Indian ports, shipping suffer from woeful inadequacies

K R Sudhaman

With global trade from India now surging towards $1 trillion (exports and imports), port and shipping too have been growing rapidly in the country in the last decade or so. But port development has been vastly inadequate and none of the Indian ports figures in the top 20 in the world.
Indian ports have been short on performance parameters against international ports, observed a recent parliamentary Standing Committee report, which was critical of low productivity of ports, high vessel turnaround time and low draft, preventing large cape class vessels from operating through Indian ports. These are issues that needed to be addressed through massive investment to ensure Indian ports became world class.
The irony is that most ports operate much below capacity and yet there is traffic congestion in every port, which is difficult to explain. One reason could be infrastructure bottlenecks like road and rail connectivity, delay in customs and security clearances. There are also tariff related uncertainties due to multiplicity of regimes.
According to Trinamool Congress leader, Derek O’brien, who is chairman of parliamentary Standing Committee on transport, tourism and culture, low productivity and high vessel turnaround time at Indian ports are due to low level of mechanization and insufficient draft. Skewed handling capacity for different types of cargo and infrastructure constraints in hinterland connectivity too contributed to inefficiency. The committee submitted its report to Parliament during the just concluded winter session.
Benchmarking Indian ports against Chinese and US ports shows that India lags behind significantly in port infrastructure. Seven of the top ten ports in the world today are Chinese, while no Indian port figures in the top 20. Most of the Indian ports do not have the draft to handle cape size vessels. The average size of a container vessel calling at Indian ports is around 5000 TEUs, while in China it is around 12,000 TEUs. Large cape size vessels carry up to 15,000 TEUs. At JNPT, India’s biggest container port, draft by volume is 14 meters while a cape size vessel requires 18 m draft. Around 25 per cent of India’s container cargo is transshipped at Colombo or Singapore due to lack of infrastructure to handle large cape size container ships. Average turnaround time at Indian ports is much higher at 4.5 days as compared to just one day in Chinese ports and just a few hours in Singapore.
The parliamentary committee, therefore, strongly recommended that India develop cape handling capability at its key ports as global shipping industry is fast moving towards cape size vessels. Considering the strategic location of India’s major ports and their importance to trade, there is now an opportunity to improve their performance to meet global benchmarks. India should not miss out on this opportunity, the committee felt.
Though average turnaround time in Indian ports still needed to improve substantially, the committee observed there has been significant improvement in the past one and a half decades for all the major ports. Average turnaround time for major ports improved from 8.10 days in 1990-91 to 3.63 days in 2005-06. It slipped to 5.29 days by 2011-12 but declined to 3.43 days by 2016-17. The turnaround time varied between 1.9 days at Cochin port and 4.99 days at Paradip. Chennai, JNPT, Ennore and Mangalore ports apart from Cochin had less than 2.7 days turnaround time.
Implementation of RFID system will eliminate manual checking at port gates thereby minimizing congestion. This will facilitate real time tracking of movement of vehicles, personnel and materials. This will reduce congestion and also cost of operations at ports. JNPT, Cochin, Ennore and Mormugoa have already made the system operational and other ports are in the process of implementing the RFID system.
Three transshipment container ports at Colalchel in Tamil Nadu, Vizhinjam near Thiruvananathapuram and another at Vallarpadam near Cochin are being set up within the radius of about 130 nautical miles. Vizhinjam is endowed with a natural seawater depth of 20 m and hence can attract the largest container vessels in world. These large ports are being set up to cut dependence on neighbouring hub ports for transshipment like Colombo, Singapore, Salalah and Jebel Ali in Dubai, Tanjung Pelepas and Port Klang in Malaysia.
The committee, however, felt that three ports coming up within a distance of 130 nautical miles need to be developed and strategized so that all the three receive sufficient cargo to ensure profitable operations. There is need to increase containerization, but this must be accompanied by increasing capacity of terminals from 14 million at present to 30-40 million. JNPT has not undertaken any capacity addition project in the past 6-7 years.
Total containerized cargo volume for the whole of India’s major ports was estimated at close 8.5 million TEUs. India had just two ports which handled cargo beyond 100 million tones – Kandla and Mundra. Indian ports record the higher rate of empty containers shipped out. This reflects three main factors that characterize the Indian shipping industry – high volume of unprocessed exports, which do not require containerization; low volume of manufacture exports; and its heavy dependence on manufactured imports. This reflects fundamental trade imbalance.
Recent changes in the policy have helped to develop cruise tourism. Now five major ports -- Mumbai, Mormugao, New Mangalore, Cochin and Chennai have taken steps to develop ultra modern cruise terminals. The committee, however, felt that taxation policies in this regard must be formulated in a manner to facilitate cruise tourism in the country. Charging cruise ships on the basis of their tonnage rather than on the number of passengers was a dampener. This needed to be changed. All city-based ports should have cruise terminals to attract foreign licences and promote cruise tourism. (IPA)

Sunday, 20 January, 2019