 5 6
2
0 0 0
2007-08 2008-09 2009-10 2010-11 2011-12
West Bengal Orissal Andhra Pradesh Tamil Nadu Kerala
Karnataka Goa Maharashtra Gujarat

Source: CRISIL Analysis

20.
 Majority of additional container traffic is coming up on the west coast
Major Ports Capacity Addition Forecasts – Container
(In MT)

•Offshore container terminal at Mumbai

•Private •Transhipment terminal at Vallarpadam

container (Cochin)
berth at •Second container terminal at Chennai
Kandla

•Fourth container terminal at JNPT

35.8
33.5 0
0 •Ennore container terminal
10
7
1
0 26 18
0
13
Total =7
0
3 18
0 0
7 7 10
6
0 0 0 0
2007-08 2008-09 2009-10 2010-11 2011-12
West Bengal Orissal Andhra Pradesh Tamil Nadu Kerala
Karnataka Goa Maharashtra Gujarat

Source: CRISIL Analysis

21.
 Capacity addition is much less than expected for liquid bulk
Minor Ports Capacity Addition Forecasts - Liquid
(In MT)

•Gujarat has recently invited EoI

for nine ports

17 •Tamil Nadu has awarded captive

Total =0 jetties to private players for their
9.2
17 0
2 POL/Chemical traffic
0
2
0 7
0 2
0 0 0 00
2007-08 2008-09 2009-10 2010-11 2011-12
West Bengal Orissal Andhra Pradesh Tamil Nadu Kerala
Karnataka Goa Maharashtra Gujarat

Source: CRISIL Analysis

22.
 East coast is expanding capacity for bulk cargo led by Orissa and Andhra Pradesh
Minor Ports Capacity Addition Forecasts – Dry Bulk/Break Bulk
(In MT)
•Gujarat Ports

•Machilipatnam & Gangavaram in AP

76.35 (Nizampatnam concession recently
cancelled due to land allotment issues)
17

0
•Krishnapatnam •Dhamra (Orissa)
(AP)
•Karaikall (Pondicherry)
34
•Kirtania (Orissa)
30
0
3
0
3 26.5
0
7 •Gopalpur (Orissa)
10 0
0
Total =18
25 0
10
18 20
4 14
6
0 0 0 0 0
2007-08 2008-09 2009-10 2010-11 2011-12
West Bengal Orissal Andhra Pradesh Tamil Nadu Kerala
Karnataka Goa Maharashtra Gujarat

Source: CRISIL Analysis

23.
 Majority of additional container traffic is coming up in Maharashtra
Minor Ports Capacity Addition Forecasts – Container
(In MT)

•Jaigad & Rewas ( Maharashtra)

•Vizhinjham (Cochin)
•Dighi
(Maharashtra) •Kulpi (West Bengal)

40.7
0

17 •Rewas (Maharashtra)
30
0
0

15 30
Total =0
7 0
0
7 9
0 0 0
0 0
2007-08 2008-09 2009-10 2010-11 2011-12
West Bengal Orissal Andhra Pradesh Tamil Nadu Kerala
Karnataka Goa Maharashtra Gujarat

Source: CRISIL Analysis

24.
 Gujarat, Maharashtra, Orissa, AP and TN are the main drivers of additional capacity
in ports
CRISIL Forecast of Capacity in all ports at end of 11th Plan
(In MT)

Liquid Dry Bulk / Break Container Total

Bulk
Gujarat 160 107 20 286.94

Maharashtra 60 46 147 252.86

Goa 2 46 1 48.97

Karnataka 27 38 0 65.33

Kerala 22 16 30 68.73

Tamil Nadu 29 89 45 163.16

Andhra Pradesh 48 111 4 163.39

Orissa 48 124 0 172.40

West Bengal 21 40 22 82.53

Source: CRISIL Analysis

25.
Includes Major and Minor Ports
Demand Supply Gap
 Forecasted Traffic and Capacity – XI Plan and CRISIL’s View

Forecasted Capacity (MT)

Offshore liquid terminal and greenfield
Gujarat 73 berths at Tekra (Kandla) estimated to
come up after 2012
Maharashtra 31

Goa 34

Karnataka 25

Kerala 14
Ennore projects of LNG and UMPP Coal berth
Tamil Nadu 79 estimated to come up after 2012
Andhra Pradesh 48 Nizampatnam concession cancelled. Kakinada anchorage
estimated to come up after 2012
Orissa -53
Planning Commission has not considered Kirtania
West Bengal 20

-30 20 70 120 170 220 270 320 370

Capacity (MT)

CRISIL Capacity XI Plan Capacity XI Plan Traffic

Source: Report of Working Group for Port Sector for XI Five Year Plan, CRISIL’s Analysis
27.
Port Connectivity
 Dedicated Freight Corridor
Western corridor

• Comprises of 1483 km of double line diesel track

from JNPT to Dadri via Vadodara-Ahmedabad-
Palanpur-Phulera-Rewari.

• Alignment has been generally kept parallel to

existing lines except provision of detour at Diva,
Surat, Ankleshwar &, Bharuch, Vadodara, Anand &
Ahmedabad, Palanpur, Ajmer, Ladpura, K.garh,
Phulera, Ringus and Rewari.

Eastern Corridor

• The Eastern Corridor encompasses a double line

electrified traction corridor from Sonnagar on the
East Central Railway to Khurja on the North Central
Railway (820 Km), Khurja to Dadri on NCR Double
Line electrified corridor (46 Km) and Single
electrified line from Khurja to Ludhiana (412 Km) on
Northern Railway. The total length works out to
1279 Km.
29.
 Rail connectivity to West coast ports
BHATINDA
Future connectivity for ports in Gujarat
(298)
apart from linkages to DFC
(142)
(300) DELHI • Luni – Bhildi – Samkhaili to provide
(78)
SURATGARH
(141) additional link for Kandla and Mundra apart
REWARI MATHURA from future ports like Jamnagar and
(182) (74)
(123) Positra.
ALWAR
BIKANER
(60)
• Bhildi-Palanpur-Mehsana link will give
BANDIKUI
(173)
alternate route to cargo from Punjab to
MERTA (91) (324)
JAIPUR Mumbai region ports.
(104) (154)
(55)
PHULERA • Broad gauge conversion between Rewari
JODHPUR
(32)
(80) and Ajmer ease traffic on the main track
KOTA
(140)
LUNI (104) AJMER between TKD and Mumbai and will also
(235)
MARWAR provide additional loop for Kandla and
(275)
(218) NAGDA
Towards BHOPAL Mundra.
(41)
RATLAM
BHILDI (46)
PALANPUR
• The recently submitted report by RVNL to
(255) (65) railway board states that it may take more
SAMKHIALI MEHSANA (185)
VIRAMGAM then 12 years to complete all the bridge
(62)
(235)
BHUJ (54) AHMEDABAD
(58) works coming in the route of DFC. Thereby
ADIPUR (79)
GANDDHID HAM (36)
(57) (66) ANAND GODHARA putting question on early arrival of DFC.
KANDLA PORT (75)
VADODARA
MUNDRA PORT
(116) Broad Gauge
JAMNAGAR POR T (5) (85) SURENDRA NAGAR
Towards MUMBAI Metre Gauge
JAMNAGAR RAJKOT (under conversion)
BG (Elect.)
30.
 Rail project to increase connectivity of west coast ports
Panvel - Jasai – JNPT doubling of 28 km of track
Diva-Kalyan doubling of 5&6 line. Length is 11 KM (Railway + BOT)

Gandhidham-Palanpur railway line for port connectivity. Arsikeri-Hasan-Mangalore. To connect Mangalore port to
Length is 313 km and project require lenders. the hinterland

31.
 Rail project to increase connectivity of west coast ports
Rewari-Ajmer-Phulera_ringus Gauge change to increase port connectivity
62 km of new railway track for connecting Dahej

Bhildi- Samdhari gauge conversion of 1400 km

Delhi-Rewari gauge conversion of 572 km

32.
 Rail project to increase connectivity of east coast ports
Thanjavur –Villupuram via cuddalore
Salem-Cuddalore via Vriddhachalam 191 km for port connectivity

Banspani-Daitari, new line and electrification Talcher-Cuttack-Paradeep (2nd Bridges on Mahandi & Birupa)_Doubling
for Paradip port connectivity

33.
 Rail project to increase connectivity of east coast ports
Obulavaripalli - Krishnapatnam 129 km New Line
Attipattu-Korukkupettai 3rd Line of 18 km

Panskura - Haldia Phase II, doubling 53 km Haridaspur – Paradeep, new line of 78 km

34.
 Golden Quadrilateral
All lengths in Kms.

Length
Corridor (NH) BAF AAF Diff. 4-Laned U-I BOT

Delhi - Kolkata (2) 1469 1453 -14 1001 452 140

Kolkata - Chennai (
5, 6 & 60) 1751 1684 -90 1436 248 285
Chennai - Mumbai (
4, 7 & 46) 1278 1290 12 1099 191 304
Mumbai - Delhi
(8,79,76) 1454 1419 34 1408 11 128
Total 5,952 5,846 -106 4944 902 857
BAF: Before Alignment fixing, AAF: After Alignment fixing,
U-I : Under Implementation

Port connectivity projects under implementation

Original/Estimated
Port Stretch NH Length (KM) completion
Haldia Port NH-41 (from Kolaghat on NH-
6 to Haldia) 41 53 Dec-09
New Mangalore Port NH-17 (Suratkal-Nantur
Section), NH-48 (Padil 13,17,48 37 Jun-08
Tuticorin Port NH-7A (Tuticorin - Tirunelveli
section) 7A 47.2 Dec-07
Paradip Port NH-5A (from km 0 to km 77)
5A 77 Jan-08
Chennai - Ennore TPP Road,
Express Way SR 9 Jul-08
Chennai - Ennore Inner Ring Road & Manali Oil
Express Way Refinery Rd. SR 15 Aug-08
Cochin Port km 348/382 - km 358 750
Including 5 Major Bridges 47 10 Jun-09
Jawaharlal Nehru Port SH-54 + Amramarg + Panvel
Phase-II Creek Bridge SH 54 14.5 Jan-08
NH Connectivity to
ICTT
35. Vallarpadam
SH 17.2 Feb-10
Residual Issues
 MCA now outlines the role of public and private players…

MCA Impact

• Traffic risk is with the developer • Since tariff are set such that return of

• But concession period can be increased by 16% is guaranteed and minor ports have

seven years if traffic is lower than forecast. Eg. no restriction on tariffs so revenue risk is
minimal
Traffic
Traffic – a shortfall of 10% in the target traffic after 20

Risk
Risk years will lead to extension of the concession
period by 5 years.
– an increase of 6% in the target traffic will
reduce the concession period by 18 months
• Change in concession period gives
greater comfort that investments will get
recovered but imparts greater uncertainty
in business planning

• Technical parameters will focus on the level of • Technical parameters will leave room for
service for the users innovation
Project
Project • Construction period is part of concession
• Concession period fixed at 30 years
Scope
Scope period incentivising concessionaire to
&& CP
CP reduce construction period

37.
 … and the MCA now outlines the role of public and private players
MCA Impact

• Due to capacity constraints there is • TAMP sets tariff at base year and it
lack of competition. increases indexed to inflation
• Hence, TAMP will continue to set • This impart greater certainty to the tariff
tariffs but it will capped at levels of setting method thus giving greater comfort
Tariff
Tariff setting
setting competing ports in the region. to the investor
• Tariff increase will be indexed @ 40%
to WPI

• Concession fee is Rs 1 per annum • Revenue share system reduces benefits

for the concession period from upside
• If no subsidy grant is sought then • Revenue share is less during initial period
bidding based on revenue share, else and increases progressively. This will make
bidding based on amount of subsidy it easier to meet debt service obligations
Concession
Concession sought
Fee
Fee && • Revenue share will increase by
Grant
Grant additional 1% every year

• 20% of TPC during construction as

Equity Support

• 20% of TPC during O&M as equity

support

38.
 … while States, are putting in place the appropriate framework….
State policy

• Tariff Fixation: Free

• Labour employment: No restriction

Andhra
Andhra • Land acquisition: Government will assist using the Land Acquisition Act.
Pradesh
Pradesh • Water and Power connection: Government will help

• Concession fee: 2.5 % of gross income per annum for Greenfield Ports

• Wherever feasible Captive Jetties/Captive Ports will be permitted

• Suo-moto proposals: Swiss challenge.

• Tax Incentives: Exemptions on Sales tax, seigniorage charges, Stamp duty etc if project is unviable

For Greenfield, All-Weather Ports

• Tariff Fixation: Free

• Land acquisition: Government-owned land to be transferred at market value

Maharashtra
Maharashtra
• Concession period: 50 years

• Equity participation by the state government upto 11 %

• Tax Incentives: Exemption from payment of registration fee and stamp duty, MMB to charge concessional wharfage

• Road connectivity upto the nearest national highway to be part funded by MMB/ state government

For Greenfield, All-Weather Ports

• Tariff Fixation: Free

• Land acquisition: Government responsibility

Gujarat
Gujarat • Concession period: 30 years + 20

• Project feasibility study: Ready

• Lenders protection: Yes

• Compensation on project transfer: Yes

39.
 … but, to ensure PPP interest following interventions are required

Issues
Issues Interventions
Interventions

• Greater freedom should be

• Minor ports enjoy much less regulatory oversight
Policy
Policy granted to Major Ports. The
giving more freedom to private operators
differences
differences government should restrict
• Private operators at Major ports feel that TAMP
between
between Minor
Minor guidelines on tariffs are restrictive
itself to just a coordinating
ports
ports and
and Major
Major • But majority of PPP opportunities are available at
role to ensure that expensive
ports
ports Major Ports infrastructure is not
duplicated
• While currently tariffs at major ports are set on cost
plus basis guaranteeing ROCE of 15%, a debate is
raging on what should be the appropriate method.
• Government needs to
• Two schools of thought
establish a tariff setting
Uncertainty
Uncertainty over
over •Present system is fine since capacity does not
philosophy and outline a clear
tariff
tariff setting
setting allow free competition
•Present system does not incentivise efficiency.
roadmap for its
philosophy
philosophy
Tariffs should be benchmarked to nearby implementation
international ports and subsequent increase
should be predetermined

• Time taken Process Time Taken (months) • Time taken for different
Slow
Slow bidding
bidding Detailed Project Report 6
to procure a approvals should be reduced
process
process Approvals 6
typical port • Procedure should be
RFQ 3
project is streamlined. Eg.
RFP 3
very long
Financial Closure 6 Environmental clearance
Total 24 before bidding
40.
 … but, to ensure PPP interest following interventions are required

Issues
Issues Interventions
Interventions

• Evacuation infrastructure needs to be properly

defined for hinterland movement • NHAI has to speed up road
Hinterland
Hinterland connectivity projects
• While railways have granted licenses to private
connectivity
connectivity is
is container train operators issue of track capacity • Railways should encourage
poor
poor remains the SPV model as it has been
• For track capacity Dedicated Freight Corridor is being successful – Pipavav
built but do we have sufficient capacity in Southern Railway, Hassan Mangalore
India where the transshipment terminals are coming and Kutch Railway
up?

• Case of Vallarpadam/ Vizinjham

Coordination
Coordination • Both ports are getting developed simultaneously near
between
between Major
Major to each other • Maritime States Development
and • Both are aspiring to become Hub Ports for Council needs to coordinate
and Minor
Minor Ports
Ports
transshipment developments better
• It is unlikely that both can emerge as Hub Ports,
hence investments may get impacted

41.
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42.
EXIT