PORT

Indian shipping industry has over the years played a crucial role in the transport sector of India's economy.Approximately 95% of the country's trade by volume and 70% by value is moved through maritime transport. India is among the 20 leading merchant fleets all over the world. The country has 12 major ports and 200 minor ports. The twelve major ports are Kolkata (including dock complex at Haldia), Paradip, Visakhapatnam, Chennai, Ennore and Tuticorin on the east coast and Cochin, New Mangalore, Mormugao, Jawaharlal Nehru at Nhava, Mumbai and Kandla on the west coast.

Ports provide an interface between the ocean transport and land-based transport. In the initial years, the traffic was being handled mostly at major ports. However, over the years, non-major ports have also witnessed growth in traffic.

Performance of Major Ports

Traffic growth: The major ports handled a total traffic of 530.39 million tonnes during 2008-09,registering a growth of 2.1%.About 80 % of the total volume of traffic handled was in the form of dry and liquid bulk, with the residual consisting of general cargo, including containerized cargo. There was an impressive growth of 11.05 % per annum in container traffic during the five years ending 2008-09.

Capacity addition: The annual aggregate cargo-handling capacity of major ports increased from 532.07 million tonnes per annum in 2007-08 to 574.77 million tonnes per annum in 2008-09. The average turnaround time decreased from 3.93 days to 3.87 days.

Performance: The average output per ship berth-day improved from 10,071 tonnes in 2007-08 to 10,473 tonnes in 2008-09. The pre-berthing waiting time at major ports on port account decreased from 11.40 hours in 2007-08 to 9.55 hours in 2008-09.

Port-wise handling capacity as well as Traffic Handled during the year 2008-09 is given below:

Source:Ministry of Shipping,Government of India

National Maritime Development Programme

National Maritime Development Programme has been formulated keeping in view the future traffic projections. The objective of the Programme is to bring up the levels of performance in the maritime sector to international benchmarks. Out of the total 387 schemes/ projects in major ports, shipping and IWT sector which have been identified under the Programme. The total investment envisaged in the programme is Rs.100,339 crores out of which Rs.55,804 crores is for Major Ports and Rs.44,535 crores is for Shipping and IWT sectors. In the Port sector, a total of 276 projects have been identified under the programme for implementation by 2011-12. Out of these about Rs.34,505 crores is expected from private sector, Rs.3,609 crores is expected to be provided through budgetary support and Rs.13,772 crores is proposed to be financed through internal resources of the Major Ports and the balance from other sources. The objective is to upgrade and modernize the Port infrastructure in India and benchmark its performance against global standards. In the Shipping sector, a total of 111 projects involving total investment of Rs.44,535 crores over a period of 20 years have been identified for inclusion in the Programme. Out of this, Rs.13,775 crores are expected to be through budgetary support,Rs.17,460 crores through internal and extra budgetary resources and Rs.13,300 crores through private investment. The activities covered under the Programme include tonnage acquisition, maritime training, coastal shipping, aids to navigation, shipbuilding and building up of IWT infrastructure.

Recent Initiatives

Mode Concession Agreement (MCA)

The Government has finalized a Model Concession Agreement (MCA) to ensure uniformity in the contractual agreements to be entered by the major ports with the selected bidders for the BOT projects to be developed through PPP mode. It will also enable the prospective bidders to have prior knowledge of the contractual obligations of both parties and,therefore, ensure transparency.

New Tariff Guideline

For fixing tariffs, the Department of Shipping has formulated new tariff guidelines, Tariff Authority for Major Ports (TAMP) an autonomous body under the Department of Shipping, shall now follow a normative cost based approach for fixing tariffs. These tariffs will act as a ceiling and will be indexed to inflation and the private operators are free to charge below these ceilings.

Rail Road Connectivity of Major Ports

The committee on infrastructure (CoI) headed by the Prime Minister has set up a committee of secretaries (CoS) under the Chairmanship of Member Secretary (Planning Commission) to review the rail road connectivity of major ports which recommended that each major port should preferably have a minimum of a four-lane road and double line rail connectivity and these should be established within a fixed time frame.

Ennore Port Ltd. (EPL)

Ennore Port Ltd. (EPL) has also signed concession agreement with selected bidders for development of an eight million tonnes per annum (MTPA) iron ore terminal on BOT basis.The Government has approved the project for undertaking capital dredging phase-I by EPL at an expenditure of US $ 18.41 million. EPL will bear the entire expenditure for this capital dredging project for providing a depth of (-) 15 metre below CD for the new marine liquid, iron ore and coal terminals being developed on BOT basis. The physical progress upto the month of November 2008 was 80 per cent.

Foreign Direct Investment (FDI) Policy

Foreign direct investment upto 100 per cent under the automatic route is permitted for construction and maintenance of ports and harbours.

Policy Framework

Cruise Shipping Policy-2008

Objectives

• To develop India as Destination as well as Source Market with state of art infrastructure and appropriate marketing strategy
• To increase the number of cruise ship calls and passenger arrivals in a sustainable manner
• To achieve a target of at least 10 lakh cruise passengers landings per year by 2010.
• To strengthen inter-sectoral linkages, whereby cruise liners source the requisite supplies of goods and services from local Indian suppliers
• To consolidate existing ports of call, explore other ports and suitable anchoring sites on the Indian coast with a view to making additional cruise ship calls to other areas of the country.
• To operationalise appropriate promotional programmes that would effectively convert cruise passengers to long stay visitors.
• To maximize the benefits from the cruise industry consistent with protection of environment.
• To ensure that the cruise shipping industry in India becomes internationally competitive with other destinations and contributes to the economy in terms of generation of foreign exchange, income, employment and business opportunities.
• To attract the right segment of foreign tourists to cruise shipping in India
• To popularize cruise shipping with Indian tourists.
• To enhance absorptive capacity of the country by developing existing and new visitor attractions, including event attractions in line with India’s efforts to improve the tourism product.

Full text of the policy

The Shipping Trade Practices Bill, 2008

A Bill to provide for bringing transparency in trade practices adopted by maritime transport logistics service providers in respect of services rendered by them for arranging transportation of containerized cargo; registration of such service providers and their obligations; mode and manner of fixing tariff by the service providers; EXIM (Export Import) and for matters connected therewith or incidental thereto.

Full text of the Bill

Draft Policy(Modified) for Maritime Sector

The importance of maritime infrastructure in facilitating international trade is well recognized. It is observed that about 95% by volume and 70% by value of the country’s trade is carried on through maritime transport. Having regard to the current level of India’s share in global merchandise trade, the strengthening of the maritime infrastructure would have a favorable impact on the country’s trade front and also on economic growth. The country’s long coastline of around 7517 kms spread on the western and eastern shelves of the mainland and also along the Islands is a natural resource capable of being harnessed for the country’s trade and tourism development.

The maritime policy has been formulated to address the issues for strengthening the sector through synergies of initiatives of the Centre and the States and encourage the flow of investments into the sector - for up gradation of infrastructure and for modernization of facilities in respect of maritime ports, shipping and IWT sectors. In addition, the policy would help assure the status and efficiency of fixed and mobile maritime infrastructure and as a concomitant, ensure that investments in human capital optimize the country’s factor and resource endowments. As part of this comprehensive strategy towards building a vibrant and responsive maritime sector, reliable contractual procedures with built in safeguards would also be positioned, wherever required, to encourage competition.

The policy proposes to adopt a holistic approach for the development of port sector covering aspects of integrated development, connectivity, organizational and institutional arrangements, etc.

Objectives of the policy

The Policy for the maritime sector would emphasize the importance of cost effective movement of cargoes, transparency of decisions on objective considerations in matters of investment decisions, the efficiency of operations of the infrastructure as well as the relevance of core competent maritime personnel. The programmes under the Policy
would address the following: -

• Modernizing the existing ports and upgrading their facilities in order to bring them on par with the leading ports of the world.
• Developing new ports in order to fully utilize the vast coastline of the country and the available draft for deriving the maximum economic advantage.
• Promoting hinterland connectivity to ensure least-distance access of the country’s cargo to the ports and also offer choice of ports in the region and terminals inside the ports to Trade.
• Fostering Port specialization and inter-port complementarity for overall optimization of port facilities and the efficiency at the Ports.
• Facilitating the increased flow of private investment, both domestic and foreign, and at the same time ensure a competitive environment that would preclude prospects of emergence of monopolies.
• Providing for institutional safeguards for the port infrastructure provider (public authorities/private sector – be it domestic or foreign/joint ventures) regarding investments and ensuring compliance of service standards to the
  users.
• Promoting multimodal transport in the interest of time and cost efficiency.
• Facilitating the acquisition of Indian tonnage for securing a significant share for the country in world tonnage and for increasing the share of Indian bottoms in the carriage of the country’s overseas traffic through cargo support to Indian flag vessels.
• Promoting and strengthening shipbuilding, ship-repair and ship-breaking activities including promotion of indigenous ship design and research.

Full text of the policy

• Other policies

Useful Web links

Department of Shipping: http://shipping.nic.in

Indian Ports Association: http://www.ipa.nic.in