PPP has proved to be a very good model....

Focus / Oct 15 2012

Established in 1989, Jawaharlal Nehru Port Trust (JNPT) handles around 60 percent of the country’s containerized cargo, crossing throughput and has become the Hub Port on the Western Coast of India.

"PPP has proved to be a very good model for building port infrastructure in India. However, sufﬁcient ﬂexibility in the PPP contract for customizing it to particular ports and types of operation is needed. New models, including PPP for dredging, are attempted to be created by JNPT for the second phase of dredging of our channel."

Luxman Radhakrishnan, Chairman, Jawaharlal Nehru Port Trust shares his views with Raja Iyer, Research Analyst on the port’s future projects, cargo handling details, strategies to counter competition and key issues in port sector. Edited Excerpts…

JNPT has planned a 3,000 acre logistics special economic zone (SEZ). Could you give us the detail of the project and its total cost?
The Special Economic Zone would have a total area of 2,700 acre of which around only 700 acre would be taken up as the ﬁrst phase for development. The estimates for this is pending approval of the EFC in the Ministry of Shipping, Govt. of India.

Could you please give us a list of other projects that the port proposes to carry out over the next ﬁve years and their total cost?
(A) 4th Container Terminal – Rs 8,500 crore.
(B) 330 M Berth Extension project – Rs 800 crore.
(C) Dredging of the approach channel to 14 m depth – Rs 1,500 crore.
(D) Dredging of the approach channel to 17 m depth – Rs 5,000-6,000 crore.
(E) Development of port infrastructure in Nhava vicinity – Rs 25,000-30,000 crore.
(F) Increasing liquid cargo handling capacity to 30 million tonne per annum – Approx Rs 1,500 crore.
(G) Construction of multipurpose berths and associated dredging – Rs 4,000 crore (rough cost)
(H) Logistics Park of 200 acre (cost not assessed)

The cargo handled by JNPT has increased only marginally to 65.75 mn t in 2011-12 from 64.31 mn t in the previous ﬁnancial year. What is your projection of cargo handling for 2012-13 and 2013-14?
It must be realized that JNPT is working at more than its designed capacity and under these circumstances only a marginal increase can be expected. The projected cargo handling in the current and the next year are however expected to be higher than that handled in 2011-12.

Ports in Gujarat like Mundra and Kandla are providing stiff competition to JNPT. What are the measures the port is taking to face competition from other ports?
JNPT is planning to enhance capacity considerably in order that as per the objective ﬁxed by the Maritime Agenda 2020, the current capacity will be quintupled (increase ﬁve times or more).

A contentious issue confronting major ports today is tariff regulation. The tariffs of major ports are deter- mined by TAMP and several terminal operators com- plain that the tariff set by the body leads to subop- timal outcomes. What is your view on this?
JNPT’s views on this have been conveyed to the Govt. of India. We have indicated that there is sufﬁcient compe- tition in the container sector, so that tariff regulation can be withdrawn and if necessary a body like the Competition Commission of India could be given jurisdiction.

Do you feel public private partnership (PPP) an ideal model for building port infrastructures like container terminals, docks, jetties etc? What are the pitfalls in Indian PPP model for ports?
PPP has proved to be a very good model for building port infrastructure in India. However, sufﬁcient ﬂexibility in the PPP contract for customizing it to particular ports and types of operation is needed. New models, including PPP for dredging, are attempted to be created by JNPT for the second phase of dredging of our channel. Review of the concession agreement by an overseeing body or regulator, preferably every ﬁve years for keeping it updated with the latest business and technological developments in the logistics industry is desirable.