CHAPTER Traffic Handled by Major Ports. 2.3 Hinterlands of Major Ports. 2.4 Private Sector Participation

Transcription

1 CHAPTER2 MAJOR AND MINOR PORTS IN INDIA TRAFFIC, HINTERLANDS AND STATE POLICY 2.1 Traffic Handled by Major Ports 2.2 Development of Major Ports during the Plan Periods 2.3 Hinterlands of Major Ports 2.4 Private Sector Participation 2.5 Role of Intermediate and Minor Ports 2.6 Position of Intermediate and Minor Ports in India 2.7 Conclusions 38

2 India had only five major ports at Calcutta, Bombay, Madras, Cochin and Visakhapatnam, when it became independent in Today 11 major ports and 139 operable intermediate and minor ports serve its 6000 kms of the mainland coastline. Of the eleven major ports, viz., Kandla, Mumbai, Jawaharlal Nehru Port (JNP) Murmagao, New Mangalore and Cochin fall on the west coast and the remaining five - Calcutta/Haldia, Paradip, Vishakhapatnam, Madras and Tuticorin on the east. The total cargo traffic of all the ports has grown significantly from a mere million tonnes in to million tonnes in (see Table 2.1 ). About 95 percent of the total cargo is handled at the above major ports. While the increase in traffic at these ports has been 9.9 percent, minor ports have accounted for a higher growth of 10.3 percent. However, the latter's contribution to total cargo traffic is only marginal. A major port is one which is administered, maintained and developed by the Central Governn1ent through the instrument of the Major Port Trusts Act, The members of the Port Trust as well as its Chairman are appointed by the Central Government. According to the Ports (Technical) Committee of India (1948), the facilities at a major port should include an all-weather sheltered harbour, modern berths which can take alongside steamers with atleast 9.14 m draft, as also direct road and rail links with the hinterland. The intermediate and minor ports fall under the Concurrent List, i.e., list III in the 7th Schedule of the Indian Constitution and are administratively under the control of the respective State Governments, the Centre providing only technical assistance. At the time of partition of the country, the Major Ports, were in a war worn and. dilapidated condition as a result of the intensive use, lack of proper maintenance and inadequate replacement of the assets during the period of World War II. The loss of the Port of Karachi further aggravated the situation. The remaining Major Ports of Calcutta, Bombay, Madras, Cochin and Visakhapatnam were not in a state to cope with the then existing traffic volumes. With rapid industrial development generated during the successive Five-Year Plans, there has been a steady growth of traffic at the various Major Ports in the country. There have been significant changes in the composition of the traffic during the 18 years of planning. Besides the three main commodities of iron- 39

3 ore, P.O.L. and fertilizers, the traffic in foodgrains also increased slightly in the decade of the 1960s. Port development during this long phase has witnessed changes on several aspects like traffic, hinterland delineation, newer but efficient methods of cargo transfer involving different modes (multi-modal transport), labour, environmental aspects and so on. All these issues are addressed in this chapter separately, both for Major and Minor Ports so as to lend an overview of the post-independence development in the Indian port system. 2.1 Traffic Handled by Major Ports It may be noted that the major ports have been handling around 90 percent of the sea-borne traffic of India. The share of major ports on the east coast in the total traffic is slightly lower (48 percent) than the share of the west coast ports (52 percent). This ratio has not undergone much change during the 1990s as is evident from the table 2.1. It should also be noted that the compound annual growth rate has been high for Calcutta (9.71 percent), followed by Kandla (9.20) and New Mangalore (9.16 percent). But the port, which stands out from the rest, is Jawaharlal Nehru Port (23.53 percent). It is however, interesting to note that the share of minor ports have been on the rise over the years (Table 2.1 ). Table 2.1 Share of Major and Minor Ports in Cargo Traffic ( to ) (Traffic in million tonnes) Ports Major Ports Minor Ports Total percent Share of Major Ports percent of Share of Minor Ports Source: Bas1c Port Statistics oflndm, MOST, GO I. 40

4 As has already been mentioned, the major ports in India handle more than 90 percent by volume of the sea borne trade of the country. In , (i.e., beginning of the First Five Year Plan), traffic handled by Major Ports was 20 million tonnes, which grew to 243 million tonnes in as seen in Table 2.2 Year Table 2.2 Traffic at Major Ports ( ) Traffic (m tonnes) Source: Bas1c Port Statistics, MOST, GOI. A detailed study of the growth of traffic at various major ports in the 1950s and 1960s reveal that the traffic at the Calcutta Port, which was the premier port of the country in terms of quantum of traffic handled, has been more or less static and has even registered a decline in the case of certain commodities. The Mumbai Port, on the other hand, has emerged as the premier port of the country in terms of traffic. There has been a substantial growth of traffic at ports of Madras, Cochin and Visakhapatnam. The share of the various Major Ports in the total traffic handled in is.arranged in descending order in Table 2.3. Commodity-wise break-up of the traffic handled by the major ports in the year is given in Table

5 Table 2.3 Share of Major Ports in Total Traffic ( ) Port Rank Traffic in percent Rank Traffic in percent of Million of Million Total Tonnes Total Tonnes Kandla Vishakhapatna m Chennai Mumbai Mormugao Calcutta New Man galore Paradip Co chin Tuticorin JNPT Haldia Total Source : Compiled from Baste Port Stattsttcs, MOST, GOI. Table 2.4 Commodity-wise Break-up of Traffic ( ) Commodity Traffic in Million Percent of the Total Traffic Tonnes POL Iron Ore Fertilisers and Raw Materials Coal Containers Other Cargoes Total Source: Baste port Stattsttcs, MOST, GOI. 42

6 Container Traffic Containerisation has brought about revolutionary changes in the concept of general cargo handling through by its higher degree of unitisation and intermodal flexibility related to shipping and port activities. India joined the container era rather late in 1973 with the provision of interim container handling facilities at Cochin and Bombay ports. The growth of aggregate container traffic handled at the Indian major ports between is as follows: Table 2.5 Growth of Aggregate Container Traffic ( ) Year Container Traffic Percent of Growth of In Million Tonnes InLakh TEUs TEUs (-) Source: Basic Port Statistics, MOST, GOI It may be seen from the above table that growth rates have been improving over the years in the liberalised and deregulated regime of the economy. The main container handing ports of India are Bombay, JNP, Madras, Calcutta and Cochin where Container 43

7 Terminals have been developed. Tuticorin and Kandla are also registering an increase in container traffic, even though there are no specialised container handling facilities provided at these ports. 2.2 Development of Major Ports during the Plan Periods In Table 2.6 investment in the development of major ports during various plan periods is depicted. Plan Period Table 2.6 Investment in Development of Major Ports Investment (Crore Rs.) 1st Five Year. Plan ( ) nd Five Year. Plan ( ) rd Five Year. Plan ( ) Annual Plan ( ) Annual Plan ( ) Annual Plan ( ) th Five Year. Plan ( ) th Five Year. Plan ( ) Annual Plan ( ) Annual Plan ( ) th Five Year. Plan ( ) th Five Year. Plan ( ) Annual Plan ( ) Annual Plan ( ) th Five Year. Plan th Five Year. Plan Awaited (Annual Plan ) Source: Baldeo Sahai, 'Indian Shipping after Independence', Indian Shipping - A Historical Survey, Ministry of information and Broadcasting, Publications Division, GOI, New Delhi 44

8 The principal objective of the development programmes for Major Ports in the First Five Year Plan was to rehabilitate and modernize facilities at the existing Major Ports, especially those which had suffered heavy wear and tear during the war and to provide a major Port at Kandla to handle the traffic which was previously handled by Karachi and also to build a modem Marine Oil Terminal to cater to the needs of two oil refineries at Trombay. In the First Five Year Plan, only Rs million were spent on the development of ports. The longest period of work done was at Bombay, to put up marine oil terminal with three oil jetties commissioned in 1956 to feed the first oil refinery of free India at Mumbai. In the Second Five Year Plan, the projects, which had remained unfinished in the First Plan, were taken up. In addition, new investments were provided for modernising, equipping and providing additional berthing facilities at the docks of Calcutta, Madras, Cochin, Visakhapatnam. In the first two years of the Plan, there was severe congestion at the ports on account of large-scale imports of heavy Cargo. Several measures were taken up to increase the capacity at the Major Ports and to enable them to handle the increased traffic. The broad objectives of the Second Five Year Plan were to modernise and equip the docks and increase berthing capacities at Madras, Cochin and Visakhapatnam. Due to deteriorating draft conditions in the River Hoogly, special programmes were taken up at the Calcutta Port to provide extensive training works and dredging of the difficult bars. The progress in the Second Five-Year Plan, however, was far form satisfactory as may be seen from the port-wise allocation and actual expenditure. 45

9 Table 2.7 Investment at the major ports during Five Year Plans* Particulars First Second Third Fourth Fifth Sixth Seventh Eighth Plan Plan Plan Plan Plan Plan Plan Plan (Anticipated) Outlay (Rs. in Million) * "2958.0$ Expenditure (Rs. in $ Million) Capacity Generated (MT) Traffic Handled (MT) *(excludes those of annual plans in between) Source: Ministry of Surface Transport, GO I. Note: An expenditure of Rs million was incurred by Orissa government prior to taken over by central govt. has not been included. 2. $ Includes Rs million and Rs million under outlay and expenditure respectively for KIOCL project. 46

10 Apart from the completion of the projects which were carried forward from the earlier two Plans, the programmes for the Third Plan included the modernization and expansion of the docks at Bombay and a beginning on the construction of the Haldia Dock Complex (HDC) at Calcutta. Development of Mangalore and Tuticorin into all weather ports was also taken up in this plan. Also, in the third plan, development of Paradip, initiated by the Orissa State Government, was eventually taken over by the Centre and Paradip was declared as the eighth major port. This port was chiefly meant to provide export outlet to the vast ore reserves of the hinterland. During the three-year interval between the third and fourth plans, work on Madras Outer Harbour was started, Ballard Pier at Bombay was expanded, iron ore handling were improved at Visakhapatnam and a fertilizer berth was completed. The important projects undertaken during the three Annual Plans related to Haldia Dock Scheme and dock expansion, oil-cum-ore dock at Madras, construction of an open berth and execution of additional dredging to tackle siltation problem at Cochin Port, intensive dredging work at Paradip Port and the development of two new Major Ports of Mangalore and Tuticorin. Important schemes for completion in the fourth Five Year Plan were completion of Haldia Dock Project, development of Mangalore and Tuticorin ports as Major ports, dock modernisation scheme of Bombay and oil dock in Madras Outer Harbour. New important schemes were the installation of modern ore handling facilities at Mormugao and Madras, construction of an outer harbour at Visakhapatnam, construction of a satellite port of Bombay at Nhava Sheva and an oil terminal at Cochin. The Fifth Five Year Plan saw the fruitition of many projects underway for several years. Tuticorin was declared a major port in July 1974 and New Mangalore in January The other most important developments were the commissioning of the outer harbours at Madras and Visakhapatnam. Murmagao acquired a mechanical ore handling plant and Haldia Dock System (HDS) was put into operation for coal and ironore traffic in March At Cochin, the first phase of a programme for providing handling facilities for container traffic was completed and container ships started calling at the port 47

11 It was also during the Fifth Plan that, with the completion of the major spillover projects at Haldia, Madras, Vishakhapatnam, Mormugao and Mangalore during , the capacity for handling traffic in bulk commodities like iron-ore, coal and fertilizers was expected to be considerably augmented. A big push was given to port development in the Fourth and Fifth Five Year Plans. The expenditure of about Rs 2890 million incurred during the plan period was more than the total amount spent during the previous three plans and three annual plans taken together. The programme included completion of the Mangalore and Tuticorin harbour projects; Haldia to supplement facilities at Calcutta, construction of the outer harbours at Madras and Visakhapatnam, commissioning of the fifth berth at Kandla, development of iron-ore handling facilities at Murmagao, provision of an oil berth at Cochin and improvement of the ore handling plant as well as construction of a general cargo berth at Paradip. It was during the Fourth Plan that a Central Dredging Corporation (CDC) was set up. Table 2.8 Traffic, Capacity and Percentage of Capacity Utilisation of the major ports during various Plan Periods Plans Capacity in Million Traffic Utilisation(%) Tonnes First Five Year Plan Beginning End Second Five Year ~lan Third Five Year Plan Fourth Five Year Plan Fifth Five Year Plan Sixth Five Year Plan Seventh Five Year Plan Eighth Five Year Plan Source: IPA Report, New Delh1. 48

12 In the Fourth and Fifth Plans, increases were made in the ports' capacity for handling bulk cargo but still the ports did not have enough capacity to accommodate the sudden increase of import or export traffic. The 6th Plan took care of these imbalances. Priority was given to the development of container handling facilities to meet the growing needs of container traffic. Also, provision was made for acquisition of container handling equipment. Important schemes completed during the Sixth Plan included a POL (Petroleum and Oil products) berth at Cochin; container terminal at Madras, Tuticorin and New Mangalore; iron-ore handling facilities at New Mangalore and Paradip; Coal Jetty at Tuticorin; the general cargo berth and a new oil jetty at Kandla; a multi-purpose general cargo berth at Murmagao; second and third general cargo berths at Paradip; generalcum-bulk cargo berth at Visakhapatnam and a fertilizer berth at Cochin. The Working Group on Ports for the Sixth Five Year Plan ( ) observed that provision of port facilities should be ahead of the actual generation of traffic. The major schemes that were handled during the Seventh Plan were deepening of Bharathi Dock at Madras, additional POL facilities at Madras and Visakhapatnam and a fertilizer berth at Paradip with mechanical unloading facilities. Container handling facilities at Calcutta, Madras, Cochin were strengthened and additional cargo berths were set up at Haldia, Paradip, Tuticorin, New Mangalore and Kandla. The broad objectives for the development of the ports in the Seventh Plan were: development of infrastructure to match the type and size of vessels and types of cargo, planned modernisation of port facilities and use of updated technology; improvement in productivity of labour and so on. The concept of multi-modal transport was also developed in the Seventh Plan. Among the objectives of the Eighth Five Year Plan (1992-'97), the thrust areas for the port sector were as follows: modernisation of port facilities and use of up-dated technology so as to improve the efficiency of operations and reduce the handling cost; intensive utilisation of existing infrastructure through operational and managerial measures so as to optimise installed capacity utilisation. 49

13 expansion of facilities to handle atleast 50 percent of general cargo in container form; deepening of drafts at selected major ports; improvement in productivity of labour and equipment; improvement in financial viability of ports; alternative sources of funding for port development, and encouragement of private sector participation in selected port activities. The important projects included in the Eighth Five Year Plan were as follows: + Two petroleum product jetties, a container terminal, two general cargo berths and augmentation of fertiliser facilities were the various schemes under operation in Kandla. At Mumbai, replacement of Pir Pau POL jetty, replacement of submarine pipeline between Butcher Island and Pir Pau Jetty were the important projects handled. + At Jawaharlal Nehru Port, extension of container berth by 620 m with additional handling equipment were undertaken while at Murmagao, for iron-ore carriers of 170,000 DWT the entrance channel was deepened. In New Mangalore, a crude oil terminal and 3 general cargo berths were constructed while in Cochin, deepening of channel, a thermal coal berth, augmentation of fertilizer handling facility were the main activities during the 8th Five-Year Plan. Tuticorin had a second coal berth, Chennai (including the proposed Port at Ennore) witnessed deepening of channel for 170,000 DWT (Dead Weight Tonnage -a measurement to estimate the volume/ carrying capacity in a ship) iron-ore carriers, conversion of general cargo berths to handle containers, fertilizer facility, and. a coal and POL terminal at Ennore. + In Visakhapatnam, besides deepening of the channel, coking coal berth, bauxite berth and fertilizer berth were constructed. At Paradip, thermal coal loading facility and general cargo berths with deepening of channel for 170,000 DWT iron-ore carriers were undertaken. At Haldia, a container berth, petroleum product berth and one general cargo berth were constructed. + No project however was undertaken at Calcutta port. + Lastly, the new port sites that were enlisted in the Eighth Five-Year Plan were at: Hazira, Surat/Magdalla; Kakinada; Gopalpur. Additional facilities in Andaman and 50

14 Lakshadweep Harbour Works and ro-ro services between Jafrabad and Mumbai were the other tasks undertaken in this plan. The lists of possible projects for inclusion in the Ninth Five-Year Plan are as follows: + In Kandla, besides extension of container berth, a berth terminal for liquids other than POL would be constructed. + None of the major schemes would be undertaken at Bombay but at JNPT, container berth would be further extended. In Mormugao, a coal berth would be constructed along with a petroleum product berth. One general cargo berth, petroleum product berth and coal berth are enlisted for New Mangalore while no major project would be undertaken at Cochin Port. Tuticorin and Madras (including the proposed port at Ennore) would have container berths: at Ennore, proposals are there for additional projects including extension of coal terminal and POL terminal. While a thermal coal berth would be constructed for Visakhapatnam, Paradip would have augmentation of thermal coal handling facility besides one general cargo berth. As in the previous plan, for Calcutta again, there would be no major projects undertaken in the Nineth Plan, while at Haldia expansion of the container berth with petroleum products berth are in the pipeline 2.3 Hinterlands of Major Ports The concept of hinterland has undergone changes over time. Today, physical closeness to a port has become less important and the economic factor of total cost of transportation from origin to destination has over ridden physical. distance. With rapid development of industrial activity, overlapping hinterland is a common concept today. Hinterland piracy too occurs following economic principle of least cost. In simple terms, traffic goes to that port where the total cost borne by the users is minimum. Here, economic distance plays the key role, which may or may not be equal to physical distance. But, cargo traffic do follow certain norms, like bulk cargo is mostly captive (e.g. coal, iron ore, POL go to dedicated port terminals) while break bulk (general cargo) is highly susceptible to directional change in traffic flow. It must be however, 51

15 remembered that hinterland limits for any port is highly volatile and keep on changing over time in tune with the demand - supply matrix. It is therefore, never static or stationary. A description of the hinterlands for the respective ports 1s relevant in this context. It must be remembered that even today, nature of the hinterland determines, though in a limited way, the composition of cargo traffic passing through each port. Kandla - The port has a very vast hinterland and it has developed an extensive back-up area for port based industries. The hinterland comprises of Gujarat, Western Madhya Pradesh, Rajasthan, Western U. P and all other northern States like Punjab, Haryana, Himachal Pradesh and Jammu and Kashmir. The Kandla Free Trade Zone has been established on an area of 700 acres at a distance of 9 km. from the port, which is an added attraction for the port users. Jawahar/al Nehru Port Trust (JNPT) - This port enjoys an advantageous location on the principal sea-trade route from Europe and Middle East and the port is easily accessible by land and sea with the principal cities and ports of the country. The hinterland of the port is quite vast and is well linked to the port through rail as well as road network Mumbai - This port commands a vast hinterland comprising of Greater Mumbai, Maharashtra, Gujarat, Delhi, Uttar Pradesh, Punjab, Kamataka and Andhra Pradesh. Mormugao- is the main port for Goa and also serves part of Kamataka and Maharashtra. It is primarily an iron-ore port. The port is served by inland wa,terways system by rivers Mandovi and Zuari. More than 85 percent of the throughput consists of iron-ore exports alone. With Konkan Railway new industries are expected to be set up which would generate substantial cargo growth.the Goa Government, which has been discouraging the establishment of polluting industries in the region in order to protect tourism, is now allowing industrialisation to generate the much needed employment. Other important users ofthe port are : Zuari Agro Chemicals Ltd. - main producer of fertiliser in the hinterland and hence also the importer of fertilizer raw materials; Two main steel plants which need scrap imports of 50,000 tonnes annually; 52

16 Granite stone quarries from Bijapur ; Sugar factories in the hinterland from where sugar and molasses are exported. Goa Carbon Ltd. imports raw coke and exports calcinated petroleum coke through this port. ESSAR Steel Plant at Hazira where annually 2,50,000 tonnes of high grade ironore is expected from Bellary-Hospet mines. New Mangalore - The primary hinterland of the New Mangalore Port consists of the districts of Dakshina Kannada, Kodagu, Hassan, Chikmangalur, Shimoga on West Ghat. The hinterland of New Mangalore Port is endowed with immense natural resources such as iron-ore, manganese ore, chrome ore and other agricultural products like coffee, cashew nuts, forest produce etc. There is ample scope for exploitation of these resources for the promotion of imports and exports. The secondary hinterland covers the districts of Turnkur, Bangalore, Mandya and Mysore of Kamataka state and a part of Kerala and Andhra Pradesh. Cochin - This port enjoys a strategic location on the principal sea trade route from Europe/ Middle East to Australia and the Far East as well as from Africa to the Far East. The hinterland of Cochin covers the entire state of Kerala and part of Tamil Nadu and South Kamataka. There is convergence of all modes of transport namely road, rail, air and waterways in the port area. The hinterland of the port extends to about 600 kms. A quantum of 10 million tonnes of the traffic consisting of crude oil, POL and fertiliser raw materials which constitutes 87 percent of the total traffic comes from Ernakulam district. Tuticorin - The hinterland of the port c~vers the southern most part of the state of Tamil Nadu, enveloping an area of 44,000 sq. km. spread over the districts of Chidambaranar, Tirunelveli, Kanniyakumari, Rarnnathpuram, Pudukottai, Madurai and Trichy. The region abounds with agricultural and plantation produce. The port's hinterland hums with industrial activity. Port-based industries like Southern Petrochemical Industries Corporation, Tuticorin Fertilisers Ltd. are some of the industrial units served by the Tuticorin Port. Chennai - The Chennai port operating over hundred years has contributed to the industrial development of the city and adjoining hinterland, as was the case of Mumbai and Calcutta Ports. The hinterland covers the southern districts of Tamil Nadu such as 53

17 South Arcot, Tanjore, Thiruchirapally, Ambedkar districts, industrial areas of Coimbatore town and parts of southern Andhra Pradesh upto Vijaywada. The hinterland of Chennai port is highly industrialised. The immediate urban hinterland has refineries, chemical industries, thermal power plants and heavy industries. The container terminal backed by nearby Internal Container Depots (ICDs) serve the "volume addition" industries and the export/import of high value goods from Bangalore, Vijaywada, Hyderabad, Chennai and Coimbatore urban manufacturing industries. Visakhapatnam - The port essentially handles as bulk cargo and its hinterland is fairly large. It covers Bailadilla iron-ore mines in Madhya Pradesh as well as sources of thermal coal and alumina from Orissa. Coking coal is imported through this port to feed the Bhillai and Durgapur Steel plants. It covers practically the entire Andhra Pradesh, east Madhya Pradesh and southern Orissa. It is expected that several new ports in the vicinity such as Kakinada, Gangavaram and Gopalpur may come into operation in a few years which can shrink the hinterland of this port in respect of many cargoes. However, traditional cargoes of iron-ore, alumina, coal etc. are expected to continue to use this port. Paradip- Paradip is one of the major ports in India and is the main out-let and in-let of the sea borne trade of the eastern part of the country spread over states such as Orissa, Andhra Pradesh, U. P., Bihar and West Bengal. The natural resources and industrial products of this wide spread hinterland are immense. Calcutta and Haldia- The ports serve the entire eastern and north-eastern India and the neighbouring countries ofnepal and Bhutan. 2.4 Private Sector Participation Existing Private Sector Projects in the Major Ports: In Kandla one fertilizer berth has been leased out to IIFCO - for handling fertilizer raw materials; berth no. 6 leased for 7 years to "Gepee Corporation Ltd" - a Bangkok based company for servicing vessels owned/operated by them for handling dry bulk cargo. 54

18 In Mumbai there are two berths on a three years lease on tum basis In Nllava Slteva two berths and a container terminal with all equipment supply and maintenance has been handed over to private parties. In Mormugao two old berths have to be modernised and rejuvenated to handle coking coal so as to feed the steel plant. Ship repairing and floating dry dock alongside the berth and adequate space for the workshop are under consideration. In New Manga/ore one captive berth has been dedicated for KIOCL - which is fed by iron ore reserves from Kudremukh. The new oil berth is also a captive one. In Cocllin one berth for handling fertiliser raw material has been leased out to FACT who is in charge of installation and operation too. In Tuticorin two captive berths have been dedicated for TNEB - coal unloading plant. Near Cltennai is Ennore- the new captive port for Tamil Nadu Electricity Board on BOO basis -build, own and operate basis (own equipment) is the latest example. In addition, liquid-cargo berth terminal to handle chemicals and two captive berths for mechanical coal unloading required by the Tamil Nadu Electricity Board (TNEB) are other private sector projects. In Visakltapatnam two berths were leased out to Coromandel Fertilizers Ltd. for mechanical unloading of fertilizer and fertilizer raw materials and to National Aluminium Company (NALCO). In addition, wagon unloading system, storage silo, ship loaders with conveyor network are all given to private parties. In Paradip there is none till now. In Haldia One berth with back-up cargo storage space for imported coking coal (7 m tonnes) and limestone and for export of iron and steel machinery. The private party will operate with their own men and equipment on a ten years lease basis. Another berth equipped with mechanised unloading system comprising two cranes filled with grabs and conveyor network for unloading of coking coal-has been leased out to SAIL In Calcutta For the last 30 years, berth reservation on preferential turn basis was shared by Shipping Corporation Of India (SCI), Everett Steam Ship Co., and TISCO. 55

19 More recently, in Calcutta, two Dry docks had been leased out to Choghany. After 2 years, on termination of the lease, the party failed to pay all port dues. Future Projects for Private sector participation are enlisted in Table 2.9 Table 2.9 Indicative List of Port projects which may be offered for Private Sector Participation ( ) S.No. Name of the Project Indicative Cost (In US $ Million) 1. Liquid Cargo Berth at Jawaharlal Nehru Port (JNPT) Marine chemical terminal at JNPT Container freight station at Kandla port 5 4. Six berth terminal in Nhava Creek, JNPT Bulk handling terminal at New Mangalore Port Construction of new outer harbour at Tuticorin Port 1200 (Including modem container terminal) 7. Construction of new outer harbour at Madras Port Construction of outer to outer harbour at 800 Visakhapatnam Port (Part through private sector). 9. Construction of Multipurpose/General Cargo berths at 70 Visakhapatnam Port. 10. Container handling facilities at Tuticorin Port at berth 80 No Construction of modem container terminal at Cochin 800 Port. 12. Dry dock ship repair facilities at Paradip Upgradation of facilities for container berth at 35 Paradip. 14. Fertilisers captive handling system at Paradip 35 56

20 S.No. Name of the Project Indicative Cost (In US $ Million) 15. Construction of LPG and LNG terminal at 100 Puthuvypeen, Cochin Port. 16. Port facilities for expansion of refinery at New 35 Mangalore Port. 17. Construction ofberths west of Breakwater at 195 Mormugao. 18. Construction offrh Master Plan berths at 75. Mormugao. 19. Cargo handling facilities at Container Terminal at 40 Budge Budge, Calcutta Dock System. 20. Second Dock Arm at Haldia Construction of outer harbour at Mormugao 700 Source: IP A Report on Privatisation in Major Ports, IPA, New Delh Role of Intermediate and Minor Ports Indian coastline is dotted with eleven Major Ports and 181 Minor Ports including non-working ports (A list of these ports has been referred in the appendix). The Ports, which are not declared as major ports under Major Ports Act, are minor ports and are administered by respective State Governments. The only exception is the state of Gujarat. In the handling of sea-borne traffic, the intermediate and minor ports in fact play a complimentary role to the major ports The minor ports at present handle only about 10 percent of the total port's traffic. However, the traffic handled by minor ports has increased from MT in to MT in It is estimated that in about 34 MT traffic has been handled at all Minor Ports. It has been observed that the traffic at minor ports is increasing over time. 57

21 Table 2.10 Traffic at Minor Ports ( to ) Years Traffic (in Million Tonnes) P : Provisional E : Estimated Source: Basic Port Statistics, MOST, GOI. Quite a few of these ports handle overseas traffic of which the major items include foodgrain, fertiliser, etc., as import item while building material, oil cakes, ores and salt figure in the export list. Table 2.11 Minor Port Traffic (commodity-wise) Items Fertiliser and Raw materials Clinker Iron Ore Foodgrains Oil cakes Salt Coal * Others Total (* Dabhol and Cuddalore thermal power station are expected to be commissioned during 9th 5 yrs.plan periods. The coal requirements for this power station is estimated at 5.4 million tonnes from Talcher mines, loaded at Paradip port). Source: IPA Report, New Delhi,

22 Only a small number out of the 181 minor ports handle any traffic of significance. The main cargoes passing through the active minor ports are fertiliser import, iron ore and oil cake exports, coastal movement of clinker and occasional import of foodgrains. Very little local /rural produce is shipped from the immediate hinterland of any of these minor ports. 1 Table 2.12 State-Wise Cargo Traffic (Overseas/Coastal) at Minor/ Intermediate Ports- ( ) States Traffic ('000 tonnes) Gujarat Maharashtra 4244 Goa 395 Daman and Diu - Kama taka 524 Kerala 184 Tamil Nadu 34 Pondicherry 45 Andhra Pradesh 2227 Orissa 139 Sea Islands 295 Total Source: Basic Port Statistics, MOST, GOI. The minor ports spread over the Indian coastline have inherent advantages like: Ports as Regional Growth Centre : It is stated that intermediate and minor ports should be developed as an integral part of the overall port system in order to increase the port capacity in the country and to help in the acceleration of regional 'Ports and shipping sector study- India', Final Report, Volume I, Planning Commission, Government Of India, January, I 990. Executive Summary, ADB, 59

23 development. In the present situation when there is a gap between the traffic handled and the capacity available at various major ports, the development of minor ports is very important to fill the gap. 2 The fact that many of the existing minor ports are grossly under utilised without much prospect for further development in future, leads us to conclude that there is no casual link between minor ports and local development. A port is at best a vehicle for economic development but not an initiator. Therefore, investment in minor ports does not create or generate economic activity. Ports as generators of additional employment opportunities: Like traffic, employment also cannot be generated just by investing in a port. The extent of employment available will however depend upon how the cargo is handled. More men will be needed if the handling is conventional and fewer if mechanised and automated. Employment opportunities also depend on the rate of development of ancillary industries directly or indirectly related to a port. Ports as counter magnets to urban centres: Of the eleven major ports, only three- Calcutta, Mumbai and Chennai have very large urban centres with high population densities. For effectively reducing pressures on large urban centres, minor ports can serve as transfer points only if facilities of comparable level to those at the major ports are provided The greatest advantage of developing mmor ports is that these ports can be developed faster with minimum cost. For major ports huge capital investment is required and only a few big private corporations/financial institutions can undertake these projects whereas smaller ports can be developed by private enterprise. The development of minor ports also generates large employment with a relatively small capital investment, as the operations are labour intensive. The minor ports located along the coast are closer to the producing centres of the hinterland (point of origin of cargo) unlike major ports situated at long distances from the hinterland. Development of minor ports is most suited at present because our railway, road transport and Inland Water Transport (IWT) system is not M. Ganesan and Madhubala, 'Minor ports in India- Problems and prospects', Occasional Research Paper No. VI, GO I, Ministry Of Surface Transport, Transport Research Wing. 60

24 adequate to carry the goods and passenger traffic between the producing and shipping centres State-wise Plans for Development of Minor Ports Gujarat Gujarat, situated on the western coast of India is a principal maritime state endowed with favourable strategic port locations. It occupies nearly one-third of the coastal line of India. Apart from one major port, Kandla, there are 40 minor and intermediate ports located along the coastline of about 1600 kms. Out of these 40 ports, 11 are intermediate ports and 29 are minor ports. The minor and intermediate ports of Gujarat handle about 9 percent of total traffic handled by all major and minor ports and about 70 percent of the total cargo handled by all minor ports oflndia. During , the minor and intermediate ports of Guj arat State handled 19.7 MT of cargo. Traffic is increasing every year and has doubled within a span of five years. Gujarat has a vast hinterland and also the fast developing Northern and Central Indian States use the Gujarat ports for the transport of cargo. The States of Rajasthan, Madhya Pradesh, Western Uttar Pradesh, Delhi, Haryana, Punjab, Himachal Pradesh and Jammu and Kashmir are regular users for Gujarat ports. Therefore, any economic development taking place in these hinterland states have a direct bearing on these ports. Gujarat Maritime Board along with a private sector company have developed Pipavav port as a joint project at an estimated cost of Rs. 260 crore. This will be a direct berthing modern port in the Saurashtra region. Gujarat, situated on the western coast of India is a principal maritime state endowed with favourable strategic port locations. It occupies nearly one-third of the coastal line of India. Apart from one major port, Kandla, there are 40 minor and intermediate ports located along the coastline of about 1600 kms. Out of these 40 ports, 11 are intermediate ports and 29 are minor ports. The minor and intermediate ports of Gujarat handle about 9 percent of total traffic handled by all major and minor ports and about 70 percent of the total cargo handled by all minor ports of India. 61

25 During , the minor and intermediate ports of Gujarat State handled 19.7 MT of cargo. Traffic is increasing every year and has doubled within a span of five years. Gujarat has a vast hinterland and also the fast developing Northern and Central Indian States use the Gujarat ports for the transport of cargo. The States of Rajasthan, Madhya Pradesh, Western Uttar Pradesh, Delhi, Haryana, Punjab, Himachal Pradesh and Jammu and Kashmir are regular users for Gujarat ports. Therefore, any economic development taking place in these hinterland states have a direct bearing on these ports. Gujarat Maritime Board along with a private sector company have developed Pipavav port as a joint project at an estimated cost ofrs. 260 crore. This will be a direct berthing modern port in the Saurashtra region. Among the States, Gujarat has the largest coastline with the largest number of ports to serve the vast hinterland consisting of fast developing northern and central Indian states generating cargo. Gujarat is also the first maritime state in the country to have constituted Gujarat Maritime Board (GMB) to administer, control, manage and develop minor ports of Gujarat. It is also the first State which has developed a deep water port 'Pipavav' under joint venture partnership. As Gujarat was one of the first state to open its door to change and also with favourable strategic locations, at present it handles about 70 percent of the total cargo handled at all minor Ports of India. Next to Gujarat in terms of coast line length comes Tamil Nadu followed by Andhra Pradesh and Kerala. On the lines of Gujarat, Tamil Nadu Sate have set up a Maritime Board to mobilise private capital and propose to adopt the privatisation of the port sector for rapid development. Similarly State Government of Andhra Pradesh, Kerala and Karnataka have taken policy decisions to allow private sector participation for the development of minor ports. In Tamil Nadu four minor ports have been declared for the use of private companies. In Maharashra State also 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. These States have to learn from the experience of Gujarat State to generate more traffic. Keeping in mind the growth in terms of traffic every year, Gujarat Maritime Board has prepared a new port policy, which includes modernisation of existing ports 62

26 and development of new ports. The policy is an integrated approach covering port development, industrial development, power generation and other infrastructure development. It is expected that the port development of the State will coincide with industrialisation and both these activities would be synchronised, so that the port has assured cargo right from the beginning and industries have port facilities simultaneously. Salient features of the new port policy are as follows: To increase Gujarat's share in the domestic export and import sectors in National and International Trade and Commerce in pursuance of liberalisation and globalisation policy; To decongest the existing major ports on western India and to cater to the needs of increasing traffic of western and northern states by providing efficient facilities and services to support the country's domestic and international trade; To handle 100 MT of cargo in Gujarat maritime waters accounting approximately 25 percent oflndia's total cargo by 2000 AD; To provide port facilities to promote export oriented industries and port-based industries which are estimated to contribute 50 percent of total industrial investment ofgujarat; To take fullest advantage of the strategic location of Gujarat coast in the world maritime scenario, To encouraging shipbuilding, ship repamng and establishing manufacturing facilities for cranes, dredgers and other floating crafts can be initiated; By providing facilities for coastal shipping of passenger and cargo traffic between Kutch, Saurashtra and South Gujarat and further extension of these services to important places like Mumbai, Goa, etc. To fulfill future power requirement of Gujarat by establishing barge-mounted power plants by providing exclusive port facilities for importing different kinds of fuel meant for power generation; and To attract private sector investment in the existing minor and intermediate ports and at the new port locations. It is estimated that around 3 billion dollars would be 63

27 required to create new port facilities along with necessary infrastructure in the next five years. The future development in the Small/Intermediate port sector in Gujarat are: Incomplete works of Wharf/Jetty/Quay of GMB will be privatised. Private entrepreneurs will be permitted to install modern mechanical handling equipment on the Wharf/Jetty/Quay. Privatisation of the construction of new Wharves/Jetties in selected sites. Gujarat Maritime Board (GMB) has identified ten 'Green field' sites for development as deep water berthing ports. These sites have been identified keeping in view the availability of draft, general marine conditions, minimum pressure on the available infrastructure, proximity to the hinterland cargo and promotion of regional development concept. They are Dholera, Maroli, Vansi-Borsi, Alazira, Dahej, Mithiwirdi, Simar, Positra, Rozi (Bedi) and Mundra. Each site has been distinctly earmarked for specific commodities to facilitate the movement of cargo through existing infrastructure and also to ensure the financial viability of each project. Pre-feasibility reports for five ports (Maroli, Vansi-Borsi, Hazira, Mihivirdi, Simar/Chara) and detailed project reports for Mundra, Bedi and Positra have been prepared by National/International consultants of repute. Except for one or two locations the studies have been completed. Out of ten sites, four sites namely, Rozi (Bedi), Poistra, Dahej and Mundra will be developed by Gujarat Maritime Board (GMB) along with a consortium of state government, public sectors and/or consortium of private sector companies. GMB would undertake the construction of Wharf/Jetty/Quay and its maintenance. The superstructures like handling facilities and onshore facilities will be privatised by inviting tender bids. The remaining sites viz. Simar, Mithi Wirdi, Dholera, Hazira, Vansi-Borsi and Maroli are identified for exclusive investment by private sector. An investment to the tune of Rs. 15,000 crore is envisaged for the development of these ports. These ports will be privatised through a global tender bid. 64

28 Table 2.13 Ports to be developed by Gujarat Maritime Board Port Commodities for which the port is proposed to be developed Rozi (Bedi) Agriculture Commodities Poistra Container and Petroleum Products Dahej Industrial Goods Mundra Source: Mmor Ports In India- Problems and Prospects, OccasiOnal Research Paper No. VI, Research Wing, Ministry of Surface Transport, GO I. Table 2.14 Ports Identified for exclusive investment by Private Sector Name of the Port Commodities for which the port is proposed to be developed Simar Power Equipment Mithiwirdi Steel and Automobile Products Dholera General Cargo Hazira Industrial Goods Vansi-Borsi Petroleum and Liquid Chemical Products Maroli Industrial Goods Source: Mmor Ports In India- Problems and Prospects, Occasional Research Paper No. VI, Research Wing, Ministry of Surface Transport, GO I.. The development of ten new ports involves substantial investment, which has to be met from participation by interested entrepreneurs. Therefore, GMB has prepared BOOT (Build, Own, Operate and Transfer) package, which serves as the framework for the investment of the private sector in the construction and operation of these new ports. The Government, the private developer, the user and the lenders, form the basis ofthe 'BOOT' policy. 65

29 The Govt. of Gujarat has floated "Gujarat Port Infrastructure Development Company Ltd." with equity participation from Gujarat Maritime Board and Gujarat Industrial Investment Corporation to invest in new ports and other infrastructural facilities like roads and railways. Gujarat is the first maritime state planning ro-ro terminals for boosting coastal shipping. GMB intends to develop four identified (roro) terminal locations, namely, Dahej and Suvali (Surat) in South Gujarat and Gogh<!, Pipavav in Saurashtra to promote coastal shipping between Saurashtra, Kutch and South Gujarat. Privatisation of services like lighterage, dredging, piloting, tug, towing service and other essential utility services would be taken up in the selected existing and new minor ports. GMB will gradually withdraw in a phased manner from the dredging operations. GMB proposes to form Dredging Corporation of Gujarat to cater to the dredging needs of all the ports of Gujarat. As a port policy is an integrated approach covering port development, industrial development, power generation and infrastructure development, GMB acts as a coordinating agency in providing land, water, power, rail and road transport facilities and any other clearance to be obtained from Government of Gujarat and Government of India. A high level Committee headed by Chief Secretary monitors its implementation. Kera/a I:Cerala has 10 minor ports, and three intermediate ports. It also has a major port at Cochin. Out of these 13 minor and intermediate ports, cargo operations take place only in four ports. They are the ports of Vizhinjam, Neendakara, Beypore and Azhikkal. Vizhinjam handles about 1000 tonnes of cargo, Neendakara one lakh tonnes, Beypore 50,000 tonnes and Azhikkal about 5000 tonnes of cargo annually. These ports handled 184 thousand tonnes of cargo during The main commodities handled are ores, building material, foodgrain etc. Some of the initiatives taken by the State Government for Port Development are as follows: 66