PORTS January 2018 - IBEF Presentataion
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PORTS For updated information, please visit www.ibef.org January 2018
Table of Content Executive Summary……………….….…….3 Advantage India…………………..….……. 5 Market Overview ………..………………….7 Porters Five Forces Framework…………...16 Recent Trends and Strategies....………....17 Growth Drivers and Opportunities.....……..21 Case Studies……….……….......………..… 31 Key Industry Organisations……….………..35 Useful Information……….……….......…….37
EXECUTIVE SUMMARY
Increasing trade activities and private participation in port Total cargo capacity in India (MMT)
infrastructure set to support port infrastructure activity
3,000.0
In FY17, cargo capacity in India is estimated to have increased to
2,493.1 MMT from 1,806.8 MMT in FY15. The Maritime Agenda
2,493.1
2,000.0
1,806.8
2010-20 has a 2020 target of 3,130 MT of port capacity.
1,000.0
-
FY15 FY17 E
India has 12 major ports. Cargo capacity at major ports (MMT)
By FY17, cargo capacity at major ports grew to 1,065 MMT in FY17,
1500
from 965.36 in FY16 implying a CAGR of 10.32 per cent. As of
1358
December 2017, major ports had a capacity of 1,359 MMT. 1000
1065
965
500
0
FY16 FY17 FY18*
The average turnaround time of major ports improved to 3.44 days in Cargo traffic at major ports (MMT)
FY17 from 4.01 days in FY15
800
In FY17, 12 major ports in India handled 647.43 (Million Tonnes) of
cargo, showing a CAGR of 2.5 per cent during FY08-17. 600
647.43
606.37
400
499.41
In FY18*, major ports in India have handled 499.41 MMT of cargo
200
traffic.
0
FY16 FY17 FY18*
Notes: E – Estimates, MMT - Million Metric Tonnes, FY18* - till December 2017
Source: Ministry of Shipping
3 Ports For updated information, please visit www.ibef.org
EXECUTIVE SUMMARY
India’s 200 non-major ports are strategically located on the world’s Cargo capacity at non-major ports (MMT)
shipping routes
1500
During FY17 major and non-major ports handled total throughput of
around 1,133.09 Million Tonnes (MT), an increase of 5.7 per cent 1000
from FY16. 968
500 750
0
2016 2019 T
Trade to boost demand for containers Container traffic in India (‘000 TEU)
In FY18* container traffic in India (for major ports) increased 7.14 per
10
cent year-on-year to 6,770 TEUs.
8.2 8.4
5 6.8
0
FY16 FY17 FY18*
Infrastructural development to increase demand for iron and steel Iron ore traffic (million tonnes)
In FY18* iron ore traffic at major ports increased 1.36 per cent year-
60.00
on-year to 33.47 million tonnes.
40.00
42.54
33.47
20.00
15.35
0.00
FY16 FY17 FY18*
Notes: E – Estimates, TEU – Twenty Foot Equivalent Unit, MMT - Million Metric Tonnes,, T – target, * up to December 2017
Source: Ministry of Shipping
4 Ports For updated information, please visit www.ibef.orgIT and ITeS ADVANTAGE INDIA
ADVANTAGE INDIA
Traffic at major and non-major ports
Total investment in Indian ports by 2020 is
increased 5.7 per cent year-on-year in
expected to reach US$ 43.03 billion.
FY17.
Non-major ports are set to benefit from
During FY 2016-17, 12 major ports in India
strong growth in India’s external trade
handled 647.76 Million Tonnes of cargo,
showing a growth of 6.8 per cent in Special Economic Zones are being
comparison to the same time during developed in close proximity to several
previous year. In FY18* traffic at major ports – comprising coal-based power
ports has increased 3.64 per cent year- plants, steel plants and oil refineries
on-year
ADVANTAGE
INDIA
India has a coastline which is more than The government has initiated NMDP, an
7,517 km long, interspersed with more initiative to develop the maritime sector;
than 200 ports the planned outlay is US$ 11.8 billion
Most cargo ships that sail between East FDI of 100 per cent under the automatic
Asia and America, Europe and Africa pass route and a 10 year tax holiday for
through Indian territorial waters enterprises engaged in ports
India is the largest importer of thermal coal
Plans to create port capacity of around
in the world
3200 MMT to handle the expected traffic
of about 2500 MMT by 2020
Note: NMDP – National Maritime Development Programme, FDI – Foreign Direct Investment, MMT – Million Metric Tonnes, * up to December 2017
Source: Report of the Task force on Financing Plan for Ports, Government of India, Indian Ports Association, Ministry of Shipping
6 Ports For updated information, please visit www.ibef.orgIT and ITeS MARKET OVERVIEW
CATEGORIES OF PORTS IN INDIA
Ports in India (2016)
Major Non-major (minor)
There are 12 major ports in the India has about 200 non-major
country; 6 on the Eastern coast ports of which one-third are
and 6 on the Western coast operational
Major ports are under the Non-major ports come under the
jurisdiction of the Government of jurisdiction of the respective state
India and are governed by the Governments’ Maritime Boards
Major Port Trusts Act 1963, (GMB)
except Ennore port, which is
administered under the
Companies Act 1956
Source: Ministry of Shipping
8 Ports For updated information, please visit www.ibef.orgMAJOR PORTS IN INDIA
Kandla
Kolkata
Paradip
Mumbai
JNPT Visakhapatnam
Mormugao
New Mangalore Ennore
Chennai
Cochin
Note: JNPT – Jawaharlal Nehru Port Trust
9 Ports For updated information, please visit www.ibef.orgCARGO TRAFFIC IS ON THE RISE … (1/2)
Cargo traffic at major ports in India: Cargo traffic at major ports (MMT)
Stood at 647.76 MMT in FY17, growing at a CAGR of 2.5 per cent
from FY08-17. 700 CAGR 2.5%
In March 2017, 16 new cargo scanners were installed across major
647.43
ports in India. In the 1st phase, 5 of the 13 major ports i.e. Kamarajar 600
606.37
(Ennore), New Mangalore, JNPT, Kolkata and Vizag will receive the
581.3
569.8
561
560.1
scanners, which should be operational in the next six months.
555.3
546.6
530.4
500
519.2
In FY18* major ports have handled 499.41 million tonnes of traffic,
499.41
showing a year-on-year growth rate of 3.46 per cent.
400
300
200
100
0
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18*
Note: MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate, FY – Indian Financial Year (April–March), * up to December 2017
Source: Ministry of Shipping
10 Ports For updated information, please visit www.ibef.orgCARGO TRAFFIC IS ON THE RISE … (2/2)
Percentage share of ports Cargo traffic at non-major ports (MMT)
120%
600 CAGR 15.9%
100%
500
71.4% 28.6%
71.8% 28.2%
71.3% 28.7%
34.0%
35.6%
38.7%
41.6%
42.9%
44.8%
43.5%
42.8%
485.33
80%
471.2
466.1
400
417.1
387.9
60%
66%
64.4%
353
61.3%
300
58.4%
57.2%
57.1%
56.5%
55.2%
314.9
289.9
40%
200
213.2
203.6
20%
186.1
100
0%
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Major Ports Non-major Ports
Non-major ports are evolving faster than major ports: Cargo traffic at non-major ports –
Non-major ports are gaining shares and a major chunk of traffic Stood 485.33 MMT FY17.
has shifted from major ports to non-major ports. Cargo traffic has expanded at a CAGR of 10.7 per cent during
The contribution of non-major port’s traffic to total traffic rose to FY07–16.
42.8 per cent in FY17 from 28.6 per cent in FY07. Cargo traffic in 2017 at non-major ports is estimated to reach
815.2 MMT
Note: MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate, FY – Indian Financial Year (April–March), E – Estimated.
Source: Ministry of Shipping
11 Ports For updated information, please visit www.ibef.orgCARGO PROFILE AT MAJOR PORTS IN INDIA … (1/2)
Cargo at major ports in FY16 Cargo at major ports in FY181
Liquid (petroleum, oil Liquid (petroleum, oil
Solid Container Solid Container
and lubricants) and lubricants)
Share: 46.4% Share: 33.3% Share: 20.3% Share: 41.42% Share: 38.36% Share: 20.22%
Iron ore Share: 2.1% Iron ore Share: 16.06%
Coal Share: 22.7% Coal Share: 48.90%
Fertilizer Share: 2.6% Fertilizer Share: 5.67%
Other cargo Share: 18.9% Other cargo Share: 29.37%
Note: Other cargo includes Fertiliser Raw Material (dry) and food-grains; FY181 - Data from April 2017- September 2017
Source: Ministry of Shipping
12 Ports For updated information, please visit www.ibef.orgCARGO PROFILE AT MAJOR PORTS IN INDIA … (2/2)
Between FY07–17, cargo traffic grew at CAGR 3.4 per cent Cargo traffic at major ports (MMT)
Over FY07–16, CAGR in the volume of different segments was as
follows– 700.0
• Solid cargo was 2 per cent
124.6
• Liquid cargo was 3.1 per cent 600.0
123.2
119.4
114.1
•
101.2
120.1
Container cargo was 6 per cent
114.6
119.8
93.1
500.0
212.4
92.3
Cargo traffic during FY17 for solid, liquid and container cargo was
195.9
154.3 73.2
188.9
175.1
310.83, 212.36 and 124.58 MMT, respectively
179.1
187.2
179.1
176.1
400.0
168.7
185.9
During April – December 2017, traffic handled by major Indian ports
increased 3.64 per cent year-on-year.
300.0
310.8
287.4
284.7
276.6
273.0
261.2
260.9
258.2
253.5
239.9
235.9
200.0
100.0
0.0
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Solid Liquid Container
Note: E – estimate, Other cargo in Solid includes fertiliser raw material (dry) and food-grains;
Source: Ministry of Shipping; Indian Ports Association (IPA)
13 Ports For updated information, please visit www.ibef.orgINCREASE IN CAPACITY OVER THE YEARS
Capacity at major ports grew to 1,065 MMT in FY17, implying a
CAGR of 7.75 per cent since FY07. Capacity and utilisation at major ports (MMT)
Utilisation rates of major ports in India such as JNPT port, Kandla port,
Ennore port, etc., are much above the world’s average 1200 120.0%
In November 2016, 12 Major Ports were identified under Sagarmala
project, for cargo handling till 2035. The objective of this project is to
1065
1000 100.0%
promote port led development and to provide infrastructure to quickly
965.36
transport goods to and from ports, with higher efficiency and at lower
cost.
871.52
800 80.0%
800.52
Indian Port Rail Corporation Ltd. (IPRCL), plans to conduct rail
744.9
infrastructure expansion and modernisation work for JNPT, Kandla Port
689.8
670.1
and Haldia Dock Complex in April 2017. Similar works have already 600 60.0%
616.7
574.8
started for Kolkata, Vishakhapatnam, Tuticorin, Mangalore and Chennai
532.1
504.8
ports.
400 40.0%
Germany’s Deutsche Bahn Engineering and Consulting plans to form a
JV with Indian Port Rail Corp. Ltd (IPRCL) with an aim to connect Indian
ports with railways. Germany and India are working on projects worth 200 20.0%
US$14.87 billion being implemented by IPRCL.
In May 2017, the government of India laid the foundation stone for
various projects of the Kandla port. The construction of the Chabahar 0 0.0%
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
port will further encourage the growth of the Kandla port. The port has
been renamed as Deendayal Port Trust – Kandla.
Note: MMT – Million Metric Tonnes,
Source: Ministry of Shipping; Indian Ports Association (IPA),
14 Ports For updated information, please visit www.ibef.orgDROP IN TURNAROUND TIME
Average turnaround time is influenced by factors such as type of Average turnaround time for major ports (in days)
cargo, parcel size and entrance channel
The average turnaround time improved to 3.44 days in FY17 from 6
4.01 days in FY15
5 5.29
4.63 4.56
4 4.2 4.29
4 4.01
3.8 3.84
3.64
3.44
3
2
1
0
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Note: Turnaround time – Total time spent by a ship from entry into port until departure
Source: Ministry of Shipping, Indian Port Association
15 Ports For updated information, please visit www.ibef.orgPorter’s Five Force Framework Analysis
Threat of Substitutes
Low – With rising demand for port
infrastructure due to growing imports
(crude, coal) and containerisation, the
threat of substitute products to remain
weak
Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers
Medium – Considerable capacities to Low – Increasing trade activities Medium – Imports to continue to
be added going forward. However, brought by rising imports of remain strong led by strong demand.
demand to continue to remain strong commodities like coal and crude to However considerable port capacities
generate higher business and limit
to be added going forward
overall competition as most ports
handle specific geographies
Threat of New Entrants
Medium – 100 per cent FDI under
automatic route and income tax
Positive Impact
exemption (10 years) is attracting
Neutral Impact foreign players. However, higher
Negative Impact capital expenditure acts as a barrier
Source: PricewaterhouseCoopers, Techopak
16 Ports For updated information, please visit www.ibef.orgIT and ITeS RECENT TRENDS AND STRATEGIES
NOTABLE TRENDS
Strong growth potential, favourable investment climate and sops provided by state governments have encouraged
Increasing private
domestic and foreign private players to enter the Indian ports sector. In addition to the development of ports and
participation
terminals, the private sector has extensively participated in port logistics services
SEZs are being developed in close proximity to several ports, thereby providing strategic advantage to industries
within these zones. Plants being set up include –
Setting up of port- • Coal-based power plants to take advantage of imported coal
based SEZs
• Steel plants and edible oil refineries
Development of SEZs in Mundra, Krishnapatnam, Rewas and few others is underway.
All the greenfield ports are being developed at shores with natural deep drafts and the existing ports are investing on
improving their draft depth.
Focus on draft
depth Higher draft depth is required to accommodate large sized vessels. Due to the cost and time advantage associated
with the large sized vehicles, much of the traffic is shifting to large vessels from smaller ones, especially in coal
transportation
Government of India is targeting to make the country the first in the world to operate all 12 major domestic government
Ports to operate on
ports on renewable energy. The government plans to install almost 200 MW wind and solar power generation capacity
Green energy
by 2019 at the ports. The energy capacity could be ramped up to 500 MW in future years.
Note: SEZ – Special Economic Zone, PPP – Public-Private Partnership
Source: Ministry of Shipping
18 Ports For updated information, please visit www.ibef.orgNOTABLE TRENDS
Terminalisation: Focus on terminals that deal with a particular type of cargo
Specialist terminal- This is useful for handling specific cargo such as LNG that requires specific equipment and hence high capital costs.
based ports Forming specialist terminals for such cargo result in optimal use of resources and increased efficiencies
Examples of specialist terminals: ICTT in Cochin, LNG terminal in Dahej Port
The Haldia Port of West Bengal was rated as the cleanest port among all the major ports in the 1st ever ranking by the
Sanitation Ministry of Shipping. The ranking of major 13 Indian ports was conducted by the Quality Council of India (QCI) during
the 'Swachhta Pakhwada’.
To promote private investments, the government has reformed the organisational model of seaports –
• From: A ‘service port’ model where the port authority offers all the services
‘Landlord port’
model • To: A ‘landlord port’ model where the port authority acts as a regulator and landlord while port operations are
carried out by private companies
Major ports following ‘landlord port’ model: JNPT, Chennai, Visakhapatnam and Tuticorin
Rising traffic at non With the increasing private participation in establishing minor ports. Cargo traffic handled by the minor ports are
major ports outpacing cargo traffic at major ports.
Coastal Economic The Government of India is planning to build 14 CEZs in the country to boost manufacturing and jobs. In November
Zones 2017, the first mega CEZ at the Jawaharlal Nehru Port in Maharashtra has been cleared .
Note: ICTT – International Container Transshipment Terminal, LNG – Liquefied Natural Gas, MMT – Million Metric Tonnes
Source: Aranca Research
19 Ports For updated information, please visit www.ibef.orgSTRATEGIES ADOPTED
Adani group, largest private port operator in India, is now venturing into providing allied services like dredging. Its
Allied activities
dredgers which were being used only at its own ports in the past have now started taking work from other ports.
Container train Adani group has also ventured into the container railway business becoming the largest private link in the country. It
operations conducts operations on a pan-India basis operating 6 container rakes.
Port authorities are modernising and upgrading port facilities to meet the needs of the port users in competitive
Modernising
environment
After having a strong advantage on India’s West coast, Adani Ports and Special Economic Zone Ltd (APSEZ) is
looking to strengthen its position by winning the bid of a new container terminal at Ennore port located on the east
coast. Furthermore Adani Ports has acquired Dharma Port to replicate its development and growth on the eastern
coast
Pan-India presence
Essar Ports Ltd as a part of it strategic move to increase its potential on the east coast has won the contract for the
modernisation of 3 ports at Visakhapatnam
Essar Ports Ltd., a leading port operator, plans to build a port in Gujarat with investments worth US$1.49 billion. For
the same, the company has signed a MoU with Gujarat Maritime Board (GMB)
Geographic diversification as in the case of Adani group acquiring coal mines (Australia and Indonesia) and setting up
coal terminal in Australia to take the benefit of increasing coal imports in India
Geographic
diversification As of April 2017, Adani Ports is planning to expand and open a multi purpose port on Carey Island in Malaysia, as an
extension of the Port Klang. A MoU was signed between APSEZ and MMC Port Holdings Sdn Bhd, a wholly-owned
unit of MMC Corporation Berhad
Source: Company website
20 Ports For updated information, please visit www.ibef.orgIT and ITeS GROWTH DRIVERS AND OPPORTUNITIES
SECTOR BENEFITS FROM STRONG DEMAND,
PRIVATE PARTICIPATION
Policy support Growing demand Innovation Increasing investments
National Maritime
Development Expanding port Increasing
Increasing trade
Programme and development and investments in
activities resulting in
National Maritime distribution facilities building ports and
container traffic
Agenda in India related activities
Inviting Driving Resulting
Rising demand for FDI of up to 100 per Private equity
cent under the Use of modern
coal and other supporting private
automatic route technology
commodities port developers
Various sops and
Growing crude Providing support to Increasing
incentives for private
imports by the global projects from investments by
players to build ports
country India foreign players
22 Ports For updated information, please visit www.ibef.orgINDIA’S PORTS ARE BENEFITTING FROM STRONG
GROWTH IN EXTERNAL TRADE
India’s total external trade* grew to US$ 655 billion in FY17, implying India’s external trade flows (US$ billion)
a CAGR of 3.72 per cent done since FY09
600
Ports handle almost 95 per cent of trade volumes; thus rising trade CAGR 3.72%
500
has contributed significantly to cargo traffic.
491
489
400
450
448
Increasing trade is translating into higher demand for containerisation
381
380
370
300
due to their efficiency.
314
310
306
304
300
288
275
262
200
250
During FY07–17, container traffic rose to 124.58 MMT, implying a
185
179
100
CAGR of 5.9 per cent.
0
During FY17, container traffic stood at 124.58 MMT.
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Indian ports are expected to witness a profit of Rs 7,000 crore (US$ Exports Imports
1.08 billion) in 2018.
Container traffic at major ports (MMT)
140
120
124.58
123.2
120.1
119.8
119.4
114.6
114.1
100
101.2
93.1
80
92.3
73.4
60
40
20
0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Notes: MMT – Million Metric Tonnes, merchandise trade
Source: Ministry of Commerce, Indian Ports Association
23 Ports For updated information, please visit www.ibef.orgPORTS TO BENEFIT FROM GROWING CRUDE
IMPORTS
A consequence of strong GDP growth has been rising energy Crude imports (MMT)
demand; the country currently meets about 75 per cent of total crude
oil demand by imports. 250
India’s crude imports touched 214.89 MMT in FY17, implying a 200
214.89
202.85
CAGR of 6.7 per cent over FY07–17.
189.44
189.24
184.8
171.73
150
163.6
159.26
Private ports have been especially good at attracting crude import
132.78
121.67
traffic. 100
111.5
POL have been the major contributors to total traffic at ports and 50
contributed 33.3 per cent in FY16.
0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
POL traffic at both major and non-major ports added up to 376.84
MMT in FY16, implying a CAGR of 5 per cent over FY07–15.
POL traffic in FY17 reached 349.75 MMT.
POL traffic (MMT)
400 CAGR 5%
350
180.9
169.8
168.6
191.5
167.3
300
156.3
145.4
175.1 137.7
97.8
250
168.7 91.0
154.3 81.2
200
195.9
150
187.2
185.9
181.0
179.1
179.1
176.1
158.3
100
50
0 FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
2
FY17
Major Ports Non-major Ports
Notes: MMT – Million Metric Tonnes POL – Petroleum, Oil, and Lubricants, 2 - Figures from April – December 2016
Source: Handbook of Indian Statistics (RBI), Petroleum Planning and Analysis Cell, Ministry of Shipping
24 Ports For updated information, please visit www.ibef.orgINCREASING COAL IMPORTS SET TO DRIVE RISING
CARGO TRAFFIC
India is the largest importer of thermal coal in the world and this is Coal imports (MMT)
expected to grow due to increased demand for power.
With growing demand for power, coal imports reached to be 190.95 250 CAGR 15.57%
Mte in FY17.
200
217.78
203.95
A major chunk of this import is transported by sea
192.5
190.95
150
168.5
160.9
Increasing coal imports are set to drive coal cargo traffic upwards at
132.2
100
both major and non-major ports
83.5
50
Coal cargo traffic has grown at a CAGR of 15.5 per cent over FY07–
60
16 to reach 270.3 MMT. 0
Total coal handled by India’s 12 major ports reached 117.64 million
tonnes in FY17.
Thermal coal imports through the ports leaped 13.3 per cent to 98.7 Coal cargo traffic (MMT)
million tonnes, while shipments of coking coal, used in making steel,
reached to 27.35 million tonnes 300 CAGR 15.5%
In FY16, the coal traffic by minor ports reached 144.23 MMT 250
158.7
144.2
200
126.3
41.3
109.3
150
21.5
15.4
14.0
FY12 78.8 79.0
FY11 72.7 58.5
100
126.0
118.7
117.6
0
FY14 104.1
FY13 86.6
50
FY10 71.7
FY09 70.4
FY08 64.9
0 FY0759.9
FY15
FY16
FY17*
Major Ports Non-major Ports
Note: MMT – Million Metric Tonnes, *Data for non-major ports is not available for FY17
Source: Ministry of Coal, Ministry of Shipping
25 Ports For updated information, please visit www.ibef.orgNATIONAL MARITIME AGENDA 2010–2020
Increasing capacity To create a port capacity of around 3,200 MT to handle the expected traffic of about 2,500 MT by 2020
Proposed investments in major ports by 2020 are expected to total US$ 18.6 billion, while those in non-major ports
Increasing
would be US$ 28.5 billion. The government is also working to float a specialised Maritime Finance Corporation with
investments
the equity of ports and financial institutions to fund the Port projects
World-class To implement full mechanisation of cargo handling and movement at ports, thereby bringing Indian ports on par with
infrastructure the best international ports in terms of performance and capacity
Major ports have been working towards implementing ‘Landlord port‘ concept duly limiting their role to maintenance of
Landlord ports channels and basic infrastructure leaving the development, operation, management, of terminal and cargo handling
facilities to the private sector
To develop 2 major ports (1 each on East and West coast) to promote trade as well as 2 hub ports (1 each on the
Strategically West coast and the East coast) – Mumbai (JNPT), Kochi, Chennai and Visakhapatnam
building ports Master plans for 142 capacity expansion projects worth Rs 91,434 crore (US$ 14.19 billion) have been prepared by
the Government of India under the Sagarmala programme.
Bringing ports To establish a port regulator for all ports in order to set, monitor and regulate service levels, technical and
under regulator performance standards
Source: Ministry of Shipping
26 Ports For updated information, please visit www.ibef.orgFAVOURABLE POLICIES ASSISTING THE PRIVATE
SECTOR
The government has allowed FDI of up to 100 per cent under the automatic route for projects related to the
De-licensing and construction and maintenance of ports and harbours
tax holidays A 10-year tax holiday to enterprises engaged in the business of developing, maintaining, and operating ports, inland
waterways and inland ports
Private ports enjoy price flexibility, as the government allows non-major ports to determine their own tariffs in
Price flexibility consultation with the State Maritime Boards; at major ports, tariffs are regulated by the Tariff Authority for Major Ports
(TAMP)
An MCA has been finalised to bring transparency and uniformity to contractual agreements that major ports would
enter into with selected bidders for projects under the Build, Operate and Transfer (BOT) model
Model Concession As on September 2016, the Ministry of Shipping proposed a new model concession agreement (MCA) to attract more
Agreement (MCA) private sector investments in the development of port infrastructure across the country.
In January 2018, amendments to MCA were approved by the Government of India to make port projects more investor
friendly.
Major Port Primary focus of the scheme is to allow future public-private partnership operators to fix tariffs. With the
Authorities Act, implementation of this policy, port authorities will get the power to lease land for port-related use for up to 40 years and
2016 for non-port related use up to 20 years
The system for security clearance for ports being streamline and made faster
Favourable system Expansion of existing framework to attract participation from the private sector for development of infrastructure
facilities such as dredging, road infrastructure, creation of SEZ and development of integrated parking zones in the
port area
Note: FDI – Foreign Direct Investment
Source: Ministry of Shipping
27 Ports For updated information, please visit www.ibef.orgSTRONG PRIVATE SECTOR PARTICIPATION IN
PORTS PROJECTS … (1/2)
Greenfield projects
Private investment
Private terminals
39 Public Private Partnership (PPP) projects are operational at a cost of around US$ 2219.4 million and capacity of 240.72 Million Tonnes Per
Annum (MTPA). 32 PPP projects at an estimated cost of around US$ 3917.6 Million and capacity 264.77 Million Tonnes Per Annum (MTPA)
awarded and are under implementation.
144 business agreements with investments worth US$ 12.88 billion were signed at Maritime India Summit 2016.
In September 2016, the National Green Tribunal has given nod for construction of multi-crore ‘Vizhinjam International Seaport Ltd (VISL)’. The
port is being developed by Adani Group in collaboration with Kerala Government.
Two mega port projects in Colachel in Tamil Nadu and Dahanu in Maharashtra with an initial investment of US$ 2.3 billion has been introduced
and are being awaited for approval under PPP model in FY16.
The Central Government is planning to setup logistic hubs near seaports with the help of private sector players, to augment exports from the
country.
In January 2017, a new container service, operated by K Line, commenced operations between CITPL (Chennai International Container
Terminals Pvt. Ltd) at Chennai port and the Far East.
In May 2017, DP World has agreed to develop Indian port projects and plans to sign an MoU with the National Investment and Infrastructure Fund
(NIIF), the Indian wealth fund. The projects worth US$ 1.3 billion include the development of Sagarmala and Bharatmala projects.
Note: PPP – Public Private Partnership
Source: Ministry of Shipping
28 Ports For updated information, please visit www.ibef.orgSTRONG PRIVATE SECTOR PARTICIPATION IN
PORTS PROJECTS … (2/2)
Terminals in major ports
Estimated cost
with private sector Port agency Key private sector companies Ports they developed
(US$ million)
involvement
Container terminal, Ennore Ennore 293.1 Maersk JNPT (Mumbai)
LNG terminal, Cochin Cochin Port Trust 729.1
PandO Ports JNPT, (Mumbai and Chennai)
Container terminal, NSICT JNPT 156.3
Oil jetty related facilities Dubai Ports International (Cochin and Vishakhapatnam)
Kandla Port Trust 156.3
(Vadinar)
PSA Singapore Tuticorin
Third container terminal
JNPT 187.5
(Mumbai) Adani Mundra
Crude oil handling facility
Cochin Port Trust 146.5 Maersk Pipavav
(Cochin)
ICTT at Vallarpadam Navyuga Engineering Company Ltd Krishnapatnam
Cochin Port Trust 262.9
(Cochin)
Construction of SPM DVS Raju group Gangavaram
Paradip Port Trust 104.2
captive berth (Paradip)
JSW Jaigarh
Development of second
container terminal Chennai Port Trust 103.1
(Chennai) Marg Karaikal
Note: NSICT – Nhava Sheva International Container Terminal, Mumbai, ICTT – International Container Transshipment Terminal, SPM – Single Point Mooring
Source: Indian Ports Association
29 Ports For updated information, please visit www.ibef.orgOPPORTUNITIES
Increasing Scope for Private Ports Ship repair facilities at ports Port support services
With rising demand for port Dry docks are necessary to provide Operation and maintenance services
infrastructure due to growing imports ship repair facilities. Out of all major such as pilotage, dredging, harbouring
(crude, coal) and containerisation, ports, Kolkata has 5 dry docks, Mumbai and provision of marine assets such as
public ports (major ports) will fall short and Visakhapatnam have 2; the rest barges and dredgers are expected to
of meeting demand have 1 or no dock at all increase in coming years
This provides private ports with an Given the positive outlook for cargo Increasing investments and cargo traffic
opportunity to serve the spill-off demand traffic and the resulting increase in point to a healthy outlook for port
from major ports and increase their number of vessels visiting ports, support services
capacities in line with forecasted new demand for ship repair services will go
These include Operation and
demand. up. This will provide opportunities to
Maintenance (OandM) services like
build new dry docks and setup ancillary
Cochin Port Trust (CPT) announced pilotage, harbouring and provision of
repair facilities.
measures to increase its revenue by marine assets like barges and dredgers.
generating higher container traffic and
JNPT in Navi Mumbai signed an
increasing the number of passenger
agreement with Development Bank of
liners. CPT is also planning to setup a
Singapore and State Bank of India, for
small industrial port at the southern end
external commercial borrowing worth
of Willingdon Island to boost business.
US$ 400 million for expansion of road
network connecting the port.
Note: OandM – Operations and Maintenance
Source: Ministry of Shipping
30 Ports For updated information, please visit www.ibef.orgIT and ITeS CASE STUDIES
MUNDRA: THE LARGEST PRIVATE PORT IN INDIA
Mundra Port and Special Economic Zone Ltd was renamed as Adani Net sales (US$ million)
Ports and Special Economic Zone Ltd
It is the largest private port in India in terms of volume 1400
• Net Sales (FY16): US$ 1213.1 million
• Operating profit (FY16): US$ 710.5 million 1200
1213.1
The port handled 113.72 MMT of cargo during FY17.
1000
Has the world’s largest fully mechanised coal terminal with a
1020.6
capacity of 60 MTPA
800
Handles the 2nd highest container traffic in India
801.2
During FY08–16, total revenue rose to US$ 1213.1 million, implying
658.6
600
a CAGR of 25 per cent
575.4
Adani Group plans to convert the Dhamra Port, in Odisha, into
400
439.5
country's biggest seaport with industrial park, and set up LNG and
LPG terminals there by 2021.
300.7
255.7
Dhamra Port is expected to have 35 berths having 315 million tonnes 200
202.9
capacity.
0
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
Source: Ministry of Shipping
32 Ports For updated information, please visit www.ibef.orgJNPT: MAJOR PORT WITH THE LARGEST CONTAINER
CAPACITY
Jawaharlal Nehru Port Trust (JNPT) has the 3rd highest cargo traffic
and the highest container traffic in the country Cargo profile of JNPT (FY17)
Total traffic handled at JNPT for FY17 was 62.15 million tonnes and
48.89 million tonnes during April – December 2017.
It is a container-focused port and having container traffic of 54.53 million
tonnes in FY17
1.4%
Handled 4.5 million TEUs of containers by the year FY17
Distribution of JNPT’s container traffic for FY16 across its various
terminals was a s follows : 10.9%
• Jawaharlal Nehru Port Container Terminal (JNPCT): 1.53 million
TEUs Container
• Nhava Sheva International Container Terminal (NSICT): 0.73 million Liquid
TEUs Others
• APM Terminals: 1.79 million TEUs
JNPT was developed to relieve the pressure of Mumbai port and was 87.7%
commissioned in 1989
It serves most of North India and has good hinterland connectivity
through road and rail networks
JNPT, with a capacity of 4.5 million TEU, handles over 58 per cent of
India’s container traffic
JNPT is a pioneer in involving private sector participation in major ports
and operates under a landlord model; NSCIT is the 1st private terminal
in the country
Note: TEU – Twenty-Foot Equivalent Unit, MMT – Million Metric Tonnes, MTPA – Million Tonnes Per Annum
Source: Ministry of Shipping, JNPT’s website, Indian Ports Association
33 Ports For updated information, please visit www.ibef.orgGUJARAT: PORT HUB OF INDIA
Gujarat is endowed with 1,215 kilo meters of coastline i.e. 1/6th of Cargo handled at major and non-major ports of Gujarat (MMT)
total Indian coastline
The state has 42 ports of which 41 are non major, while Kandla is the 400
350
sole major port 300
340
336
310
250
288
During FY07–16, cargo traffic in Gujarat increased at a CAGR of 10.17
259
200
80.97
231
per cent, with the cargo volume handled reaching 420 MMT in FY11.
206
150
153
151
100
131
100
Favourable policies of the Gujarat government helped the state in
72
80
82
83
94
87
92
50
65
53
gaining private investors interest in port related activities 0
1
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
Kandla port handled 499.68 million tonnes of cargo traffic, during April
2016 to January 2017. Overall India’s cargo traffic increased by 7.14 per
Major Ports Minor Ports
cent.
In FY17, Gujarat Maritime Board (GMB) handled 345.73 MMT of cargo,
Greenfield ports Developer
with its capacity reaching 501 MMT in the same year.
With seven ports under construction and 5 proposed ports, Gujarat has Port of Pipavav GMB and Gujarat Pipavav Port Ltd
the highest number of privately operated greenfield ports in India
Mundra Port Gujarat Adani Port Ltd
In October 2016, Ministry of Shipping has sanctioned Capital Dredging
Project for Ro Pax Ferry Services between Gogha and Dahej, in Gulf of Dahej Port Petronet LNG Ltd and GMB
Cambay in Gujarat. The total project cost is US$ 35.75 million, of which
50 per cent will be funded by Centre Government under the Sagarmala Hazira Port Shell Gas B.V.
programme
In November 2016, Ministry of Shipping sanctioned sum of US$ 1.49
million to Gujarat Maritime Board for capacity building and safety training
of workers involved in ship recycling activities under Sagarmala
Note: 1 – Data from April –December 2016
Source: Ministry of Shipping
34 Ports For updated information, please visit www.ibef.orgIT and ITeS KEY INDUSTRY ORGANISATIONS
INDUSTRY ORGANISATIONS
Indian Ports Association (IPA) Indian Private Ports and Terminals Association
Address: 1st floor, South Tower, NBCC Place Address: Darabshaw House, Level-1, N.M. Marg,
Bhishma Pitamah Marg, Lodi Road Ballard Estate, Mumbai 400 001, India
New Delhi – 110 003 Tel. No: 022-22610599
Phone: 91-11-24369061, 24369063, 24368334 Fax. No: 022-22621405
Fax: 91-11-24365866 Email: secretary@ippta.org.in
E-mail: ipa@nic.in, ipadel@nda.vsnl.net.in
36 Ports For updated information, please visit www.ibef.orgIT and ITeS USEFUL INFORMATION
NOTES
Major and non-major ports do not have a strict association with traffic volumes. The classification has more of an administrative significance
Cargo traffic includes both loading (export) and unloading (imports) of goods
Containerisation is the increased use of container for transporting non-bulk goods. It leads to increased efficiency (both time and money)
Turnaround time is the total time spent by a ship from entry into port till departure
Twenty Equivalent Units (TEU) is a standard measure of containers which are 20 feet in length and 8 feet in width; the height can vary
Draft is the vertical distance between waterline and the bottom of the ship. It determines the depth of water a ship or boat can safely navigate.
Higher capacity ships will need higher draft, hence ports with higher natural draft will attract bigger ships
Waterfront availability is the length of the water line on the coast where ships can rest and the goods are unloaded. Longer waterfront lengths
reduce waiting time and help raise capacity
Terminals are certain sections of the ports where different types of cargo are unloaded
Single Point Mooring (SPM) is a loading buoy anchored offshore that serves as a mooring point and interconnect for tankers loading or offloading
gas or fluid product
A dry dock is a narrow basin that can be flooded to allow a ship to be floated in, then drained to allow that ship to come to rest on a dry platform.
Dry docks are used for construction, maintenance and repair of ships
38 Ports For updated information, please visit www.ibef.orgGLOSSARY
FY: Indian Financial Year (April to March) – So FY11 implies April 2010 to March 2011
US$ : US Dollar
FDI: Foreign Direct Investment
IPA: Indian Ports Association
NMDP: National Maritime Development Programme
POL: Petroleum, Oil and Lubricants
SEZ: Special Economic Zone
CAGR: Compounded Annual Growth Rate
ICTT: International Container Transshipment Terminal
TEU: Twenty-Foot Equivalent Unit
MMTPA: Million Metric Tonnes Per Annum
MMT: Million Metric Tonnes
GOI: Government of India
NSICT: Nhava Sheva International Container Terminal, Mumbai
OandM: Operation and Maintenance services
LNG: Liquefied Natural Gas
Wherever applicable, numbers have been rounded off to the nearest whole number
39 Ports For updated information, please visit www.ibef.orgEXCHANGE RATES
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year INR INR Equivalent of one US$ Year INR Equivalent of one US$
2004–05 44.81 2005 43.98
2005–06 44.14
2006 45.18
2006–07 45.14
2007 41.34
2007–08 40.27
2008–09 46.14 2008 43.62
2009–10 47.42 2009 48.42
2010–11 45.62
2010 45.72
2011–12 46.88
2011 46.85
2012–13 54.31
2013–14 60.28 2012 53.46
2014-15 61.06 2013 58.44
2015-16 65.46 2014 61.03
2016-17 67.09
2015 64.15
Q1 2017-18 64.46
2016 67.21
Q2 2017-18 64.29
Q3 2017-18 64.74 2017 65.12
Source: Reserve bank of India, Average for the year
40 Ports For updated information, please visit www.ibef.orgDISCLAIMER
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with
IBEF.
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wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or
incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of
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This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the
information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a
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Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do
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