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Indicus Analytics: Harbouring inefficiencies

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Indicus Analytics

Though the performance of Indian ports has improved significantly, port capacity, connectivity and processes still lag global standards

More than 90 per cent of India’s foreign trade moves through the ports of the country and of the 35 states/Union Territories, 13 have coastlines. Under the Major Port Trusts Act 1963, the central government has over the years notified ports as Major Ports that carry the bulk of trade from the ports — as of now these are Kolkata, including Haldia in West Bengal, Paradip in Orissa, Visakhapatnam in Andhra Pradesh, Tuticorin, Ennore and Chennai in Tamil Nadu, Cochin in Kerala, New Mangalore Port Trust in Karnataka, Mormugao in Goa, Mumbai and Jawaharlal Nehru Port Trust (JNPT) in Maharashtra, Kandla in Gujarat and Port Blair in Andaman and Nicobar Islands. Notified as a major port in June 2010, Port Blair became the 13th major port in India. Of the remaining ports in the country, almost 200 are minor ports that are operated by state governments or specially constituted State Maritime Boards. The distribution of minor ports, according to the ministry of shipping, is as follows: Gujarat 40, Maharashtra 53, Goa 5, Daman and Diu 2, Karnataka 10, Kerala 13, Lakshadweep Islands 10, Tamil Nadu 15, Pondicherry 1, Andhra Pradesh 12, Orissa 2, West Bengal 1, Andaman and Nicobar Islands 23.(Click for table)

 

The traffic handled by major ports in India increased at a rate of 8.6 per cent per year over the period 2004-05 to 2009-10. According to the Economic Survey 2009-10, the average output per ship berth-day improved from 10,071 tonnes in 2007-08 to 10,473 tonnes in 2008-09; and the pre-berthing waiting time at major ports on port account decreased from 11.40 hours in 2007-08 to 9.55 hours in 2008-09.(Click for table)

However, there are still significant inter-port variations in pre-berthing waiting time. The southern ports of Ennore, New Mangalore and Chennai had the lowest pre-berthing waiting time of less than 1.5 hours in 2008-09, while Kandla and Haldia Dock had the highest at more than 20 hours. Another issue is that the average turnaround time of major Indian ports was 3.87 days in 2008-09, compared to 10 hours in Hong Kong. Clearly, a lot more needs to be done to improve the competitiveness of Indian ports. One constraint that has been flagged is the poor connectivity of ports to the hinterland leading to congestion and slow evacuation of cargo. All port trusts have now set up committees to coordinate with the National Highways Authority of India, railways and respective state governments to work on improving road-rail connectivity of ports.

The distinction between major and minor ports is not one of size, but of jurisdiction of the central and state governments. When it comes to minor ports, therefore, the development is guided by state port policies. The Gujarat government was the first state government to create a State Maritime Board in 1981, followed by Maharashtra and then Tamil Nadu. Gujarat has been found by the CATO Institute to have one of the best port development policies in Asia and is working to encourage investment by hinterland states in its ports.(Click for table)

There has been significant public-private partnerships (PPP) in port development; according to shipping ministry, private investments in PPP ports projects during 2009-10 stood at approximately $3.92 billion. A recent study by the Associated Chambers of Commerce and Industry of India (Assocham) on Indian ports has placed Gujarat, Maharashtra and Andhra Pradesh at the forefront for garnering private investment in ports.

Indian States Development Scorecard, a weekly feature by Indicus Analytics, focuses on the progress in India and across the states across various socio-economic parameters

sumita@indicus.net 

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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First Published: Nov 25 2010 | 12:42 AM IST

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