India’s response to containerisation has been seemingly very gradual. The reasons are not far to find. On the one hand, the government controlled Major ports (under the Union List – Schedule VII of the Constitution of India), so used to handling traditional cargoes, were not too enthusiastic, mainly for want of additional investment in infrastructure that was required to handle containers, and on the other hand, Indian shipping companies which were then operating under the licensing scheme of the Indian government, were happy to remain engaged in tramp operations, acquiring only dry bulkers and tankers. It was only in 1993 that India’s first cellular container ship of 1757 TEU was delivered. For the next 10 years, India had just 3 container ships of this size. The remainder were less than 500 TEU-capacity. When international shipping companies acquired 15000+ TEU vessels, India’s only fully-fledged liner company, the government owned Shipping Corporation of India, just crossed the 4000 TEU acquisition mark. It is therefore not surprising that in the overall Indian cargo movement the share of containerised cargo is still less than 25%.
Notwithstanding the above, it is noteworthy that India has been continuingly witnessing a CAGR of 12 to 15 percent in container handling for the past few years. This can be attributed to the overall growth in traffic (organic growth), thanks to the booming GDP of the country and perhaps to the fact that more and more cargo are getting containerised (inorganic growth). India’s container throughput in 2010-11 was slightly over 9.4 million TEU (a miniscule number, of course, if compared with the 186 million TEU handled by China), out of which 7.5 million TEU were handled by the Major ports and the rest by the non-Major (under the Concurrent List of the Constitution of India – Schedule VII and governed by the maritime States). Amongst the Major ports, the Jawaharlal Nehru Port on the west coast of India has been the star performer, albeit along with its “private partners”- the two terminals run by DP World and CONCOR/APM. In fact, almost 50% of India’s container throughput is handled by JN Port alone. In 2010-011, JNP totally handled 4.27 million TEU, (its own terminal, JNPCT, handled 0.88 million TEU, GTICT handled 1.85 million TEU and NSICT 1.54 million TEU). To compare JNP’s performance in the international context, JNP started appearing in the list of world’s top container ports since 2005 when it was ranked 30th. In 2010 it has been ranked 25th (actually slipped 1 position from 2009). Interestingly JNP’s often quoted competitor, the Colombo Port, is fast catching it up and during 2010, by handling 4.12 million TEU secured the 28th position. However, JN Port still has a very long way to go if ever it hopes to catch up with the world’s ‘leaders’…the ports of Singapore/Shanghai which are racing towards the 30 million TEU mark (annually). The next top container Major port of India has been the Chennai Port. Together with its private terminal operators (DP World and PSA), it handled 1.5 million TEU in 2010-11. No other Major port crossed even the half million TEU mark. As far as the private (non-Major) ports are concerned, Mundra Port (AMCT and MICT) and GPPL have handled most of the boxes. All in all, 3 Indian ports viz. JNP, Chennai and Mundra have crossed the one million+ TEU mark in 2010. One of reasons that have been touted as to why Indian container ports cannot achieve the iconic status of Singapore/Hong Kong/Shanghai is because of the geographical location of the Indian peninsula. Experts opine that none of the Indian ports, except perhaps Cochin (on the west coast) and Tuticorin (now named as the VOC Port on the east coast) lie close to the east-west international traffic route. As a result Indian ports, lying on the north-south axis, are destined to remain as feeder ports with trans-shipment happening at the neighbouring hub ports of Colombo/Salalah/Jebel Ali/ Port Klang. However, the newly established private ports like Mundra and DP World’s ICTT at Vallarpadam disagree with such a view. The recent calls of 6000+ TEU mother vessels at these terminals do back their claims that Indian ports do have the potential of becoming “big daddies”. Even the statistics of the Major Ports’ Association (IPA) state that almost 70% of the boxes handled at the ports are now “direct destination”. Only 25% are trans-shipped, the rest 5% being coastal / domestic. But it remains to be seen if the “Emma Maersk”s of the world (or the Triple-E series) decide to call upon Indian ports even in the near future. At this point of time, however, poor draughts have become the bane of the Major ports, which is preventing Capesize+ vessel calls thereby denying economies of scale to the Indian trade. Immediate dredging has become the crying need for some of the important ports like JNP, Kolkata, Visakhapatnam and Cochin. JN Port’s ambitious programme of deepening the channel and alongside the berths to 14 meters has in fact got delayed for almost 4 years. The other fallout of the heavy dredging requirement is the high vessel related charges of Indian ports, which the port authorities are compelled to load on to, in absence of any financial support from the government for dredging activity. Maersk officials have claimed that in view of the steep charges (almost 3 to 4 times more than that charged by the other ports of the region), bringing larger, higher tonnage vessels to Indian ports becomes a costly proposition. Looking at the past growth of container traffic in India, trade pundits anticipate the box handling to double up in the next one decade, i.e. to 20 million TEU by 2020. Are Indian ports gearing up to this increase? Presently, the all-India container port capacity, at approximately 10 million TEU, just about matches the current throughput. The situation at JN Port, though, is different. The Port is operating much beyond its rated capacity of 4 million TEU. The Ministry of Shipping, in its Maritime Agenda 2010-20 released early this year, has laid out an ambitious total port capacity expansion programme of trebling it from the current 1 billion tonne capacity in the next 10 years. Much of the expansion is expected by way of private participation through the BOT model.
Some of container projects that are on the anvil are –
The Offshore Container Terminal (OCT) of Mumbai Port, being developed under the PPP model by BOT operator, the Gammon group in collaboration with Dragados SPL of Spain. Started in 2007, this project has been delayed considerably.
JNPT’s 4th terminal, which has been just awarded to the PSA-ABG consortium. The Rs. 7000 crore terminal is expected to be operational by 2014. Meanwhile JNPT has recently invited proposals for developing the 5th container terminal to take up its total capacity to over 10 million TEU.
Bay of Bengal Gateway Terminal at Ennore port being constructed by a consortium led by Eredene Capital and expected to be operational by 2013.
Chennai Mega Container Terminal which failed to attract bids in January this year but is hoping to get completed by 2018 to handle 4 million TEU.
L&T’s Kattupalli Container Terminal to be operated by Philippines based ICTSI, the opening for which is slated for this year end.
Krishnapatnam Port’s container terminal for which it has just signed an agreement with Container Corp of India (Concor), under the Ministry of Railways.
Marg Group’s Karaikal port container terminal again alongwith Concor.
New Mangalore Port’s Rs. 276 crore greenfield box terminal which after the aborted bids is being developed by the port itself.
Kolkata Port’s Diamond Harbour container terminal for which the tender has just opened. Meanwhile there is no further news on the Kulpi Container Port in West Bengal being developed by DP World.
However, all the above development pertains to the sea-side capacity. The land-side constraints remain, as if forever. Only 15 % of the roads are highways and only 0.5 %
of the roads are two or four-lane. The road infrastructure within and at the outskirts of most of the port cities is inadequate for freight movement. Container traffic movement to and from the CFSs and Ports is adversely affected due to the poor roads. Lack of common user ICDs / DCTs to support train operations hampers evacuation of boxes from the ports. The capacity of the rail link feeding into the JNP terminals is 24-26 container trains per day whereas the demand is much higher. While there is an urgent need for more dedicated freight corridors (DFCs) the current two DFCs planned are running much behind schedule. The whole situation on the land-side can be summed in the words of Marc Levinson, economist and author of “The Box”, who has said that while 18000 TEU vessels will indeed bring efficiency and economies but will also contribute to delays and confusion on land, making total shipping times longer rather than reducing it.