A K Bhattacharya: Port of good hope

RAISINA HILL

Corporatisation is not necessarily the only answer to the problems that bedevil our ports.

Indian ports have been doing remarkably well in recent years, at least in terms of the volume of traffic handled by them. In 2005-06, they handled over 423 million tonnes of cargo, compared to 384 million tonnes in 2004-05 "" a rise of over 10 per cent. Their performance looks creditable not just when judged by the growth achieved last year, but even by comparing it with what was projected to be the Indian port sector's traffic-handling performance five years ago.

The Tenth Five-Year Plan had estimated that by the end of March 31, 2007, all the 12 major Indian ports would have carried 415 million tonnes of cargo, compared to 287 million tonnes handled by them by the end of the Ninth Five-Year Plan. So, the target that was set for the end of the Tenth Plan period has been exceeded a year in advance. The traffic growth in the first four years of the Tenth Plan was 47 per cent, while the projected growth for the entire Plan period was 44 per cent.

A closer look at the performance of the major ports will reveal a few more interesting trends. There are no surprises in the Mumbai port and the Jawaharlal Nehru port (JNPT) carrying 44 million tonnes and 37 million tonnes of cargo in 2005-06, way ahead of the 2006-07 target of 30 million tonnes and 34 million tonnes, respectively. Mumbai's spectacular growth was fuelled by the sharp rise in the petroleum products cargo and JNPT rode the boom on the strength of its container business, which accounted for a little more than half of the country's entire container business of 62 million tonnes. Similarly, the Chennai port, which saw the privatisation of one of its main terminals, handled 47 million tonnes of cargo last year, much more than the 40 million tonnes it was expected to achieve by 2006-07.

The surprise "" and a pleasant one at that "" actually came from the lesser known ports of Paradip, Mormugao and New Mangalore, all of which have already reached their Plan-end targets. No one has heard much about any major investment being made in upgrading their capacities in the last five years. Government planners were naturally very conservative about setting the Tenth Plan targets for these ports. But they have all been proved wrong. And the ports managed to record impressive performance with the help of more business arising out of strong economic growth and their ability to fine-tune existing policies and optimise the use of existing infrastructure to their advantage.

Even the much-maligned Kolkata port, including the Haldia dock complex, grew by 15 per cent in 2005-06 with the total cargo handled crossing 53 million tonnes. Its target for 2006-07 is 55 million tonnes. Similarly, the Vizag port handled 55.8 million tonnes of cargo last year and is only four million tonnes less than its Tenth Plan target.

There are some laggard ports as well. Cochin and Ennore actually lost traffic in 2005-06. Cochin fell, though very marginally, from 14 million tonnes in 2004-05 to 13.9 million tonnes in 2005-06. And Ennore's cargo handling declined from 9.48 million tonnes to 9.16 million tonnes in the same period. While Cochin could not exploit the advantages of a booming economy because it lost a big chunk of its share in the total petroleum products cargo, Ennore's performance decline was even more curious.

Ennore was the first port to be set up as a corporate entity, unlike all other major ports, which continue to function as trusts under a specific legislation. So, the sharp drop in Ennore's performance is even more worrisome, as the government now plans to bring in legislative changes to corporatise all the remaining major ports.

How is it that Ennore has done badly in spite of being corporatised, while other non-corporatised ports have done exceedingly well? One explanation is that even without being corporatised, the managements of the major ports like Kolkata, Vizag, Mumbai and JNPT focused on improving their efficiency levels, introduced flexible policies in tune with the changing market reality and used the public-private partnership model in many of their new projects. This yielded rich dividends in terms of higher productivity and better performance. So, the obvious lesson from the Indian ports story is that corporatisation is not necessarily the only answer to the problems that bedevil our ports. The ministry of surface transport will do well to keep this basic point in mind while charting the reforms agenda for the Indian ports sector in the coming years.