Mundra Port@25: Trailblazing entrepreneurship

How regulatory changes and entrepreneurial ambition transformed a once-sleepy fishing village into a global maritime giant

In the early 1990s, a well-established Gujarati businessman from Ahmedabad walked along the shores of a sleepy fishing village called Mundra. Small boats bobbed up and down in the tiny harbour as the languid waves of the Gulf of Kutch splattered onto swampy, salt-encrusted wastelands. These barren beaches were not worth a second look for a businessman pondering his future and fired with entrepreneurial energy. But what Gautam Adani saw was different. His inner eye visualised towering cranes and the biggest cargo ships of the world docked alongside.

Quick to seize an opportunity embedded in a liberalising Indian economy, the young businessman briskly set about implementing his vision to build a world-class port, overcoming numerous obstacles along the way.

Circa 2023, and Mundra Port is now 25 years old. It has developed rapidly over the years, emerging as one of the world’s largest ports with a capacity of over 260 million metric tonnes. It handled nearly 11 per cent of India’s maritime cargo in 2022-23, and is the gateway for 33 per cent of India’s container traffic. The port has contributed over Rs 2.25 trillion to the state and national exchequer, and created employment of more than 750 million man-days. Social initiatives under the Adani Foundation have touched the lives of millions living in the 61 villages surrounding Mundra.

While all this calls for a certain celebration of entrepreneurship, particularly in India’s notoriously fallible infrastructure sector, the issues to ponder over are the interplay of moves and initiatives that enabled this path-breaking achievement. The driving factors possibly lie in the concurrent impact of the nine strategies outlined below:

Seizing the regulatory opportunity: By mid-90s, the government had decided to open up India’s ports to private investment, thereby ending a long and frustrating period of state monopoly. Indian businessmen have been quick to take advantage of similar liberalisation moves in other sectors — electricity, telecom, airports, and banking, for instance. In 1998, Mundra Port received approval from the Gujarat Maritime Board to commence operations, thus securing its place in India’s economic history as the first private port.

Missionary zeal: It is often quipped in corporate circles that “Culture eats strategy for breakfast.” In the pioneering days, the management team is widely recognised to have worked with extraordinary commitment and passion, as exemplified in the leadership of Malay Mahadevia. Even to this day, the same frontier-spirit continues.

Bold positioning: The apprehension in the early years was whether Mundra could hold its own vis-à-vis the proximus Kandla Port— a successful government-owned port. It thus needed to come across with a bold and powerful presence, which it quickly achieved. International shipping lines were quick to latch on to this new deep draft, all-weather facility capable of handling the largest cargo vessels of the world. Its superior support infrastructure of tugs, dredgers, cranes and evacuation competencies added early to its image of committed operations.

Diversified cargo base: Unlike many of its eastern counterparts that rely on a few bulk items (like coal, iron-ore or petroleum) Mundra developed multi-cargo capabilities early on in this rather remote corner of India. Today, it boasts an array of facilities that can handle all kinds of bulk cargo (fertilisers, agri products, minerals, steel, and coal). It is capable of handling very large crude carriers, and its network of pipeline and storage facilities can take care of all types of liquid cargo, including vegetable oils and chemicals. It has established a Roro (roll-on, roll-off) facility for automobile exports, and all this while being the largest handler of container traffic in India.

Operational efficiency & superior service: Shipping lines, freight forwarders, and cargo agents talk about Mundra Port’s targeted marketing, bespoke pricing contracts, aggressive customer outreach, and strong networking with all players in the logistics chain. Its faster cargo evacuation and minimal turnaround times have been well documented. There is also the strong perception of smooth single-window service across different activities, such as piloting, berthage and bunkering — all recognised as markedly superior vis-à-vis competing ports.

The landlord model of growth: Students of infrastructure often allude to Mundra epitomising the “landlord model of development.”  This refers to an anchor investment (in this case the port) leading to concentric circles of subsequent infra investments. In Mundra’s case, this model has manifested itself in the surrounding developments of two of India’s largest coal-fired power plants, a special economic zone (SEZ), and an array of manufacturing, utilities and social infrastructure.

Partnerships: Since the early days, partnerships have played a key role, such as the joint operation of terminals with leading container movers like DP World and MSC, and the vast petroleum storage tanks with Indian Oil. Even the formation of the joint venture fast-moving consumer goods company — Adani Wilmar — enabled handling sizable shipments of edible oil.

Connectivity overdrive: Evacuation infrastructure through road and rail links were organised at a feverish pace. The National Highway Authority of India and the state roads department were persuaded into developing and widening road networks. In 2001, it privately commissioned its own Mundra-Adipur railway link, and, by 2002, this was integrated with Indian Railway operations. Mundra Port now has a private rail network of 117 km. Three cross-country pipelines link it to the northern hinterland.

Networked logistics support: As Mundra Port developed, the management took a visionary call in investing heavily in the supporting business of logistics management. Key components in this strategy included owning and operating container trains, general purpose wagon rakes, and a network of container freight stations and warehouses at key economic nodes of the country.

Adani Group is set to invest another Rs 4 trillion in the expansion of Mundra Port. New berths to handle copper ore and green hydrogen are on the drawing board. The hinterland areas are likely to see some major domestic and foreign investors set up huge manufacturing and service facilities. New-age initiatives for digitisation, automation and “greening” are underway.

The small fishing village of 25 years ago is set to emerge as India’s most happening coastal economic zone. Cheers to trailblazing entrepreneurship!

The author is an infrastructure expert and part-time advisor to the Adani Group Chairman Gautam Adani on strategic issues. He is also founder and managing trustee of The Infravision Foundation