Even as the country has around 20 port projects with a total cost of Rs 10,348 crore under public-private-partnership (PPP) in various stages of development and operations, there is a need for regulation and vigilance on the service standards, according to a report by Deloitte and the Federation of Indian Export Organisation (FIEO).
A background paper released during FIEO’s National Conclave on Shipping 2012, held at Chennai this week, said, “In PPP projects, there is a need to increase vigilance to protect stakeholders against the monopoly abuse by the supplier, which could be via poor service, excessive charging etc.”
“Regulation is perhaps needed to ensure service standards are maintained, consumer services are timely, asset maintenance and replacement are on schedule and steps to protect the environment are being followed. Performance of service providers also has to be monitored and asymmetry of information must be reduced.”
At present, 20 projects with private sector participation either on a build operate and transfer (BOT) basis or on a captive use basis, are under consideration by the major ports. The projects, to come up with an estimated cost of Rs 10,348.29 crore, are expected to add around 171.45 million tonne to the existing capacity at the major ports.
The slow development of PPPs in the port projects are due to the bureaucratic delays and hesitancy, environmental clearance problems, local community opposition and overcrowding by small scale proximate port facilities.
The advantage of the model is that it helps increase in the pace of development of the project, quick decision-making, better operational and technological aspects, lesser legal hassles due to the involvement of the government.
The background paper, which discussed various opportunities and challenges faced by the shipping industry, said that there was a need to firm up the dredging plans to improve the draft-handling capacity in Indian ports.
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While the future-generation vessels would require drafts between 13 to 15.5 metre, due to the current draft restrictions, several Indian ports are unable to handle larger vessels typically with more than 9.5 m to 12.5 metre draft. This could make shipping lines to move to other ports. There is also a need to improve productivity through removal of constraints like inadequate infrastructure and absence of seamless connectivity with other modes, the paper added.
Meanwhile, the Indian ports have the opportunity in the growing trend – containerisation, transportation of cargo in containers with standardised handling equipment and without re-handling the contents. With the country expected to be a preferred destination for global manufacturing activities presents many opportunities for the ports to change their current operational style and be ready for the upcoming demand of handling and faster evacuation of containers, it said.