Description
Ports in India.
KeyWords: Types of Ports, National Maritime Development Programme (NMDP), Indian Ports Act, Major Port Trust Act, Tariff Authority for Major Ports (TAMP), Jawaharlal Nehru Port Trust (JNPT)
PORTS
AGENDA
• • • • • • Introduction Port Performance Regulations Regulatory Structure Privatization Pricing
INTRODUCTION • Definition : Single organizational units with multi-dimensional
activities integrated within the logistics chain for providing services to maritime trade.
• India has 12 major ports and 187 minor ports along 7,517 km long Indian coastline.
• Ports classified as major and minor ports(derived from legal enactments). However, these definitions can be misleading.
INFRA-STRUCTURE AT PORTS
Marine Excess Infrastructure
Channels, approximation zones Sea Defense(breakwaters, locks) Signaling(lights, mooring buoys)
Port Superstructure services
Port conservancy Pilotage & Towing Services Navigational aids
Port Infrastructure Berths, docks, basins Internal connections(roads etc.) Storage Yards Port Authority/Port Operator Stevedoring/Bunkering Cargo Equipment & Transport Services Transport Operators
Cargo Infrastructure Cranes, Cargo Terminals
Terminal/Port Service Operators Crane operators, cargo handling
Land Access Infrastructure Roads, railways, inland waterways
Railway, Road and Inland transportation - operators Railway & Road connections Inland cargo terminals(Kolkata port)
Classification
• Major Ports 1. Placed in union list of Indian Constitution 2. Governed under the Major Port Trust Act, 1963 by the Government of India 3. Administered by a Board of Trustees • Minor Ports 1. Placed in concurrent list of Indian Constitution 2. Administered under the Indian Ports Act, 1908 by State governments or by State Maritime Boards
Contd…
TYPES OF PORTS Small Local Ports Large Local Ports
?Cater to local cargo requirements, passenger ferrying and fishing operations. ?Low capital investment. ?As captive jetties. ?Eg: Porbander, Machalipatinam ?Relatively higher cargo throughput facilities. ?Not necessarily heavy investment owing to cargo traffic limitation. ?Catering primary to immediate hinterland. ?Eg: Mormugao, Paradip, Haldia
Large Regional Ports
?Aggregation point for cargos beyond its immediate hinterland. ?Cargo aggregation and re-distribution on a regional basis. ?Eg: Chennai, Mumbai, Vizag
Transhipment ports
?Leading ports of the world with state of the art infrastructure. ?Essentially act as cargo processing centres. ?Highly competitive rates. ?Eg: Singapore, Rotterdam
INDIA PORTS
Hinterland
INDIAN PORT PERFROMANCE 2007 - 08
Commodity-wise traffic
70 60 50 40 30 20 10 0
Vi sh ak ha pa tn a m en na Ch i M um ba i JN PT a Ha Ne w M an lo re M or m ug ao Tu tic or in Co ch in Ko lka ta En no re ga ip ra d Pa ld i la Ka nd
Cargo Traffic
C arg o traffic at ports in 2008 (In million tonnes )
Port Limitations
Rail Connectivity: Challenges & Initiatives
• Rail network crippled by capacity constraints to meet rising demand of cargo transportation, especially container cargo traffic. • Between JNPT & Delhi, freight trains have operational speed of 35kmph & expected to go up at 75/100 kmph when freight corridor is ready.
• For projected 21mn TEU container traffic by 2015-16, at 30% movement by rail, & 90 TEU/train, over 190 trains would be need to run/day.
• Currently, 40 trains are running/day, over 25 of which are on JNPT – Tughlakabad corridor.
•
http://www.businessworld.in/index.php/Economy-and-Banking/Speech-of-Lalu-Prasad-Yadav.html
National Maritime Development Programme(NMDP)
• Launched in 2005, aims at increased private participation and increased capacity and efficiency in the port sector. • Includes port in Inland Waterway Transport(IWT) projects. • Estimated overall major-port capacity of 1000MT in 2012. • It envisages investment of INR 1000bn. Over 20 years. • Investment of INR 554bn in major ports by 2012 and a total of 360 projects identified for the same. • Largest investments are for Mumbai JNPT, Cochin, New Mangalore, Kolkata. • Also included Sethu-samundram project to dredge a navigational channel between India & Sri-Lanka.
Expected Traffic at Indian Ports
Port Regulations- A Timeline
• 1908- Indian Ports Act
• 1948- Dock Workers (Regulation and Employment) Act
• 1958- Merchant Shipping Act • 1963- Major Ports Trust Act
• 1981-Gujarat Maritime Board (first ever state level maritime authority)
• 1986- Environmental Protection Act • 1996- TAMP (Tariff Authority for Major Ports)
• 1997- Maritime State Development Council
• 2005- NMDP (National Maritime Development Policy)
Indian Ports Act
• Chief Conservator Of Ports under Ministry of Shipping. • Distribution of power between union and states. • Government retains the basic power and responsibility of ports • Safeguarding of public interests rests with the centre.
Major Port Trust Act
• Definition of term Major Ports. • Creation of individual port trusts for each major ports. • Transfer of all asset and liabilities to various port trusts. • Creation of a separate general account under each major port trust for recording all port-related revenue and expenditure transactions and independent statement of port account to be submitted to the Central government and subject to scrutiny of Comptroller and Auditor General (CAG) of India. • Powers and authority of port trusts to raise, borrow or invest resources including the task of budgetary estimation and planning, publication of audit reports and maintenance of reserve funds.
Tarrif Authority for Major Ports-TAMP
• By amendment of MPT act in 1997. • Independent regulation of fixation of various tariffs set by different port trusts. • Pricing is cost based which takes into account operating costs incurred by port operator for providing services as well as the operators cost of capital • The port specifies a cap for tariffs. A terminal operator may charge tariffs lower than this. • TAMP is only an authority for fixing tariffs and has no other regulatory function. Regulation of a major port is vested to the respective port trust.
Regulatory Structure
Issues with current regulatory framework
• Lack of autonomy for port trusts.
• Lack of commercial orientation.
• Delay in decision making.
• Excess of Personnel • Excess of Bureaucracy
Need for Regulatory Reforms
• Leveraging Fresh Investment • Providing for institutional safeguards • Improving Efficiency and Reducing Costs • There should be an incentive to more competition amongst the Major Ports • Delegation of powers and responsibilities; • Autonomy in tariff setting and investing; • Fast decision making process;
Port Reforms
• Liberalization
• Commercialization- delegation of powers and responsibilities to ports.
• Corporatization- Ennore is the only corporatized port in India
• Privatization
Contd..
• RAMP-Regulatory Authority for Major Ports • Setting up of National Maritime Regulatory Authority based on a fresh enactment of common standard maritime law. DG of shipping, DG of Light
Ships and Light Houses and TAMP etc would be brought under a single
umbrella of legislation
PRIVATISATION
• Multiplicity of activities within the ports sector • A synergistic combination of multiple industries, with dynamics . commercial, financial, and regulatory, quite distinct and independent of each other. • Towage, Pilotage, Wharfage, Stevedoring, Container Terminals, Dredging • This gives rise to a range of options for private sector involvement in owning of port assets and port operations, implying different possible approaches to privatisation of the sector
Port Organization & Administration Structure
• Public port authority owns, maintains and operates all port assets (both fixed and mobile) and cargo handling is done by labour employed directly under the port authority
• Several of infrastructure facilities is leased to private operating companies like oil refineries, chemical plants or private port operators.
• Port authority does rent out • Considered an extreme form of port reform and its equipment and facilities to suggests that State no private parties, who are also longer any meaningful role allowed to set up specific of pursuing public interest facilities and services, which in the ports Sector the port authority does not • Self Regulatory wish to operate on its own.
...Contd
Privatisation Initiatives in the Indian Ports Sector
• Economic liberalization and globalisation process started in India since early nineties • The history of private sector participation in the Indian port infrastructure sector is thus, actually less than 15 years old • Among the significant international players that have been involved in the Indian ports sector include P&O Ports (Australia), Port of Singapore (PSA), Dubai Port Authority, Maersk Logistics along with domestic companies • The first-ever concession agreement in the Indian port sector was awarded to P&O Ports (Australia) on 30-year Build-Operate-Transfer (BOT) basis for the development and operation of Nhava Sheva International Container Terminal (NSICT)
Greenfield port projects developed in Public Private Partnership
• Two major port projects, which would qualify as greenfield multi-purpose port projects, have been developed in Gujarat as Public Private Partnership . Gujarat Pipavav Port and Gujarat Adani Port • To effect these partnerships, joint sector companies were incorporated with majority ownership by the private sector participant, and minority shareholding by the state Government through Gujarat Maritime Board • Mundra and Pipavav includes development of the port on a comprehensive basis. This includes marine infrastructure, port infrastructure and port superstructure.
• Greenfield projects involve greater project risk. While privatisation of a terminal in an existing port, traffic risk is less
Privatisation of other terminals including captive jetties
• Although container terminal privatisation occupies the limelight currently, privatisation of other terminals in major and minor ports has also been quite extensive.
• Most of these terminals are captive jetties.
• Captive jetties are usually associated with coast based plants, and have helped in substantial reduction in logistics costs.
Privatisation of Various Port Related Services / Assets
• Management Contract / Equipment Leasing • Stevedoring Operations • Dredging Operations • Towage Operations • Pilotage Operations • Ship-repair Facilities
Port Financing
• Since independence till 1980s, the development of port sector was almost exclusively in the hands of the Central Government • Infrastructure, including ports, was considered as a public good • Political consideration, which led to development of atleast one port in each littoral state. • Large investment requirements, long gestation periods, underdevelopment of the private sector • A higher EIRR is seen as adequate basis to fund the infrastructure project though the actual financial internal rate of returns (FIRR) may be relatively lower.
Tariff Regulation in Port Sector
Role of TAMP
• Tariff Caps for all major ports • The government, which wholly controlled the port sector all along, had been basing its own tariff policy on cost plus formula, with individual port trusts merely acting as administrative extensions of the government for tariff administration • TAMP’s implicit mandate was to also essentially facilitate market transition to PPP through discretionary rulings on tariff related issues based on detailed hearings of the representations made to it by the port operators both public and private
• The government also needs to review the basic methodology followed by TAMP in determination of tariff based on “cost plus” method, which is unacceptable to the private port developers and operators, who would rather favour marketdetermined tariff rates
Port Income and Expenditure
Cost-based Pricing
• Pricing is cost-based, which takes into account operating costs incurred by port operator for providing services as well as the operator’s cost of capital
• This system is followed by all major ports in India, where tariffs are set by a Central Government body - Tariff Authority for Major Ports (TAMP)
Market Pricing
• Market-based pricing is essentially the practice of correlating the port tariffs to demand-supply dynamics of port services market. • Pricing strategy in this instance is primarily aimed maximizing the returns on investment by optimizing the utilization of various port facilities. • Market-based pricing strategy is focused on maximizing the returns on investment through constantly increasing the volume of traffic handled and contributing other value added features to their services. • Many of the private ports are already using this approach for fixing tariffs and have been able to substantially increase their share of the cargo handled.
JNPT Port Case Study
• The JNPT Port Planning and Development Department carefully prepared an extensive final bid document in consultation with the MoST and other ministers. The port issued a global tender for a new container terminal on .Build, Operate, Transfer. basis for thirty years in December 1995.
• The bid document was on sale from December 26, 1995, to February 15, 1996 and specified the qualifying criteria for responding to the bid invitation.
Details of the Bid
• As per the bid, the licensee would construct, manage, operate and maintain a new state of the art two-berth container terminal at JNPT subject • This included constructing a 600-meter long quay and developing a new container yard measuring 20 hectares all of which was to be reclaimed form the sea • The ownership of all the land, reclaimed sea and water area in the licensed premises would always remain with JNPT • On the expiration of the stipulated license period, all the civil engineering structures, all equipments, machinery, ancillaries, etc., would be handed over to JNPT • The licensee would also invest in certain minimum container handling equipments such as quay cranes, gantry cranes, etc. • The licensee was required to make necessary arrangements for warehousing facilities for the new terminal either through another agency or by developing its own freight station. The port had set aside twenty hectares of land for this purpose that could be leased by the licensee.
JNPT’s Regulatory Responsibilities
• • • • • • • • • • Scheduling entry and berthing of vessels Pilotage and towage Maintenance of entry draft of 10.7 m Provision and Maintenance of general port infrastructure not covered under the license Maintenance of the dredged draft alongside berths of 12.0 m tidal entry and 12.5 m tidal exit Waterside safety and safety of navigation. Coordinating and overseeing the dock side safety Supply of electrical power. Water supply to terminal and ships Monitoring of pollution in air and water and ensuring compliance of Environmental Protection Measures.
Pricing
• With regard to pricing the licensee would collect prescribed rates and charges not exceeding the minimum rates published in the JNPT Port Tariff Schedule and Scale of Rates as approved by the Government of India • The licensee would bill the users of the container terminal for services, including terminal charges, container handling and cargo related charges
Pricing..
• The bid document also specified a gross average productivity of quay cranes of not less than 20 moves per hour per crane every month • The financial bids were sealed and deposited in the safe custody of State Bank of India, to be opened only after the technical proposals were fully evaluated. • As per the bid document JNPT invited the consortium led by P&O Ports Australia Pvt. Ltd.
Pricing..
Reasons for Success
• The better performance of the NSICT is due to superior productivity parameters. • NSICT is a modern, hi-tech, state of the art facility in the region. • It uses the newest and latest technology for all its equipments to ensure faster, quicker and more efficient handling of cargo. • NSICT is the first totally automated container terminal in India. • All the operations right from receiving the vessel bay plans to invoicing are computerized.
New MCA Model
• Encumbrance free land to concessionaire • Revenue share as only criteria for award • Traffic risk sharing • Indexation of tariff increase to Wholesale Price Index (WPI)
Road Ahead ?
• 86.6% of the investment in the minor ports is expected from the private sector (according to the Planning Commission).
• 66.3% for major ports under the 11th Five-Year Plan
• Greenfield ports worth INR500 billion being developed…
doc_628734686.pptx
Ports in India.
KeyWords: Types of Ports, National Maritime Development Programme (NMDP), Indian Ports Act, Major Port Trust Act, Tariff Authority for Major Ports (TAMP), Jawaharlal Nehru Port Trust (JNPT)
PORTS
AGENDA
• • • • • • Introduction Port Performance Regulations Regulatory Structure Privatization Pricing
INTRODUCTION • Definition : Single organizational units with multi-dimensional
activities integrated within the logistics chain for providing services to maritime trade.
• India has 12 major ports and 187 minor ports along 7,517 km long Indian coastline.
• Ports classified as major and minor ports(derived from legal enactments). However, these definitions can be misleading.
INFRA-STRUCTURE AT PORTS
Marine Excess Infrastructure
Channels, approximation zones Sea Defense(breakwaters, locks) Signaling(lights, mooring buoys)
Port Superstructure services
Port conservancy Pilotage & Towing Services Navigational aids
Port Infrastructure Berths, docks, basins Internal connections(roads etc.) Storage Yards Port Authority/Port Operator Stevedoring/Bunkering Cargo Equipment & Transport Services Transport Operators
Cargo Infrastructure Cranes, Cargo Terminals
Terminal/Port Service Operators Crane operators, cargo handling
Land Access Infrastructure Roads, railways, inland waterways
Railway, Road and Inland transportation - operators Railway & Road connections Inland cargo terminals(Kolkata port)
Classification
• Major Ports 1. Placed in union list of Indian Constitution 2. Governed under the Major Port Trust Act, 1963 by the Government of India 3. Administered by a Board of Trustees • Minor Ports 1. Placed in concurrent list of Indian Constitution 2. Administered under the Indian Ports Act, 1908 by State governments or by State Maritime Boards
Contd…
TYPES OF PORTS Small Local Ports Large Local Ports
?Cater to local cargo requirements, passenger ferrying and fishing operations. ?Low capital investment. ?As captive jetties. ?Eg: Porbander, Machalipatinam ?Relatively higher cargo throughput facilities. ?Not necessarily heavy investment owing to cargo traffic limitation. ?Catering primary to immediate hinterland. ?Eg: Mormugao, Paradip, Haldia
Large Regional Ports
?Aggregation point for cargos beyond its immediate hinterland. ?Cargo aggregation and re-distribution on a regional basis. ?Eg: Chennai, Mumbai, Vizag
Transhipment ports
?Leading ports of the world with state of the art infrastructure. ?Essentially act as cargo processing centres. ?Highly competitive rates. ?Eg: Singapore, Rotterdam
INDIA PORTS
Hinterland
INDIAN PORT PERFROMANCE 2007 - 08
Commodity-wise traffic
70 60 50 40 30 20 10 0
Vi sh ak ha pa tn a m en na Ch i M um ba i JN PT a Ha Ne w M an lo re M or m ug ao Tu tic or in Co ch in Ko lka ta En no re ga ip ra d Pa ld i la Ka nd
Cargo Traffic
C arg o traffic at ports in 2008 (In million tonnes )
Port Limitations
Rail Connectivity: Challenges & Initiatives
• Rail network crippled by capacity constraints to meet rising demand of cargo transportation, especially container cargo traffic. • Between JNPT & Delhi, freight trains have operational speed of 35kmph & expected to go up at 75/100 kmph when freight corridor is ready.
• For projected 21mn TEU container traffic by 2015-16, at 30% movement by rail, & 90 TEU/train, over 190 trains would be need to run/day.
• Currently, 40 trains are running/day, over 25 of which are on JNPT – Tughlakabad corridor.
•
http://www.businessworld.in/index.php/Economy-and-Banking/Speech-of-Lalu-Prasad-Yadav.html
National Maritime Development Programme(NMDP)
• Launched in 2005, aims at increased private participation and increased capacity and efficiency in the port sector. • Includes port in Inland Waterway Transport(IWT) projects. • Estimated overall major-port capacity of 1000MT in 2012. • It envisages investment of INR 1000bn. Over 20 years. • Investment of INR 554bn in major ports by 2012 and a total of 360 projects identified for the same. • Largest investments are for Mumbai JNPT, Cochin, New Mangalore, Kolkata. • Also included Sethu-samundram project to dredge a navigational channel between India & Sri-Lanka.
Expected Traffic at Indian Ports
Port Regulations- A Timeline
• 1908- Indian Ports Act
• 1948- Dock Workers (Regulation and Employment) Act
• 1958- Merchant Shipping Act • 1963- Major Ports Trust Act
• 1981-Gujarat Maritime Board (first ever state level maritime authority)
• 1986- Environmental Protection Act • 1996- TAMP (Tariff Authority for Major Ports)
• 1997- Maritime State Development Council
• 2005- NMDP (National Maritime Development Policy)
Indian Ports Act
• Chief Conservator Of Ports under Ministry of Shipping. • Distribution of power between union and states. • Government retains the basic power and responsibility of ports • Safeguarding of public interests rests with the centre.
Major Port Trust Act
• Definition of term Major Ports. • Creation of individual port trusts for each major ports. • Transfer of all asset and liabilities to various port trusts. • Creation of a separate general account under each major port trust for recording all port-related revenue and expenditure transactions and independent statement of port account to be submitted to the Central government and subject to scrutiny of Comptroller and Auditor General (CAG) of India. • Powers and authority of port trusts to raise, borrow or invest resources including the task of budgetary estimation and planning, publication of audit reports and maintenance of reserve funds.
Tarrif Authority for Major Ports-TAMP
• By amendment of MPT act in 1997. • Independent regulation of fixation of various tariffs set by different port trusts. • Pricing is cost based which takes into account operating costs incurred by port operator for providing services as well as the operators cost of capital • The port specifies a cap for tariffs. A terminal operator may charge tariffs lower than this. • TAMP is only an authority for fixing tariffs and has no other regulatory function. Regulation of a major port is vested to the respective port trust.
Regulatory Structure
Issues with current regulatory framework
• Lack of autonomy for port trusts.
• Lack of commercial orientation.
• Delay in decision making.
• Excess of Personnel • Excess of Bureaucracy
Need for Regulatory Reforms
• Leveraging Fresh Investment • Providing for institutional safeguards • Improving Efficiency and Reducing Costs • There should be an incentive to more competition amongst the Major Ports • Delegation of powers and responsibilities; • Autonomy in tariff setting and investing; • Fast decision making process;
Port Reforms
• Liberalization
• Commercialization- delegation of powers and responsibilities to ports.
• Corporatization- Ennore is the only corporatized port in India
• Privatization
Contd..
• RAMP-Regulatory Authority for Major Ports • Setting up of National Maritime Regulatory Authority based on a fresh enactment of common standard maritime law. DG of shipping, DG of Light
Ships and Light Houses and TAMP etc would be brought under a single
umbrella of legislation
PRIVATISATION
• Multiplicity of activities within the ports sector • A synergistic combination of multiple industries, with dynamics . commercial, financial, and regulatory, quite distinct and independent of each other. • Towage, Pilotage, Wharfage, Stevedoring, Container Terminals, Dredging • This gives rise to a range of options for private sector involvement in owning of port assets and port operations, implying different possible approaches to privatisation of the sector
Port Organization & Administration Structure
• Public port authority owns, maintains and operates all port assets (both fixed and mobile) and cargo handling is done by labour employed directly under the port authority
• Several of infrastructure facilities is leased to private operating companies like oil refineries, chemical plants or private port operators.
• Port authority does rent out • Considered an extreme form of port reform and its equipment and facilities to suggests that State no private parties, who are also longer any meaningful role allowed to set up specific of pursuing public interest facilities and services, which in the ports Sector the port authority does not • Self Regulatory wish to operate on its own.
...Contd
Privatisation Initiatives in the Indian Ports Sector
• Economic liberalization and globalisation process started in India since early nineties • The history of private sector participation in the Indian port infrastructure sector is thus, actually less than 15 years old • Among the significant international players that have been involved in the Indian ports sector include P&O Ports (Australia), Port of Singapore (PSA), Dubai Port Authority, Maersk Logistics along with domestic companies • The first-ever concession agreement in the Indian port sector was awarded to P&O Ports (Australia) on 30-year Build-Operate-Transfer (BOT) basis for the development and operation of Nhava Sheva International Container Terminal (NSICT)
Greenfield port projects developed in Public Private Partnership
• Two major port projects, which would qualify as greenfield multi-purpose port projects, have been developed in Gujarat as Public Private Partnership . Gujarat Pipavav Port and Gujarat Adani Port • To effect these partnerships, joint sector companies were incorporated with majority ownership by the private sector participant, and minority shareholding by the state Government through Gujarat Maritime Board • Mundra and Pipavav includes development of the port on a comprehensive basis. This includes marine infrastructure, port infrastructure and port superstructure.
• Greenfield projects involve greater project risk. While privatisation of a terminal in an existing port, traffic risk is less
Privatisation of other terminals including captive jetties
• Although container terminal privatisation occupies the limelight currently, privatisation of other terminals in major and minor ports has also been quite extensive.
• Most of these terminals are captive jetties.
• Captive jetties are usually associated with coast based plants, and have helped in substantial reduction in logistics costs.
Privatisation of Various Port Related Services / Assets
• Management Contract / Equipment Leasing • Stevedoring Operations • Dredging Operations • Towage Operations • Pilotage Operations • Ship-repair Facilities
Port Financing
• Since independence till 1980s, the development of port sector was almost exclusively in the hands of the Central Government • Infrastructure, including ports, was considered as a public good • Political consideration, which led to development of atleast one port in each littoral state. • Large investment requirements, long gestation periods, underdevelopment of the private sector • A higher EIRR is seen as adequate basis to fund the infrastructure project though the actual financial internal rate of returns (FIRR) may be relatively lower.
Tariff Regulation in Port Sector
Role of TAMP
• Tariff Caps for all major ports • The government, which wholly controlled the port sector all along, had been basing its own tariff policy on cost plus formula, with individual port trusts merely acting as administrative extensions of the government for tariff administration • TAMP’s implicit mandate was to also essentially facilitate market transition to PPP through discretionary rulings on tariff related issues based on detailed hearings of the representations made to it by the port operators both public and private
• The government also needs to review the basic methodology followed by TAMP in determination of tariff based on “cost plus” method, which is unacceptable to the private port developers and operators, who would rather favour marketdetermined tariff rates
Port Income and Expenditure
Cost-based Pricing
• Pricing is cost-based, which takes into account operating costs incurred by port operator for providing services as well as the operator’s cost of capital
• This system is followed by all major ports in India, where tariffs are set by a Central Government body - Tariff Authority for Major Ports (TAMP)
Market Pricing
• Market-based pricing is essentially the practice of correlating the port tariffs to demand-supply dynamics of port services market. • Pricing strategy in this instance is primarily aimed maximizing the returns on investment by optimizing the utilization of various port facilities. • Market-based pricing strategy is focused on maximizing the returns on investment through constantly increasing the volume of traffic handled and contributing other value added features to their services. • Many of the private ports are already using this approach for fixing tariffs and have been able to substantially increase their share of the cargo handled.
JNPT Port Case Study
• The JNPT Port Planning and Development Department carefully prepared an extensive final bid document in consultation with the MoST and other ministers. The port issued a global tender for a new container terminal on .Build, Operate, Transfer. basis for thirty years in December 1995.
• The bid document was on sale from December 26, 1995, to February 15, 1996 and specified the qualifying criteria for responding to the bid invitation.
Details of the Bid
• As per the bid, the licensee would construct, manage, operate and maintain a new state of the art two-berth container terminal at JNPT subject • This included constructing a 600-meter long quay and developing a new container yard measuring 20 hectares all of which was to be reclaimed form the sea • The ownership of all the land, reclaimed sea and water area in the licensed premises would always remain with JNPT • On the expiration of the stipulated license period, all the civil engineering structures, all equipments, machinery, ancillaries, etc., would be handed over to JNPT • The licensee would also invest in certain minimum container handling equipments such as quay cranes, gantry cranes, etc. • The licensee was required to make necessary arrangements for warehousing facilities for the new terminal either through another agency or by developing its own freight station. The port had set aside twenty hectares of land for this purpose that could be leased by the licensee.
JNPT’s Regulatory Responsibilities
• • • • • • • • • • Scheduling entry and berthing of vessels Pilotage and towage Maintenance of entry draft of 10.7 m Provision and Maintenance of general port infrastructure not covered under the license Maintenance of the dredged draft alongside berths of 12.0 m tidal entry and 12.5 m tidal exit Waterside safety and safety of navigation. Coordinating and overseeing the dock side safety Supply of electrical power. Water supply to terminal and ships Monitoring of pollution in air and water and ensuring compliance of Environmental Protection Measures.
Pricing
• With regard to pricing the licensee would collect prescribed rates and charges not exceeding the minimum rates published in the JNPT Port Tariff Schedule and Scale of Rates as approved by the Government of India • The licensee would bill the users of the container terminal for services, including terminal charges, container handling and cargo related charges
Pricing..
• The bid document also specified a gross average productivity of quay cranes of not less than 20 moves per hour per crane every month • The financial bids were sealed and deposited in the safe custody of State Bank of India, to be opened only after the technical proposals were fully evaluated. • As per the bid document JNPT invited the consortium led by P&O Ports Australia Pvt. Ltd.
Pricing..
Reasons for Success
• The better performance of the NSICT is due to superior productivity parameters. • NSICT is a modern, hi-tech, state of the art facility in the region. • It uses the newest and latest technology for all its equipments to ensure faster, quicker and more efficient handling of cargo. • NSICT is the first totally automated container terminal in India. • All the operations right from receiving the vessel bay plans to invoicing are computerized.
New MCA Model
• Encumbrance free land to concessionaire • Revenue share as only criteria for award • Traffic risk sharing • Indexation of tariff increase to Wholesale Price Index (WPI)
Road Ahead ?
• 86.6% of the investment in the minor ports is expected from the private sector (according to the Planning Commission).
• 66.3% for major ports under the 11th Five-Year Plan
• Greenfield ports worth INR500 billion being developed…
doc_628734686.pptx