Cargo figures for few months cannot say Adani has overtaken JNPT: Sethi

We will revisit all the processes and facilities and the entire analysis will be done with a different lens hereon, said JNPT chairman

With three of the ports’ cranes damaged by rains and uncertainty in trade continuing to loom amid the Covid-19 outbreak, Sanjay Sethi, chairman of Jawaharlal Nehru Port Trust (JNPT), talks of the port’s readiness to improve risk mitigation at its facilities, while taking necessary steps to tackle stiff competition with Adani’s Mundra port terminal. Edited excerpts:

The recent storm damaged three cranes of JNPCT (Jawaharlal Nehru Port Container Terminal). How well equipped is the port in terms of insurance coverage? Is it not a failure on the port’s part that the issue could not be addressed for two whole days?

JNPT and its facilities are fully insured. However, what happened that day was not in the realm of risk mitigation. While the wind speed was not higher than that of Cyclone Nisarga, it somehow caused the destruction. Investigation is currently on and reports are awaited. At JNPT, we do not rely only on IMD for weather forecasts. We have three or four sources for weather forecasting.

Going ahead, how do you plan to assure such a scenario is not repeated? This time, JNPT was lucky that it did not have any vessel in operation when the crane damage struck the port.

At present, we are bothered more about dismantling the damaged cranes. Going ahead, we will look into the possibility of another risk mitigation exercise. We will revisit all the processes and facilities and the entire analysis will be done with a different lens hereon.

Adani’s Mundra port overtook JNPT container volumes in Apr-Jun quarter to become the largest container cargo port. How is JNPT planning to give stiff competition to Adani Ports?

Cargo figures for a few months cannot say that Adani has overtaken JNPT. While Adani’s Mundra terminal is definitely close in competition, we too are working in 3-4 areas to give it at tough fight. First is infrastructure, where JNPT, with the help of dry ports at Nashik, Wardha and Jalna, is looking to lower cost and dwell time. CFS (container freight station) charges at Mundra are much lower than that at JNPT since land prices near the latter are high, so all customs work will be done at dry ports which will save time and money. Apart from infrastructure, digitisation, reliability, simplification of processes, improvement in rail and road connectivity along with providing end-to-end solutions as part of technological enhancement that is also underway at JNPT port. We are tying up with agencies to help build a strong integrated logistics chain.

Due to the standard operating procedures (SOP) that have to be carried out at the port amid the Covid-19 outbreak, JNPT has witnessed increased costs at a time when cargo volumes are not where they used to be. How is JNPT handling the additional cost burden?

JNPT is a cash surplus port and the increased cost is not a burden for the port. We have a cash surplus of about Rs 4,000 crore. Also, since cargo volumes initially dropped by 30 per cent, related activities or associated costs such as travel, training, meetings among others to handle the cargo also declined, resulting in savings for the port. From JNPT's point of view, this cost increase is not substantial.

How is JNPT going to manage the cash flow, if the situation persists for longer than expected amid changing trade patterns?

We do not know going ahead if the picture is optimistic or pessimistic, but we have to consider a realistic picture. In July, our cargo volumes picked up. We are doing almost 80 percent (of last year) compared to the 30 per cent drop we witnessed in April. We are hopeful that in next few months we will pick up. Also, since our trade is annual contract majorly, there is no impact on realisations. A regulated port like JNPT has fixed windows and agreements with companies, and contracts are made in advance.