Price and market trends: India port plans dogged by uncertainties; infra upgrade a must

15 March 2013 09:22  [Source: ICB]

Political indecision means that much-needed improvements to the country's overloaded ports are suffering delays

India is unlikely to see two new ports built at its eastern shores any time soon as a problem as basic as exact location has yet to be fixed for one of the projects, industry sources said on 6 March.

 New ports are needed in India to handle more, bigger traffic

Copyright: RexFeatures

The country's record of implementing port projects has been dismal, having completed only 82 or about 30% of the total 276 projects for capacity enhancement and modernisation programme it had set out to do seven years ago under the National Maritime Development Proram (NMDP).

India has 12 major ports: Mumbai, the Jawaharlal Nehru Port Trust (JNPT), Kolkata (with Haldia), Chennai, Cochin, New Mangalore, Marmagao, Ennore, Tuticorin, Kandla, Visakhapatanam and Paradip.

The Indian government has mapped out a $110bn (€85bn) investment plan to more than triple the country's port handling capacity to 3.2bn tonnes/year by 2020. India's current handling capacity is 1bn tonnes/year, of which 228.70m tonnes/year is for petroleum, oil and lubricants (POL), a source from India's Ministry of Shipping said.

The amount does not cover the required investment for the building of two new ports in northeast and southeast India.

India's finance minister P Chidambaram recently mentioned the government's plan to build new ports - one each in the provinces of Andhra Pradesh and West Bengal - emphasising the country's need to invest in new infrastructure as he presented the 2013-14 budget to the Parliament. No timeline was provided for the port projects.

India needs existing ports to be upgraded - [an] infrastructure upgrade. Now, it is inadequate," a shipping source said. "Ports need to handle bigger ships," he added.

In Andra Pradesh, three locations were shortlisted for the port project, namely Nakkapalli, Duggirajpatnam and Ramayapatnam- all of which are being contested by various government agencies, an official from the Indian Port Association (IPA) said.

This problem has been hounding the implementation of the project for more than two years now and is still unresolved, the source said.

The Indian Navy, which operates from Vishakhapatnam in the province, does not want commercial shipping activity in such close proximity to its operations.

Port operator Krishnapatnam Port, for its part, opposes the project as the proposed location will be in violation of the minimum 100-kilometre exclusive maritime zone for ports, the IPA official said.

Meanwhile, in West Bengal, the proposal to build a port on Sagar Island at the Bay of Bengal has been on the table for a decade on doubts about the feasibility of the project, as well as lack of funding, said an official from the Kolkata Port Trust (KoPT).

KoPT operates docks at the riverine port of Kolkata and at Haldia that are located 50 kilometres downstream the river Hooghly. Sagar Island was 50 kilometres further away from Haldia on the sea.

The port project in West Bengal with related infrastructure investment costing $1.4bn is now being proposed to be implemented through a public-private-participation (PPP) between a private port builder, the provincial government of West Bengal and the federal government.

India's government agencies would be allowed minor roles on these projects to promote higher private sector participation.

KoPT has issued a notice inviting expressions of interest for the project late last year that drew in 15 port builders. These are still being evaluated before an invitation for actual bids will be issued, the KoPT source said.

Author: Ajoy K Das

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