)
India's largest container port, Jawaharlal Nehru Port (JNP) in Navi Mumbai, is struggling these days with myriad challenges ranging from implementing its planned projects on time to improving connectivity to the problem of falling tariffs.
Established in 1989, JNP, managed by the Jawaharlal Nehru Port Trust (JNPT), handles around 60 per cent of the country's container cargo. It could handle more if some of its ambitious projects had taken off on time.
It has been 10 years since JNP saw the last project take off-what is now known as the Gateway Terminals-which added 1.8 million twenty foot equivalent units (TEUs) capacity. TEU is a measure of container cargo capacity. One TEU is equal to 20 feet.t.
Last year, JNP awarded a 330-metre terminal to Dubai Port World, the concession agreement for which is yet to be signed. The capacity addition of this project would be a meagre 0.8 million TEU for a port operating at over 130 per cent capacity utilisation at 4.1 million TEU.
A concession agreement is a document that sets out the terms and conditions of the contract.
The port's Rs 8,000-crore fourth container terminal has remained stuck and would be up for rebid in July. The port trust has lined up projects (since December 2010) worth Rs 50,000 crore till 2020.
Some of the projects in the pipeline include a Rs 28,000-crore mega container terminal with 10 million TEUs capacity, a 30 million tonne liquid cargo berth and a 2,500-acre special economic zone. Industry experts are sceptical about private sector interest at a time when trade has slowed down and loans are not coming easy.
"Fast implementation of projects is important. Currently, for every two ships, we are accepting one. Ships should not have to wait for berth, it should be the other way round. This can happen only when capacity is enhanced," said L Radhakrishnan, former chairman of JNPT.
The biggest challenge is not just timely implementation of projects, but also improving connectivity through water, road and rail. The dedicated freight corridor still remains a faraway dream and the road connectivity at the port remains abysmal, with serpentine queues of trucks, said one industry insider. "The problems of JNP would not be solved till it is corporatised and given the independence to take its own decisions," said a top company executive, who did not want to be named.
Overall trade in the country has come down and ports, including JNP, saw a six per cent drop in cargo handled during April 2013, compared with last year. But the container port still prides itself with the tag of "preferred port". The total container cargo handled at the port fell two per cent to 64 million TEUs during March 2013, primarily due to economic slowdown.
Another major blow has come from a ruling of the Tariff Authority of Major Ports, the sectoral regulator for service charges, that forced tariffs down by 44 per cent. Coupled with this, JNP has also been feeling the heat with a neighbouring non-major port, Mundra in Kutch, giving it stiff competition. Mundra, with a depth of up to 15.5 metres and ability to handle large ships like post Panamax and Capsize vessels, has become a viable option especially as JNP struggles with congestion problems.
The bright spot, however, is that the port has completed the first phase of its Rs 9,500-crore dredging project, achieving a depth of around 13 m. This has to be taken up to 17 m across a 30-km channel to enable large container ships to come to the port. "JNPT should get yields on its deepening project. The entire infrastructure should come earlier than the projects," said a senior analyst, who also preferred anonymity.
Container traffic globally has grown at around 10 per cent in the last 20 years. India's major ports have seen a doubling of container traffic in the past five years. With more containerisation taking place, ports have to take a long-term view and come up with corresponding capacity additions.
IN THE DOCK
* No project has taken off at JNPT since 2003
* Industry experts are sceptical about private sector interest due to slow down in trade and uneasy access to loans
* Biggest challenges are timely implementation of planned projects and improving connectivity
* Tariffs are down by 44 per cent after a TAMP ruling
