eGov Ports Summit Special Issue

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PORTS SUMMIT SPECIAL ISSUE / SEPTEMBER 2015

Port-led Development

A Tide of Opportunities

11 September 2015, Hotel Trident, Nariman Point, Mumbai

SECOND GRID PORTS SUMMIT SPECIAL ISSUE / SEPTEMBER 2015

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September 2015 / Ports Summit Special Issue

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BFSI

EDITORIAL

Message I am indeed delighted to know that the Maharashtra Maritime Board, Government of Maharashtra, is organising the ‘India Ports Summit 2015’ on 11th September, 2015 in Mumbai.

India’s large coastline and rivers present a large potential for improving the logistics efficiency, thereby supporting the growth of manufacturing in the country.

I am committed to provide the regulatory environment needed to help achieve this objective. All-out efforts are being made to facilitate investment in the sector and improve the ease of business. The Sagarmala Project aims to achieve all-round progress by focussing on ports.

At the same time, there is a lot to be done by the private sector. Together we can realise the potential of water transport to create and support economic growth, leading to employment.

I wish the Summit all success.

(Nitin Gadkari)

27th August 2015

Message I am glad to know that ‘India Ports Summit 2015’ hosted by Maharashtra Maritime Board, Government of Maharashtra, and organised by Elets Technomedia Pvt Ltd is being held on 11th September, 2015 in Mumbai.

There is a tremendous potential of growth of ports and adjoining cities in India. I hope this Summit will serve as a platform for sharing knowledge in various areas of port-led development, technologies and new trends in smart and green ports.

I extend my best wishes for the success of the Summit and welcome all the practitioners of port development from all over the country, who will gather in Mumbai for this vibrant conference.

(Devendra Fadnavis)

COVER STORY

INDIAN PORTS

Port-led Development A Tide of Opportunities

T

India, known for oceanborne trade since time immemorial, had lost focus on the business and bilateral trade potential that the maritime sector has mainly due to procedural delays and policy paralysis. Dotted with 13 major ports and about 200 non-major ports, the maritime sector is in revival mode, thanks to initiatives like the proposed Sagarmala project, write Jessy Iype and Prathiba Raju of Elets News Network (ENN)

he Indian port sector is looking up. Developments are taking along the shore. The Shipping Ministry´s ambitious plan of Maritime Agenda 2020 focuses on regaining the lost lustre of the maritime sector. Waterways transport, which carries nearly 95 per cent of India’s trade by volume and 70 per cent by value, will showcase 1,758 MMT cargo traffic by 2017. It is expected to handle two billion tonnes of cargo by 2016-17 and 2.4 billion tonnes by 2019-20.

B N Satpathy, Senior Consultant, NITI Aayog, sharing his views on port-led development strategy told ENN: “Port-led development is meant to serve as means of transport networks, which are extremely important for handling goods and services efficiently with minimum costs. Ports serve as a transport network globally, which will add to the economic growth of the The Union Minister for Road Transport, Highways and Shipping, Nitin Gadkari, dedicates to the nation country.” the buoy tender vessel ‘Indira Point’ built by the Cochin Shipyard Limited for ‘the Directorate General, Lighthouses and Lightships, in Cochin “Port-led development strategy is an importexport led strategy and for the first time we are trying to look at coastal states as a homoge-

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Ports Summit Special Issue / September 2015

INDIAN PORTS

B N Satpathy, Senior Consultant, NITI Aayog: Portled development is meant to serve as a means of transport networks, which are extremely important for handling goods and services efficiently at minimum costs neous category. Earlier, the focus was on ‘special category states’ or ‘hilly states’ in the planned

document, but it is a different scenario now. The port-led development, which was neglected, is gaining momentum. Nine coastal states have a significant contribution to the country’s economic growth,” Satpathy added.

Anchoring hopes on Sagarmala

COVER STORY

port linkages, under performance of existing port infrastructure and lack of developed infrastructure near ports, for value addition of inbound or outbound merchandise. The project also aims to improve the share of merchandise trade in GDP for India, which is currently at 42 per cent, while it is stands at 75 per cent in Germany and for the European Union it is 70 per cent.

“The project will undertake redevelopment of existing port infrastructure through

The Union Minister of Road Transport, Highways & Shipping, Nitin Gadkari, had informed a recent meeting of consultative committee of the MPs that the ambitious Sagarmala Project would focus on direct and indirect port-led development, while also proNitin Gadkari, Minister viding infrastructure for transporting goods to and from ports efficiently and of Road Transport, cost-effectively.

Highways and Shipping: The project is trying to augment The ambitious Sagarmala 3,130 million tonnes of cargo handling by 2019-20. The Sagarmala project is Project would focus on trying to enhance the port-led developthe direct and in-direct ment in India, which suffers from poor

port-led development, while providing infrastructure for transporting goods to and from ports efficiently and cost-effectively

September 2015 / Ports Summit Special Issue

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COVER STORY

INDIAN PORTS

upgrade in port handling equipment and extensive use of IT in improving monitoring and operations of port activity. The Jawaharlal Nehru Port Trust (JNPT), which is one of the 12 major ports in India, will receive Rs 4,000 crore to develop its SEZ. The project will identify suitable port locations with deep drafts to enhance shipping and port handling capacity. Specialised ports with focus on handling coal, energy, chemicals, commodities, etc., will be developed,” a government official informed ENN. TTS Phyade, Port Officer, Honnavar, Karnataka, said: “The Sagarmala Project will definitely have a positive impact on the port sector; it will have a direct impact on the economy as huge bulk cargos and commodities can be transported via waterways, as it is cheaper than the road and rail network. The Railways’ major revenue is via cargo handling; similarly ports should also focus on bulk cargo transport.

Right now, many major ports are struggling to cope with the time factor on hinterland cargo transport time.”

Holistic maritime transit Although there is immense potential in the port sector, there is a lack of provision to enhance the basic infrastructure management, apart from the trade relations with the private players and the countries abroad. What is imperative for the government is to gain a paradigm shift in handling the maritime

S V Madabhavi, Chief Engineer, Chennai Port Trust and General Manager (Projects), of Sethusamudaram Corporation Ltd: Movement of cargos is crucial for portled development, and for this, the infrastructure of ports needs to be upgraded 8

Ports Summit Special Issue / September 2015

industry and realise its potential to boost the economic growth of the country, feel most of the country’s port officers.

Talking about the Karnataka ports’ present status, Phyade, told ENN: “As for Karnataka, we have only one major New Mangalore Port, which is 320-km-long, and has 12 minor ports.

Out of which, the major port alone handles cargo, so revenue-wise, the volume of traffic is very less and is about 600 million tonne. The minor ports are used only for fishing, as the water depth level is low. In order to boost trade, the infrastructure of the ports, including the minor ones, needs to be developed.”

Suggesting that the ports should be states specific, he said: “The state government wants to develop the port either via PPP or they try to go for the Gujarat model. As far as the port administration policy is concerned, the Gujarat model can be followed, but to develop Gujarat-type ports is not possible as the terrain of each state differs. Gujarat has mud flats, which is not habituated by people, but in Karnataka people live dangerously close to the port.”

Stressing on infrastructure upgradation of ports, S V Madabhavi, Chief Engineer, Chennai Port Trust and General Manager (Projects), Sethusamudaram Corporation Ltd, said: “Movement of cargos are crucial for

port-led development and for this, the infrastructure of ports needs to be upgraded.

More transshipments of cargos and usage of waterways for ship boilers are the focus for the upcoming projects from our side for the existing and upcoming ports.”

Talking about the skills required for the management, Madabhavi informed that lots of manpower is available and there is no dearth of opportunities in the port sector. “We have modern equipment. The Indian Maritime University in Chennai is already starting learning programmes that are port and marine-related,” he informed.

Numerous services Some officers feel ports have varied and diverse roles to offer. Premchand Solanki, Port Officer, Daman and Diu, told ENN: “With regards to growth of the port in Daman and Diu, we plan to introduce more services, which would attract tourists. We are going to start catamarine services for studying these. We have submitted the project details to the Shipping Corporation of India

INDIAN PORTS

COVER STORY

Atulya Misra, former Chennai Port officer: The Chennai Port has no manufacturing activities, while it has a huge scope. Most of the drydocks come from abroad…we are the buyers and not the source Premchand Solanki, Port Officer, Daman and Diu: We are going to start catamarine services for tourists. We have submitted the project details to the Shipping Corporation of India (SCI) on implementing this thought soon (SCI) on implementing this thought soon.

The challenges faced are that the coastline doesn’t have the suitable water depth. The channel requires dredging due to which currently we are not inviting any vessel, cargo or passenger ship to the port.”

Besides, with every sector going digital in the country, ports couldn’t be left out, too. “Recently, the whole cargo container handling has been computerised, and the person handling it has been give a user name and password, so that he could login at his will and find the location of the shipment. It becomes easy for the Customs officials and lots of time is saved. The road traffic burden will be lessened due to the project as more and more people would tend to use the waterways for transport,” said Phyade.

Madabhavi, on the potential of waterways of India, said, “The waterways connect the western and eastern peninsula of the Indian subcontinent. The Indian waterways and inlands have the benefit of having the own territory that can be used for commercial and defence purposes. The purpose was fruitful and helped ports in coastal movements within the territory in cargo movements coming from nearby smaller countries. But, this stopped with a Supreme Courts order.

Studies carried out in 2009-11 have proved how beneficial the Sethusamudaram Corpn Ltd has been. We are not sure if the government is keen on us or not.”

Connecting the dots The ports of the country lack connectivity and it is imperative to focus on the inter-land connectivity through rail, air and road, just as other sectors have provisions to transport the necessary cargo to various destinations. This can help increase the potential to explore and expand trade and boost business in the maritime sector.

Atulya Misra, former Chennai Port officer, said, “We have 1.1 million of the capacity, out of which only 70 per cent utilised. The country can deal with much more challenge, like inter-land connectivity of ports, which can grow in and out. The challenge is not to include

other infrastructure that can ease out ports’ inter-land connectivity that is via railways, and national and state highways.

The Chennai Port has no manufacturing activities, while it has a huge scope. Most of the drydocks come from abroad…we are the buyers and not the source.”

Informing that the current status of the ports is changing with the Make in India initiative, Misra said that the inland system is crucial in terms of export-import. “The inland waterways has certainly increased the interland transportation capacity. Now that 90 per cent of the cargo would move via the sea route, the ports have to be geared up as we have the capacity and potential for a robust port-led development.”

Ports on the go Long-term tax structure to attract investors, incentives for various maritime players to invest in Research and Development and concessions for equipment purchases for the manufacturing sector are the key factors to boost the port-led development. “India has a lot of potential for transportation of material through waterways within the country. The port industry will see a huge productivity and help in boosting the GDP growth,” Misra added.

September 2015 / Ports Summit Special Issue

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PORT SECTOR

NEERAJ BANSAL

Sagarmala to be the Game Changer

With the announcement of Sagarmala Project, the port sector is expected to get a boost and will be a game changer for the Jawaharlal Nehru Port Trust (JNPT). Neeraj Bansal, Deputy Chairman of the Trust, chalks out the plans and methods that are being used or will be used in the long run to strengthen the ports sector

T

he Government of India has embarked on an ambitious plan to set up the Sagarmala Project.

What is your vision for the same?

The Sagarmala Project announced by the Shipping Ministry is a new hope for the country’s ports and port infrastructure sector. The project is aimed at port-led development along the 7,500km coastline of India and development of Regional Economic Clusters. For long, the growth of India’s maritime sector has been hampered by many procedural and policyrelated challenges, the most important among them being the presence of a dual institutional

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Ports Summit Special Issue / September 2015

structure that has led to the development of major ports governed by the Union Government and non-major ports coming under the state governments’ ambit.

A key element of this Project is setting up of 10 Coastal Economic Regions (CERs). It will play an important role in realising the vision of ‘Make in India’ programme, as each CER will hold an integrated and comprehensive plan of the area, combining the growth potential of various industrial clusters and economic activities with the upgradation and development of both in major and non-major ports simultaneously.

The key components the project would be modernising port infrastructure, transforming the existing ports into world-class ports,

development of new ports, and improving hinterland linkages through efficient rail, road and water networks for efficient evacuations.

How do you think the role of IT can be enabled in the overall development of the ports sector?

IT plays a crucial role in overall development of the port sector. JN Port is one of the youngest major ports in the country, having four container terminals and one liquid terminal facilitating the best IT support to its customers. It has also brought transparency in the customer services.

JN port has undertaken a project ‘Software Development, Integration and Upgrade of Port Operations’. This project includes design, development, implementation and commissioning

NEERAJ BANSAL

equipment and competition is leading to a significant improvement in key performance parameters. The PPP model has proved to be very successful as the best global players have started terminal operations in the Indian port sector, thus augmenting the capacity of ports.

What are your future projects and pipeline for development of ports and SEZ? JN Port handled 63.80 million tonnes of cargo during the last financial year. We will add another 10 million tonne capacity in 2016 by commissioning a standalone container terminal of 330 metres length by Nhava Sheva (India) Gateway Terminal Pvt Ltd (NSIGT), an SPV of the DP World.

After commissioning of the first phase of a mega fourth container terminal, we will add another 30 million tonne capacity by the end of 2017. It is the biggest FDI project in the port sector involving a cost of `7,915 crore by M/s Bharat Mumbai Container Terminals Pvt. Ltd.

of an integrated port operations system covering functional areas like finance, traffic operations, mechanical engineering, administration, marine operations, port planning and development, etc. The projects will also automate the library and workflow management, including document management, with a centralised user management and single sign on.

How has JNPT benefitted from PPP projects?

In order to enhance capacity of ports and upgrade the existing facilities, the Ministry of Shipping adopted a policy to build the facilities under PPP model. Under this model, the port sector has attracted an investment of more than Rs 42,000 crore. Moreover, JN Port was the first to develop a container terminal under this replica on Buy-Own-Transfer (BOT) basis with NSICT in April 1999.

Further, we added GTI as second PPP partner at JNPT. All three container terminals together handle more than 4.45 million cargo in a year.

The entry of private entity brought in modern

PORT SECTOR

investments for construction of jetties, berths, deepening of channels, procurement, replacement or upgradation of port equipment and to improve hinterland and last-mile connectivity.

A major issue is delay in implementation of projects, especially that of greenfield ports and SEZs or port-based SEZs, on account of the protracted process of receiving clearances, like environmental clearances, security clearances and litigations during tendering process and after awarding the project. There is no single-window clearance, so a project moves through multiple departments and processes at the state and central levels, which considerably delays the process.

The other issues in augmenting port capacity are land acquisition, long term loans, etc.

How do you feel the port sector can attain a sustainable profitability?

In order to make port sector attain sustainable profitability, following initiatives need to be taken:

In order to contribute to ‘Make in India’ campaign, JN Port has taken a lead and is developing a multi-product port-based SEZ. This will create huge job opportunities for the youth in this region (BMCTPL), an SPV of the Port of Singapore Authority (PSA). It started its construction activities in March 2015 and will develop two kms of jetty in two phases.

JNPT has planned to develop a Satellite Port near Vadhavan in Thane district, a joint venture with the Government of Maharashtra and two dry ports near Wardha and Jalna each, in Vidharbha and Marathawada regions.

Besides, in order to contribute towards ‘Make in India’ campaign, JN Port has taken a lead and is developing a multi-product port-based SEZ. This will create huge job opportunities for the youth in this region.

What are the challenges faced by ports and SEZ in the Indian scenario?

Upgrading the basic infrastructure and improve the competitiveness of Indian companies will reduce logistics cost. The port sector requires huge

More autonomy and financial power to major ports: Major ports need more liberalisation and autonomy or a new structure akin to corporatisation for speedy decision-making and accountability Deregulation of tariff: Regulators like Tariff Authority for Major Ports (TAMP) should be transformed from a tariff regulator to a competition regulator on the basis of a new Port Competition Act, applicable to all commercial ports Productivity improvement: Productivity of ports needs to be improved at par with international level Proper planning of infrastructure: As the JN Port is handling about 40 per cent of the country’s EXIM containerised cargo and working with more than 90 per cent of the capacity for last several years, port is working on the optimum utilisation of available infrastructure.

September 2015 / Ports Summit Special Issue

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PORTS

DIGHI PORT

In Tune with Changing Times H

ow important is the concept of port-led development? What measures are being introduced by Dighi Port to initiate and enhance the module?

It has been estimated that around 90 per cent of the world’s merchandise and commodity trade is transported by ships. This strengthens the importance of ports in international trade. Ports not only facilitate movement of goods into the hinterland, but also cater to the neighbouring land, thereby spurring a host of economic and infrastructure activities, such as roads, railways, telecommunications, power, etc. Ports create jobs and generate large-scale employment, providing fillip to the growth and development of the region it serves.

All mega cities around the world are port cities – a clear example of port-led development.

Dighi Port Ltd is setting up the first private port in the public-private space near Mumbai

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Ports Summit Special Issue / September 2015

Dighi Port accords great importance to the development of infrastructure, so as to ensure seamless connectivity for cargo transportation, says Vijay Kalantri, CMD, Dighi Port, in an interview with Poulami Chakraborty of Elets News Network (ENN) and is also establishing a Special Economic Zone (SEZ), inclusive of a Free Trade and Warehousing Zone (FTWZ) around the port with modern infrastructure. The port is equipped with state–of–the-art facilities and forms an integral part of the Delhi–Mumbai Industrial Corridor (DMIC) and will have access to the Dedicated Freight Corridor (DFC). The company’s growth prospects hinge on sound infrastructure policy supported by pragmatic investment policy. The speedy infrastructure development in the country in terms of roads, railways, ports, power and telecommunications will provide the necessary impetus to Dighi Port and enable it to improve the overall economy of the region.

How do you view the growing competition in the private port sector?

Port development has been opened up to the private sector as well as under Public-Private Partnership (PPP) mode. Several major and minor ports with private sector participation are being set up in the country. In recent times, private sector participation in ports has increased. Port Pipavav, India’s first port in the private sector, is situated on the West Coast of the country. The country’s biggest private port at Krishnapatnam in Nellore district of Andhra Pradesh opened a new gateway to South India through the East Coast. That apart, Adani and Essar are among other private ports in the country.

DIGHI PORT

PORTS

The entry of the private sector into the port space has no doubt intensified competition among the players. In keeping with the demands of ever-growing international trade, the port developers are trying to keep abreast of the changing needs of port operations. Ports are being equipped with modern and sophisticated equipment in accordance with the international standards and there is increasing focus on streamlining port and logistic operations to ensure speedy and smooth movement of goods.

What steps are being taken

by Dighi to ensure seamless connectivity for cargo transportation? What investments are being made for the same?

Dighi Port accords great emphasis on the development of infrastructure to ensure seamless connectivity for cargo transportation. An investment of approximately Rs 1,500 crore in the road and rail connectivity projects is envisaged. The Port has established the following facilities:

Road l Both banks of the port are connected to

the National Highway (NH)-17 via four State Highways (SH). l The North Bank is connected with NH-17 via SH-92 and SH-96 l The South Bank is connected with NH-17 via SH-97 and SH-98

Railways l We have received an approval from the

Ministry of Railways to develop railways siding at the Port under the Special Purpose Vehicle (SPV) model of the recently announced Participative Policy for Upgradation of Rail Connectivity of Indian Railways l Will be connected to the nearest Central Railway Head at Roha, which is at a distance of 34kms With the gateway ports in Mumbai currently working at full capacity and even at stretched capacity, Dighi Port, with its strategic location and well- planned infrastructure, has geared up and is ready to handle the cargo generating from North, West and Central India in a hassle-free and an economically viable manner. The Port offers entire value chain under one umbrella.

What measures are being taken to develop the Port further? How

The entry of the private sector into the port space has no doubt intensified competition among the players. In keeping with the demands of ever-growing international trade, port developers are trying to keep abreast of the changing needs of port operations will this ensure progress and development of the State?

Recently, the Dighi Port commissioned the longest operational quay length for a non-major port in Maharashtra that has been developed at an investment of approx Rs 2,500 crore in Phase-I encompassing five berths with an installed capacity of 30 million tonne, 14.5metre depth across a land bank of 1,600 acre.

Further, it is being developed in a phased manner to facilitate handling of 100 million tonne cargo. It is the only port which has got the permission to build a Liquefied Natural Gas (LNG) terminal and also a port-based SEZ, inclusive of a FTWZ giving all the characteristics to become a transshipment hub.

How does the Dighi Port ensure seamless connectivity to all the economic corridors?

mentation of Dighi Port-Roha Rail connectivity through JV route between RVNL and DPL in February 2015. The estimated cost of the 34km Dighi Port-Roha Rail project is Rs 800 crore. It will have provision for running of double-stack container trains and heavy freight trains, and will be constructed as a feeder route to DFC linking JN Port with Ludhiana.

The MoU signed with the Government of Maharashtra for widening and strengthening of 100km of road (SH-92, SH-96 and SH-97) connecting both the banks of Dighi Port from NH-17 for smoother movement of port cargo.

The development of rail and road connectivity will provide seamless connectivity to all the important economic corridors, such as DMIC, NMIZ, Sagarmala project and Coastal Economic Region to connect the southern, central and northern pats of the country.

The Ministry of Railways had approved imple-

September 2015 / Ports Summit Special Issue

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MARITIME FINANCING

EXIM BANK OF INDIA

I

ndia is a major maritime nation by virtue of its long coast line. The importance of the maritime sector can be gauged from the fact that about 90 per cent by volume and 70 per cent by value of the country’s international trade is carried on through maritime transport. However, a matter of concern is the fact that currently only about 10 per cent of India’s foreign trade is carried by ships with an Indian flag, while the ships manufactured in India carry even less cargo. Although the Indian seaborne trade has been growing rapidly, Indian shipping and shipbuilding sector has been lagging behind despite their development potential. As per the Government’s Manufacturing Plan 2012, India aims to achieve five per cent share of the global shipbuilding market and 10 per cent share in the global ship-repair industry by 2020. This would need concerted efforts of all stakeholders.

Rowing Maritime

Towards Merrier Times The Exim Bank has been both a catalyst and a key player in the promotion of cross-border trade and investment, and helped in the globalisation efforts of Indian industries, writes the Bank’s Chief Managing Director, Yaduvendra Mathur With the new Government’s keenness to develop ports, shipbuilding and the shipping industry, the maritime business of the country shows the promise of rapid growth. The prospects seem big for a growing maritime profile of the country. The Government of India’s Maritime Agenda – 2010-2020 has highlighted several issues and focus areas for promotion of the Indian shipping and shipbuilding industry in the country.

Revitalisation of Ports With a view to transforming Indian ports into world-class facilities, the Government has initiated many path-breaking measures which would facilitate enhanced private investment, improve the service quality and promote competitiveness, apart from achieving the expansion of capacities in the country. These include measures, such as formulation of Maritime Policy, revision of various operational policies

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Ports Summit Special Issue / September 2015

EXIM BANK OF INDIA

is the Gujarat Maritime Board (GMB), which has recently come up with its own shipbuilding policy (Shipbuilding Policy 2010). The policy aims to develop Marine Shipbuilding Parks (MSP) and clusters to create ancillary base for the industry and help reduce costs to the shipbuilders by sharing costs, such as common infrastructure, logistics etc. Besides GMB, the Tamil Nadu Maritime Board and the Maharashtra Maritime Boards are also actively trying to promote and revive the maritime sectors in their respective states. Other states should also be encouraged to have similar enabling policies, so as to help develop the maritime industry.

Maritime Financing Facilities

and preparation of perspective plans for the major ports, among others.

‘Make in India’ Initiative, Sagarmala Project The ‘Make in India’ initiative of the Government of India provides a major boost to the manufacturing sector in India and also opens up immense opportunities for the maritime sector in the country. There exist opportunities for Make in India, especially in the shipbuilding industry, development of port infrastructure and development of ancillary industries. In this context, the Government’s Sagarmala project, an infrastructure development-cum-policy initiative, strives towards holistic development of India’s maritime sector. The Project would especially provide opportunities for expansion and modernisation of port infrastructure, development of port-based industrial parks, developing efficient rail, road, coastal and inland water transport networks to the hinterland and development of ancillary industries and Coastal Economic Zones (CEZ). The Project, in the years to come, could play a significant role in modernising and enhancing the capacity of major and non-major ports, thereby enabling them to become drivers of port-led economic development.

State Maritime Policies Development of state maritime policies and state maritime boards is extremely important for development of the sector. A case in point

The financial needs of the sector include provisioning of long-term funds for meeting the large capital, operational and other requirements of the industry. Long-term funds are also needed for providing long-term buyers credit facilities and at competitive rates in line with international competition. The need of the hour is, thus, essentially long-term and low-cost funding, as is the case in countries, such as China, Korea and Japan, where players in the maritime sector receive loans for a very long tenure at competitive rates supported by government measures and initiatives.

In the current scenario, the maritime sector and especially the shipbuilding industry in India is facing a challenging time. Banks and

Long-term funds are needed for providing longterm buyers credit facilities and at competitive rates in line with international competition... essentially, the need of the hour is long-term and low-cost funding

MARITIME FINANCING

Financial Institutions (FIs) face increasing difficulty in extending further financial assistance to the sector, and particularly to the critical needs of the shipbuilding sector. It is time perhaps for the banks and FIs to get together and set up a dedicated fund for the purpose. Possibilities of enhancing the corpus by international borrowings, through suitable credit enhancement may have to be explored by the banks and FIs to finance this critical need of the industry.

Conducive Maritime Ecosystem With regard to innovative financing mechanism, there is a need to provide an enabling environment, backed by availability of physical infrastructure to facilitate and promote the maritime sector in India. An example in this regard could be the case of the Busan International Finance Centre, in Korea. The marine finance units of Korea Eximbank (KEXIM), Korea Trade Insurance Corporation (Ksure) and Korea Development Bank (KDB) have collaborated to create a Maritime Financing Centre (MFC) in the Busan International Finance Centre, for effective implementation of their marine financing schemes. The Centre provides a single source bouquet of services to the maritime industry in Korea. A similar model could be replicated and implemented in India and perhaps the GIFT city in Gandhinagar could be an ideal location for this endeavour.

Exim Bank’s Support to Maritime Sector Since its inception, Exim Bank has been both a catalyst and a key player in the promotion of cross-border trade and investment. Commencing operations as a purveyor of export credit, like other export credit agencies in the world, Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering with Indian industries, in their globalisation efforts, through a wide range of products and services offered at all stages of the business cycle. Exim Bank is one of the key financial institutions supporting the Indian maritime industry, with financial support extended to Indian companies in sectors, including shipbuilding, shipping services, ports and services, and other infrastructure. In the past, Exim Bank has also extended buyer’s credit to the Government of Sri Lanka for financing acquisition of vessels, being executed

by Goa Shipyard Ltd. (GSL).

September 2015 / Ports Summit Special Issue

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PORTS

SHREYAS SHIPPING

Ports Need Infrastructure With a port-based industries approach, the costs come down and one can compete in the market, says Capt Vivek Kumar Singh, Chief Executive Officer, Shreyas Shipping & Logistics Ltd, in an interaction with Rachita Jha of Elets News Network (ENN)

H

ow the ecosystem of a port city compliments maritime trade?

The pulse of any port city is the port-related industries located very close to the port’s hinterland, such as an SEZ or industrial clusters. With these industrial locations available in the port city vicinity, it makes the logistics costs come down and the import/ export cycle of raw materials or finished goods gets shorter with smaller footprint of road transport that contributes to pollution and also costs escalation. With a port-based industries approach, the costs come down and one can compete in the market.

Further, if we look at countries like Japan or China, the industries are located near the port, so that the cargo goes to end-use industry directly, be it factories or thermal power stations. The reason that our domestic volumes are not increasing by the sea is because of first mile and last mile costs, even though it is known that sea logistics is most cost-effective.

We have seen that it is usually one or two industries near the ports that give much of volumes.

This potential can go up in an incremental way if we just have more industries coming in these port cities. The major reason for increasing costs of products is the first-mile and last-mile costs, which are huge today.

What would be your suggestions for Maharashtra to gain competitive advantage?

The State already has two major ports — JNPT and Mumbai Port Trust — that have been at advantage over the years when compared to the ports of other states. Moreover, these ports are overcrowded with huge cargo volumes entering Maharashtra. We have not been able to catch the additional volumes that we have today, because

16

Ports Summit Special Issue / September 2015

The Sagarmala Project is well conceptualised and is on the right track. It will give a push to sea logistics as it is economical, environment-friendly and time-sensitive our infrastructure is not of that capacity. So, that is where we are at a disadvantage.

At the same time, the reason why India has not become a transshipment hub is because we have an approach of incremental capacity and are always on full load, and there is no scope for transshipment. Thus, we have been unable to make a hub port or transshipment port in India. However, there is a need to make a hub port and it has to be as good as that of Colombo or Singapore ports.

As our ports are already running at full capacity, we have lost cargo volumes. So, we have to build capacity and be more customer-friendly with ease of doing business.

Also, the port has to have road and rail connectivity with the adjoining industries. Thus, port and infrastructure should go hand in hand, only then will any state government be able to exploit the full potential of the port.

Please share your views on the Sagarmala Project.

The Sagarmala programme is well conceptualised and is on the right track. It will give a push to sea logistics, as it is economical, environmentfriendly and time-sensitive. However, if we don’t have connectivity, the advantage of sea is lost to rail. But if the connectivity is plan-integrated with Sagarmala programme, the ports will develop and start functioning well. Also, when the load from major ports start getting distributed to other ports, the decongestion of inland transport system will work for the maritime economy.

4

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WATERWAYS

IWAI

Inland waterways will propel the economic growth and port-led development as the Government plans to add 20 more rivers to the already listed 101 rivers, shares Amitabh Verma, Chairman, Inland Waterways Authority of India (IWAI), with Prathiba Raju of Elets News Network (ENN)

20 More to 101 Rivers as National Waterways

W

hat is the status of the National Waterways Bill, 2015?

The National Waterways Bill was placed in parliament and then moved to the Parliamentary Standing Committee, which gave its suggestions to IWAI after examining all the stakeholders.

IWAI accepted the changes and suggestions of the Committee and now, we have given our comments. The suggestions mainly included adding and deleting some waterways based on the state governments’ feedback. After the suggestions are implemented, the number of National Waterways will increase from 101 to 121 waterways.

IWAI has drafted a cabinet note and sent it to the government. Now, it will be circulated to all the ministries to get their views and again it will be

18

Ports Summit Special Issue / September 2015

IWAI

The Road and railway sectors are pre-dominantly for carrying passenger traffic and both modes are becoming expensive. So, transporting bulk commodities via waterways would soon be the best option placed in the next session of parliament. In the meantime, IWAI has done all the preparatory work like categorising the 101 waterways and the additional ones. Once the government approves it, we will work on that also.

How do you plan to develop 101 waterways?

The 101 waterways have been categorised into three parts. Out of these, the first 43 waterways are prioritised as highly doable rivers, which has existing data. Moreover, out of the 43, there are 12 such waterways, for which we are in the process of preparing DPR and tender documents will be available by January. Out of these 12 identified waterways, eight will have the EPC

by early January. We hope by that time National Waterways Bill will get the parliament nod, so that we can go out for bids and tendering for the development of the waterways. For 44 waterways, we have invited consultants for a feasibility study and engineering design. For the remaining 45, we are exploring only the feasibility study.

How will inland waterways boost the bulk cargo movement?

The National Highway network in our country faces the issue of congestion and is prone to accidents, which mostly hinders the smooth cargo movement. The country’s demand for seamless transportation of bulk commodities is increasing as more and more power and

WATERWAYS

fertiliser plants are coming up; there is a need for greater bulk movement of coal, fertilisers and food grains. Road and railway sectors are pre-dominantly for carrying passenger traffic and both modes are becoming expensive. So, transporting bulk commodities via waterways would soon be the best option.

For example, the river Ganga already has 11 existing power plants and 10 more at different stages of commissioning; so, in five years, transporting cargo via the Ganges would be cheaper.

Similarly, the National Thermal Power Corporation (NTPC) has given a commitment of coal movement of three million tonnes, annually, via waterways for seven years for its Farakka plant. NTPC has decided to opt for waterways to move the 16 million tonnes per annum of coal for the power plant which is near Patna, for 10 years.

With dry and polluted rivers, is it possible to boost waterways across the country?

It is not necessary that the whole earth must be motorable for a road to be laid out. Similarly, it is not necessary that the whole width of the river needs to be navigable. We have to dig out a channel of 40 to 60 meters, where two barrages

September 2015 / Ports Summit Special Issue

19

WATERWAYS

IWAI

are looking at increased budgetary support and multilateral funding and PPP model. We might opt for market borrowing a few years later.

Unlike the National Highways Authority of India (NHAI), which only looks into building road infrastructure, for us it is not an easy affair.

We have to ensure attracting investors, promoting business and look for some tie-ups and incentivise the shippers, because the market is not yet ready.

What about the state governments’ participation?

Coastal states understand that water is for navigation and shipping as well. But most of the inland states believe that water is mainly for drinking and irrigation, industrial purposes.

IWAI has been writing to these and brought many state governments on board and conducted workshops to emphasise the role of inland waterways. IWAI has a right to develop the rivers notified as National Waterways; the other rivers are under the control of respective state governments.

Most of the states don’t do the dredging for any of the rivers on their own, as they just do the embankment protection to manage the flood situation. If they do dredging, the silting will be removed and water level will be maintained. The two states which have shown interest are Uttar Pradesh and Bihar. Bihar has already allotted a tender for dredging and has asked IWAI to train for their water resources engineering staff at the field level for scientific dredging.

The country’s demand for seamless transportation of bulk commodities is increasing, especially because more and more power and fertiliser plants are coming up can go across. Most of the rivers have their own depth and it should be maintained. Locating the deepest channel, IWAI will protect and maintain the channel around the year. It will maintain three-metre depth, so that a 2000 tonne barge can be moved. If that is not possible, two-metre draft depth can be maintained and it can move 1000 tonne vessel. Apart from this, IWAI is also looking for the right kind of

20

Ports Summit Special Issue / September 2015

ship designs, which can carry larger capacity with least depth availability. As for ferry services for passenger movement and Roll On and Roll Off (RORO) facilities, 1.5-metre depth is sufficient for a 2000 tonne vessel.

How do you manage the funding?

Has it been flowing in smoothly?

Funding for the sector has been an issue. We

Can IWAI help in promoting Cruise Tourism?

IWAI’s primary job is to maintain the necessary draft of the rivers near pilgrimage routes, so that cruise operations take place all year round. At the moment, we operate six trips between Varanasi and Patna for just 45 days between September 6 and October 20.

If there required depth in the Ganga, we can invite more vessels for cruise on this route and can even consider extending the itinerary up to Allahabad. As of now, the cruises operating are high-end cruises and most of the domestic tourists can’t afford them, and most of the tickets are sold overseas. With growing interest, we have asked the Tourism Ministry to address the domestic tourist interest as well.

JAAJ (JAN)Â FRANSEN

CSR POLICY

Industry-wide CSR

A TOOL FOR PORTS

Customer demand and industry competitiveness are the main drivers of CSR today, writes JAAJ (Jan) Fransen, Executive Director, Green Award Foundation. CSR principles should, in fact, be commonly accepted as business as usual, he insists

CSR and maritime industry The Hong Kong convention on ship recycling, the type and quality of fuel used for propulsion, innovations on energy conservation, labour employed on board ships, cargo operations and navigational routes are just a few examples to be considered when developing CSR policies in shipping.

Some are dealt-with by international regulations, although this is not at a desirable speed.

Therefore, from an ethical point of view, shipping companies, shippers and charterers could decide to go the extra mile in the early implementation of upcoming regulations or to maintain high standard policies on issues that are not regulated.

On the other hand, for ports, the implementation of CSR policies becomes more complex, since they deal with both the wet and dry sides of the industry, along with their direct relationship to the society. It is a real juggling act, concerning the demands from the local industries, society and shipping companies, with the ports sitting right in the centre of the maritime supply chain. For this reason, the impact of the ports can make on the social aspects of the maritime industry is immense, regardless of the complexity of their implementation.

Green Award as a CSR Platform There are various ways to promote the best practices: providing guidelines and recommend ations, promoting ne west technology, regulating air emissions, educating & training for awareness, etc. The certification/ incentive scheme of Green Award Foundation is one of the tools to motivate the shipping industry to go the extra mile in addressing the aforementioned topics in a holistic approach.

One of Green Award’s main objectives lie in creating a network of incentive providers (ports and non-ports), who reward the ships

certified by the Foundation either financially or operationally. From ports, pilot organisations, ship routing companies, training organisations, manufacturers, to banks, there are diverse forms of organisations granting incentives.

These organisations altogether support the shipping industry to remain sustainable, in terms of hardware quality, safe operations and protection of environment. These in return, act as risk reduction in port area and ports’ contribution to a true CSR on a global scale.

Green Award is continuously developed by the partners in the maritime industry, with over 125 entities involved in the Green Award programme and 750 ships certified.

The 39 port incentive providers are representing 12 different countries around the world.

The Netherlands being the initiator and early adopters, the latest additions are Hamburg Port Authority from Germany and Port of Kitakyushu from Japan, the first port in Far East Asia.

Contribution from India India, as a growing economy, growing maritime nation, and having large number of ports and seafarers, is most natural for Indian stakeholders to work together with Green Award to share, contribute and influence the shipping/maritime industry and its future. KARCO from Mumbai, a company developing comprehensive safety videos for ships, became the first Indian company to partner with Green Award.

In early 2015, a delegation from Green Award attended India. The visits included Joint Secretary of Ministry of Shipping, Gujarat Maritime Board, Central Pollution Control Board, DG Shipping, Chennai Port Trust, Adani Ports, Essar Ports, and L&T Kattupalli Port. Based on the solid talks the delegates had with these heart-warm welcoming organisations, Green Award would like to continue talks with various stakeholders in India.

September 2015 / Ports Summit Special Issue

21

INFRASTRUCTURE

RAJ GOPAL

Towards Holistic

Development of Port Sector

W

hat initiatives have been taken by the Government of Gujarat for development of port sector in the State?

Developing a sector like port is a long-term process. The Government has taken several initiatives to develop the port and maritime sector in the State. Gujarat was the first State to create an autonomous body in 1982 – the Gujarat Maritime Board (GMB). It was formed under the GMB Act, 1981 for developing, operating and regulating non-major ports of the State. In 1987, Captive Jetty Policy was declared to allow private companies to operate their own jetties in GMB ports. Moving ahead, the Port Policy, in 1995, provided an integrated port development platform with public-private participation, synchronisation of small and large investors in port sector, and creation of market-driven port sector.

In 1997, the Build, Own, Operate and Transfer (BOOT) Policy was provided for port locations. BOOT policy brought operational flexibility with tariff freedom, adequate compensation on project transfer, bankable project document and model concession agreement.

To attract private players, GID Act in 1999 focussed on fair, transparent and clear-cut mechanism for selection of developers, through competitive bidding. Subsequently, the 2004 SEZ Act (Gujarat) paved the way for minor ports and related services in special economic zones in Gujarat, wherein developers would fix and collect tariff.

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Ports Summit Special Issue / September 2015

A holistic development of the port sector is a fundamental need for emerging ports, and Gujarat is well on its way to achieve that, says Raj Gopal, Principal Secretary, Ports & Transport Department, Government of Gujarat, in an interview with Nirav Soni of Elets News Network (ENN)

What are incentives or special packages provided by the Government of Gujarat to attract investment in the port sector?

We were the first maritime State to introduce a port policy and we are the pioneer in developing ports with private sector participation.

Gujarat has formed several models of the private sector participation to suit the requirements of various stakeholders. The State has also developed bankable model concession agreement with a well-balanced risk sharing mechanism allowing mortgage of assets and rights that helped secure funding.

Our concession framework allowed giving ports considerably long-term concessions.

Tariff setting freedom is probably another major benefit given under this model.

For the private and captive jetties also, the schedule of port charges are finalised by GMB after reviewing market conditions and consulting stakeholders. Gujarat also came up with the Shipbuilding Policy in 2010 and LNG Terminal Policy in 2012 to provide various incentives to these industries.

These port-specific incentives, along with stable policy framework and ease of doing business in Gujarat, have helped the growth of the maritime sector in the State over the last decade.

What security measures have been undertaken for smooth functioning of all ports?

The Government has taken various initiatives to secure its coast. One of these is the advanced VTMS system. In the Gulf of Kutch, it has been

RAJ GOPAL

operational since 2008 whereas in the Gulf of Khambhat, it has been operational since 2010, and GMB is planning to extend the cover to the remaining coastal area from Okha to Jafrabad.

The Integrated Security Management System (ISMS) will handle security related sub-systems, such as the security management, useful in disaster management and environment management considering the requirement of International Standards of Port Security (ISPS) Code and IB guidelines related to Information Technology. The system would help in proactive identification of disaster/emergencies and help in an automated response mechanism.

and information shall be integrated with ISMS to provide suitable real-time alerts to all the stakeholders.

What are the future plans of the Government to provide better services to its customers?

In the current scenario, modernisation is the need of the hour that will enable ports to be extremely competitive. In order to offer optimal combinations of time and cost, GMB is undertaking work of modernising and mechanising ports, like Magdalla and Bhavnagar in the initial phase. Also, modernisation of shipbreaking

In order to offer optimal combinations of time and cost, GMB is undertaking work of modernising and mechanising ports like Magdalla and Bhavnagar in the initial phase Hence, this system would also create a communication infrastructure, which is omnipresent in the nature with essential focus on video surveillance.

The project is planned to be implemented in two phases. In the first phase, the locations to be included are Navlakhi Port, Okha Port, Porbandar Port, Jamnagar Port, Surat Port and Gandhinagar Head Office. The system would include video surveillance, perimeter intrusion detection, incident / disaster response, central command & control and physical screening systems in long-run weather alerts,

yard at Alang Sosiya recycling yard in cooperation with the Japan International Cooperation Agency (JICA) is in the offing.

In order to address information needs emanating from within and outside, GMB has planned to introduce IPMS, which will be divided into three major modules. The three modules are Enterprise Resource Planning (ERP), Port Operations Management System (POMS) and ISMS. The proposed system shall be a web-based system that will centralise the architecture across all GMB ports in Gujarat and will track port-level transactions. Once the

INFRASTRUCTURE

system is in place, all the activities shall be carried out online, enabling smooth functioning and better services to customers.

The Gujarat Maritime Board has also planned a maritime university and commercial maritime cluster projects as next generation projects that would improve soft infrastructure in the maritime space. GMB will further standardise port operations processes and explore possibilities to cut short documentation by eliminating redundant and duplicate information, thereby ensuring ease of doing business in true sense.

What message would you like to give to the corporate world at large?

Holistic development of the port sector is a fundamental need for emerging ports. It comprises cargo-handling activities, total integrated logistics solutions and support industries. Gujarat is heading in the direction of holistic development of its ports with its path-breaking initiative towards devising an integrated maritime-cum-port policy.

The idea is to integrate all the other developments / policies announced by the State and the Government of India, keeping in mind the global developments. Simultaneously, the State in its efforts to create a complete ecosystem of port/ shipping activities, would like to pursue maritime cluster, which will provide ample opportunities to the investors to help grow their business. With a backdrop of ‘Make in India’, I invite shipping companies to come and invest in Gujarat, as it has a great potential for shipbuilding yards and shipbreaking & recycling industry owing to its strategic location, superb infrastructure and ease of doing business.

September 2015 / Ports Summit Special Issue

23

TECH IN PORTS

A K RAKESH

The Gujarat Maritime Board (GMB) is entrusted with the task of port operations and port regulations. It is also responsible for the ship building and breaking activities. Going beyond, GMB is now planning to set up Maritime University and Maritime Cluster, says A K Rakesh, Vice Chairman and Chief Executive Officer of Gujarat Maritime Board, in conversation with Nirav Soni of Elets News Network (ENN)

Maritime University,

Cluster for Gujarat soon

W

hat ICT practices have been adopted by GMB for effective and efficient functioning of ports across Gujarat?

We are planning to implement Port Operations Management System (POMS). It will connect all 11 groups of ports to the head office, which in turn are connecting 44 ports of Gujarat. There would be constant flow of all kinds of infor-

24

Ports Summit Special Issue / September 2015

mation seamlessly from the ports to the head office. This will increase our work efficiency in a big way. In future, we will also implement an ERP system and Human Resource System and these steps will boost the organisation.

What are the main features of POMS? In order to achieve accelerated cargo and container handling times and greater organisational reliability of the transport chain end to end, it is important to modify the business parameters.

Improved conditions have to be established for handling the goods and the reception of various modes of transport, not only in terms of infrastructure and equipment, but also when it comes to ICT. Using ICT in port operations is required to ensure accurate, timely, and, whenever feasible, real-time information on the status of all transactions, vessel activities, cargo operations and marine services. Well-managed vessel traffic is one of the key components for successful port operation. Using ICT integrated with radar and automatic identification systems

A K RAKESH

TECH IN PORTS

in vessel traffic management system enables tracking of vessel movement and provides improved safety at the entrance and anchorage areas, along with main routes to berths.

How is security taken care of around all ports located on the longest coastline of the country?

At present, we are manning the ports with around 308 Gujarat Industrial Security Force (GISF) personnel, but it is not enough. We want to increase the number of personnel in this area. Probably, we may go for a battalion of the State Reserve Police personnel, calling them a Marine State Reserve Police. That apart, we are planning to implement Integrated Security Management System (ISMS), which will have the boundary control with a fully integrated surveillance system with CCTV cameras installed at major ports.

What initiatives are being undertaken for capacity building and on the human resource front?

Capacity at ports is constantly getting enhanced every year. In the year 2014-15, we have added a capacity of 35 million tonnes. Today, we have a capacity of 450 million tonnes. Along with this, we are trying to increase the efficiency of ports

focuses on commercial and legal aspects of port operations.

Similarly, we feel that there is an urgent need of a maritime cluster, and we have taken a decision in principle to set it up, where all soft services required by the port sector will be available at one place. This, in turn, will facilitate business through port sector for everybody.

Personnel from each division will be available at one place, be it maritime financing companies, maritime lawyers, steam doers to charters, for ease of doing business in a structured manner.

What steps have been undertaken by the Government of Gujarat and GMB together for attracting FDI? Gujarat is the first State to go for private

Capacity at ports is constantly rising every year. In the year 2014-15, we have added a capacity of 35 million tonnes... Along with this, we are also trying to increase the efficiency of ports by introducing latest technologies by introducing latest technologies. We are also renovating our jetties, which in turn is encouraging our private ports to increase the capacity.

Connectivity is an issue, whether through the railways or by way of roads.

We are taking a futuristic initiative on the human resource front and coming up with a Maritime University. We understand that the need of the hour is to have trained manpower especially in commercial side of the port sector. As of now, the available institutes train people on the technical side, and our Maritime

investment in the port sector and today we have four big ports being managed by private players. Mundra Port is the biggest port in the country today. The quantum of cargo handled by Mundra today is to the tune of 115 million tonnes, though it came much after the well-established ports in the country were set up after the Independence. Mundra was established at the start of this century, and today it is number one port in India. We have very investment-friendly policy to invite private players.

In the ship-building area, there are already nine ship-building yards in Gujarat and around 15 are in the pipeline. There is a lot of scope for private players in this area. For example, APM terminal that handles around 65 terminals across the globe has acquired the terminal of Pipavav Port.

Can you please elaborate on the ship-building areas?

We are taking the advantage of long coastline of Gujarat. Our proactive measures, the bureaucracy and the State Government have played a crucial role in bringing up ship building as a separate industry in Gujarat, though at the moment, it is in distress. In fact, we had come up with Ship Building Policy in 2010.

Ship building is the area where we don’t go for bidding, and are allocating water front on firstcome-first-serve basis, of course, after looking at the capabilities of the applicant in this area.

Since this industry is quite labour-intensive and takes long time to reach fruition, it requires more incentives to be given. We have suggested the State as well as the Central Government to look into it. These incentives are being thought about, and in due course of time, a clear incentive policy will be in place.

Any message you would like to give to the private players in this field?

There is a lot of emphasis by the Central Government on Sagar Mala. This concept basically aims at port-led development.

Gujarat probably has shown the way. It has not only gone for port development, but also for port-led development. We have different types of jetties and ports. There is a sea of opportunity available in Gujarat over a 1600 km coastline...there are opportunities for all to explore.

September 2015 / Ports Summit Special Issue

25

IT IN PORTS

GUJARAT MARITIME BOARD

Ships to

Sail Smooth

on Technology Port operations in India are facing typical issues like tailback of heavy vehicles waiting for cargo handling, delays in permission related to ship movement or anchoring, cumbersome process to complete various paper work, etc. To set things right, the Gujarat Maritime Board (GMB), the nodal agency for port sector development in Gujarat plans to make ample use of ICT at the ports in the State. Nirav Soni of Elets News Network (ENN) writes about the Port Operation Management System (POMS) Project of GMB

T

he non major ports in Gujarat have been able to attract a considerable share of the maritime freight movement. In fact, in the latest fiscal, the non-major ports have overshadowed their larger counterparts, posting double-digit growth in traffic on the back of better infrastructure and value-added services. The traffic of the non-major ports of Gujarat grew to 336 million tonnes in 2014-15, which is more than 30 per cent of the total national cargo and more than 70 per cent of the cargo collectively achieved by the non-major ports of the country.

Gujarat’s ports have contributed in no small measure to the economic success story of the State. This has been acclaimed by several maritime and economic experts in India and abroad alike. Apart from the strategic location coming to its advantage, the key factor has been the vigorous zeal with which the State and the GMB have encouraged port liberalisation through private investment and modernisation of facilities.

In line with the anticipated expansion of port facilities and traffic growth at Gujarat ports, GMB has identified the key requirements in the near future, one of which is the use of Information and Com-

26

Ports Summit Special Issue / September 2015

POMS: Operational Objectives l To provide single gateway to all stakeholders – SSO, API Management l To plan for yard, berth, gate, vessel, warehouse, cargo and container terminals, allowing secure information exchange – IDAM l To monitor and track costs and measure performance – PPM l To maintain high serviceability and availability of port equipment l To improve utilisation of assets and reduce asset management cost – IT Asset PM l To make the cargo and containers more secure and safe l To reduce administration cost, errors and its rectification cost l To continuously monitor and track agents’ and suppliers’ performance– PPM l To improve real-time and effective management reporting l To offer multiple, convenient and inclusive platform for ensuring prioritised services that can be accessed anywhere, anytime and anyhow

GUJARAT MARITIME BOARD

munication Technology (ICT).Use of ICT in port operations will improve organisational efficiency, enhance stakeholder satisfaction and lower organisational costs. Hence, GMB has envisaged implementation of POMS as part of the Integrated Port Management System (IPMS) project.

Once implemented, POMS can act as a single solution to GMB’s information needs emanating from within and outside. POMS will also cater to all business transactions and revenue generation activities happening at all the GMB ports. The deployment of POMS modules will include operation management, e-Business management, Electronic Data Interchange (EDI) and agent management, among others.

POMS will be used by various departments of GMB as well as all the outside stakeholders like importers/exporters, clearing agents, stevedores, banks, etc. The hosted and managed large pool of applications infrastructure of POMS at the Gujarat State Data Center will be first of its kind. It will facilitate easier access, security, adoption, bilingual interactions, transparency and efficiency with ‘One Web’ approach to enable digitalisation of the Indian ports.

Besides, there would be lots of actionable data following POMS implementation for analytics purposes to provide dashboard for management’s insight, like key performance indicators, along with cost centres and profit centres. The Big Data management using business intelligence tools will modernise the traditional paper-based procedures. POMS will also be utilising GIS-based metrics that will be initially 2D/3D surveyed through LIDAR tech-

IT IN PORTS

Benefits of ICT at Ports l Decreased time and cost for vessel and cargo procedures, including vessel and cargo clearance l Better integration of port community l EDI and better decision support through online information on past and current port operations l Decreased port congestion through gate management control l Fewer incidents of human error l Minimised and optimised operational procedures, supported with planning capabilities l Minimised vessel and cargo clearance time l Increased productivity and profitability through maximised utilisation of berths and yards as well as increased number of vessels l Improved customer satisfaction through the one-stop-shop module for customer service provision and e-service through web applications and SMSs

nology. GMB will benefit by using GIS data in port business and prosperity.

Application of ICT It is essential for a modern port to put in place systems to minimise the burden of paperwork for port users, as delays originating from inefficiency in administrative procedures result in huge losses to shippers and shipping companies due to prolonged stay of ships at ports. It is interesting to note that the European Union has guidelines to promote ports’ investments in

electronic data interchange (EDI) systems. These systems are aimed at speeding up administrative paperwork and reducing waiting times for ships and subsequent land transport modes (trucks, railways).

In order to achieve accelerated cargo and container handling, it is important to improve not only infrastructure and equipment, but also the use of ICT. Better usage of ICT in port operations will ensure accurate and timely information on the status of all transactions, vessel activities, cargo operations and marine services.

September 2015 / Ports Summit Special Issue

27

IT IN PORTS

GUJARAT MARITIME BOARD

Integrating ICT with radar and automatic identification systems in vessel traffic management system would enable tracking of vessel movement in a better way and would improve the safety in vessel navigation.

Using these ICT applications, automatic berth plans could be obtained based on parameters like berth depth, vessel draft, cargo type, availability of cranes and vessel arrival time.The notification process linking these entities could also be automated, which would result in improved berth planning and berth utilisation.

mGovernance in POMS GMB has planned to use mGovernance in the POMS applications for an edge over eGovernance. The application shall be compatible with all the leading browsers available on Java, Android, Symbian, i-OS and Windows platforms-based mobile phones. Some of its features include:

28

Ports Summit Special Issue / September 2015

Key Benefits to GMB’s Stakeholders l Online document submission l Faster application and approval process l Online payments l Automated, system generated messages on permissions/ approvals l Better coordination among stakeholders, like shipping company, clearing agents, stevedores, customs, etc.

l Help port officers in granting permissions for ship berthing, no-dues certificates l Facilitate accounts officers in issuing bills (receivables and payables) l The application shall be inter-operable with other government applications as mentioned in MSDG guidelines l The solution shall have one-web approach, which means making, as far as possible, the same information and services available to users, irrespective of the device or the browser being used.

All government websites should be compatible with mobile devices so as to enable users to access the same information /services as they would, through computers.

The mobile application offered by the OEM shall be compliant with the mobile governance guidelines (framework for mobile governance) issued by the Government of India.

APM TERMINALS

TERMINAL OPERATOR

Govt Needs to Play Facilitator The Government needs to intervene to address the issue of poor connectivity at most of the ports in association with private players, says Pradip Kumar Agrawal, Chief Executive Office, APM Terminals, in an interview with Rachita Jha of Elets News Network (ENN)

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ow does a coastal state make the best of its maritime advantage to benefit the state’s economy?

Coastal infrastructure is an asset for any state and it needs a co-ordination from various departments to work as an organisation that facilitates port-led development. In this context, we have to highlight the importance of ports. However, in addition to that we need to create and facilitate logistics infrastructure that will make it competitive globally. If infrastruc-

ture is good, the cost of transaction goes down and ease of doing business happens. In the past, wherever the port industries have developed, adjoining townships and state’s economy have benefitted from sea trade.

That speaks volumes on how vital ports are for development of the port cities, and that’s why, the concepts of port based townships, port-based industries and port-based SEZ have come up.

These bring global companies in these areas and these facilitate connectivity both internationally and locally.

With both public and private companies keen to provide connectivity via rail and roads, connectivity will certain get a boost. And, hence, all these connected activities are planned to strengthen the port-based industries, along with ports.

What is the key recommendation to strengthen ease of doing business in ports and terminals sector?

The Government of India and many of the maritime states are working towards a single-window clearance system. To start a port in India, one needs to conform to numerous clearances and coordinate with authorities at multiple levels. This is where the role of the government can start single-window clearance system, and that is one of the major reasons why Gujarat has attracted business in many ways.

What are your views on Maharashtra as a port-led development destination?

Maharashtra is already ahead of many other states, as it has two major ports, Jawaharlal Nehru Port Trust (JNPT), which is controlling 55 per cent of the country’s container traffic, and Mumbai Port Trust (MPT), which also handles bulk traffic and has the potential to do more. This speaks volume of the opportunity that lies at the heart of port-led development in the State. The recent partnership on Dahanu Port is an example on the way forward for the State and will open up new vistas of profits for the State’s economy.

What are your views on the Sagarmala Project?

The vision of the programme is to have maritime clusters surrounding the port where they want to have the entire infrastructure built, and these areas around the ports can then support industry and the trade, alongside the port. At the same time, we have to realise that there is large chunk of area that does not have the coastline and is dependent on ports. So, one cannot ignore the hinterland and these should also be considered, along with the coastal ports, to have an end-to-end connectivity for cargo from the time it arrives the port till the time it reaches its destination. The overall planning should be at a macro level where the programme also plans for industrial hubs around ports. These will also facilitate availability of land and minimise labour cost for the port developer. So, port townships will work in reality and benefit not just the promoter but also the city, its citizens with better quality of life and the State with better economic productivity.

September 2015 / Ports Summit Special Issue

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STATES

ANDHRA PRADESH

India’s Gateway to the World The Andhra Pradesh Government, which has port-led development as one of its top agenda for economic development of the State, is making every possible move to realise the vision at the earliest. Secretary, Department of Energy, Infrastructure and Investment, Ajay Jain, in an interaction with Sudheer Goutham of Elets News Network (ENN)

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hat are the natural advantages of coastline of Andhra Pradesh, which holds the potential to turn it into the most preferred gateway of India?

Andhra Pradesh has its natural advantages and can dig into this resource and build a competitive logistics hub. As one of the United Nations Public Administration Network (UNPAN) study pointed out, “Andhra Pradesh’s central location within India, its strong transportation links with other parts of the country and the access it provides into India, make it a suitable location for a distribution and logistics hub.”

Andhra Pradesh has the second longest coastline in India, covering a length of over 974km stretching between Srikakulam and Nellore with deep raft coastal waters. Its network of 14 notified non-major ports and one major port provides strong potential for the State to become India’s gateway to the world, especially the Asian and South East Asian region.

Can you elaborate on certain unique advantages of the Andhra Pradesh’s coastline that it banks on?

Andhra Pradesh has the unique advantage of having three deep draft ports, Visakhapatnam, Gangavaram and Krishnapatnam, which is a critical enabler for attracting bulk cargo from East and South East Asian economies. Such straight lane, deeper coastal line will allow ships with bigger vessels. The deepest port is at Gangavaram that is 19-21 meters. To reap the potential benefits and position of Andhra

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Ports Summit Special Issue / September 2015

Pradesh as India’s Gateway to the World, the Government is integrating the development of ports, industrial clusters and, inter-land and efficient evacuation systems through road, rail, inland and coastal waterways under the Sagarmala Project of the Government of India. The project is aimed at making ports as the drivers of economic activity in the coastal areas. The

ANDHRA PRADESH

STATES

first phase of the project includes development of stretch comprising Visakhapatnam–Kakinada–Gangavaram–Krishnapatnam.

How many ports on AP’s costal lines are operational, under development and identified?

With a target to handle cargo of over 1,000 MT throughout the year, we aim at 16 ports to be operational. Out of which, six are currently operational, seven under development and three identified. With this, Andhra Pradesh would develop into a hub for shipbuilding and repairs endowed with a strong industrial base.

Coupled with natural endowments of mineral reserves, it has enough potential for a portled development. Recently, bids were called for the development of Bhavanapadu Port in Srikakulam.

What are the recent steps that Andhra Pradesh has taken and would take that the State Government hopes would steer revenue generation and employment opportunities?

One of the major steps the State Government has taken is slashing the marine fuel price by reducing the VAT from 22 per cent to 4 per cent. This would lead to more vessels anchoring at the AP coastal line and doubling the revenue in the next two to three years. Gujarat and Maharashtra maritime are top two highest handlers of cargo, while AP stands third. With these initiatives, we hope to take the second

Andhra Pradesh would develop into a hub for shipbuilding and repairs endowed with a strong industrial base.

Coupled with natural endowments of mineral reserves, it has enough potential for a port-led development position by next year pushing cargo handling beyond 160 million tonnes (MT), which is Maharashtra’s current handling capacity. By 2019, we target to handle cargo up to 250 MT, and 500 MT by 2025.

What is the status of AP Martime Board Bill that Chief Minister Chandrababu Naidu hinted would be the driver for development of the State and when do you think the State Maritime Board will come into being?

A draft bill of AP Maritime Board will most likely be tabled in this assembly session and will be passed within six months. Setting up the AP Maritime Board will bring all State ports under this organisation as well as future developments, so that there is a focussed approach as was seen with the success of the Gujarat Maritime Board (GMB), which has been very successful in developing minor ports as well as shipping related activities in their state.

What are the other port-related development in terms of inter-

land connectivity and evacuation of cargo? Also, tell us about private partnership in these developments.

We are coming up with three multi-modal logistic parks at Kirshnapatnam, Vishakapatnam and Kakinda. This would bring a great change and help systematic handling of materials. Also, the Government is contemplating to launch 139 mega projects with an investment of $207 billion in the next five years.

It has also decided to develop the 1,078km Buckingham Canal connecting Kakinada with Puducherry, identified as Inland Waterway 4, to facilitate passenger as well as freight traffic.

In the Union Budget, Optical Fibre Grid had been sanctioned for the State as a pilot project.

The Government would set up Optical Fibre Development Corporation soon. Visakhapatnam would be developed into a gateway port.

In addition, the Asian Development Bank had promised to fund $600 million in the first phase of the Visakhapatnam-Chennai Industrial Corridor. The Government would mobilise more investments with another proposal to develop the Chennai-Bengaluru Industrial Corridor.

September 2015 / Ports Summit Special Issue

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PORT SECTOR

JSW INFRASTRUCTURE LTD

The Best is Yet to Come Capt BVJK Sharma, Joint MD & CEO, JSW Infrastructure Ltd, shares his insights on the port-led development in India, with Poulami Chakroborty of Elets News Network (ENN)

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ow has the port sector progressed in the past few years?

The Indian port sector has gathered pace, along with the government’s focus on revival of the manufacturing sector through the ‘Make in India’ campaign. Under the dynamic leadership of Union Minister for Road Transport, Highway and Shipping, Nitin Gadkari, the Government has taken various policy initiatives to promote and boost the ports and shipping sector in India in the past one year, including formulation of the visionary Sagarmala Project and an ambitious target to convert 101 rivers across the nation into waterways. The port sector was awarded 30 projects in FY14, investing over Rs 20,000 crore (US $3.16 billion), which is a threefold increase over the preceding year. The non-major ports’ share jumped to 42.89 per cent in FY14 from 25.08 per cent in FY02, while major ports’ declined to 57.11 per cent (FY14) from 74.92 per cent (FY02).

What is your perspective on the Sagarmala Project? What will be its impact on the Indian port sector?

Sagarma l a wou ld le ad to p or t-b as e d industrialisation, urbanisation, coastal tourism and integration with hinterland hubs, which will have an overall impact on the economic development of the coastal regions.

According to you, what should be the top three priority areas of the government?

I feel the top three priority areas for the

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Ports Summit Special Issue / September 2015

government should be Capacity Augmentation; fast-tracking last-mile port connectivity, i.e.

Road, Rail, Pipeline and inland water transport projects for better evacuation of cargo; and integrating coastal shipping & inland waterway transport in the intermodal supply chain.

This will ensure an optimal modal mix for transporting cargo in and out of ports. The Government should also incentivise modal shift of cargo from road to rail and rail to waterways to reduce overall logistics costs.

Tell us about JSW Infrastructure and its vision.

JSW Infrastructure Ltd (JSWIL) is a part of the JSW group company, which is one of India’s leading private sector infrastructure companies, and is into development and operations of world class seaports, terminals, inland waterways, road-rail connectivity, townships and port-based SEZs. JSWIL has recently been awarded a terminal in the Paradip Port Trust in Odisha under buyown-transfer (BOT) basis through its special purpose vehicle (SPV) JSW Paradip Terminal Pvt Ltd (JSWPTPL). The terminal would be mechanised to handle bulk cargoes with a capacity of 18 MTPA. Through the brownfield and greenfield ventures, JSWIL aims to enhance its port capacities from present 33 MTPA to 200 MTPA by 2020.

What is the Jaigarh Port’s current capacity and expansion plans?

JSW Jaigarh Port is a greenfield multi-cargo

deep water port (20 meters) in Jaigarh near Ratnagiri in Maharashtra with a present cargo handling capacity of 15 MTPA. It has handled large Capesize Vessels (200,000 DWT) and is getting ready for a giant leap to handle 65 MTPA of cargo. It is now aiming for direct berthing of next generation vessels, i.e. largest Dry Bulk Carrier (Vale Max), LNG Carrier (Q Max), Container Vessel (EEE Series – 18,000 Teu’s) and Very Large Crude Carriers (340,000 MT) with active government support. I would say it’s a modern, mechanised, state-of-the-art port for economic growth of Maharashtra and north Karnataka region.

What is the sectoral outlook for the next few years?

The 12th Five Year Plan has estimated a total investment of `1,80,626 crore ($30.05 billion) in the ports sector. The manufacturing sector is likely to drive the growth of the ports sector.

It will gain momentum with the requisite impetus from Make in India call by Prime Minister Narendra Modi. Blue Revolution through Sagarmala project, implementation of GST, DMIC, DFC, e-C ommerce, digitalisation and use of modern technology and expectations of young India are all set to give a huge push to the port sector. Since a large part of India’s future infrastructure is still to be built, an integrated and coordinated approach is required in which the development of each transport mode is matched to the needs of the country and existing assets are optimally utilised.

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