— S.S. Kulkarni,
Secretary General, Indian Private Ports and
Terminals Association
The Indian Private Ports
and Terminals Association
is an association of
private ports and terminal
operators of container and
bulk terminals at major
ports in India. IPPTA
addresses the need for a
strong representative body
of private players. While
India is moving towards
adequate port capacities,
much remains to be done
in infrastructure,
S.S. Kulkarni tells
Sandeep Menezes.
With huge capacity expansion in
the Indian port sector, how much
investment do you foresee in
this sector during the 12th Five-
Year Plan?
As per the statement of the shipping
minister, the government
intends to invest close to
73,800
crore to augment the major-port
capacity from the present 690 million
tonnes to 1,230 million tonnes
by end of the 12th Plan period as
well as to modernise the ports by
deepening the channels, upgrade
port equipment, and improve port
connectivity and backup facilities.
The nine coastal states have also
drawn up ambitious non-major
port development plans in their
respective states through private
participation of close
1.45 lakh
crore.
But keeping in mind the track
record of the past four to five years,
how much of it actually realises
remains to be seen.
What do you think is lacking in
current port infrastructure?
While we seem to be comfortably
moving towards adequate port
capacities, much remains to be
done with regard to the other
infrastructure viz. deep draft
channels of at least 15-16 metres,
port connectivity to the hinterland,
adequate storage space
within the port limits, and systems
and procedures for quick clearance
of cargoes. The productivity
and efficiency at Indian ports is
drastically affected because of
these factors.
Hinterland cargo should be
taken out or brought in swiftly
from and to the port itself. What we
see, instead, is a proliferation of
CFSs around the port area
because lack of adequate rail connectivity
with the port. Government
spending towards these
facilities is a must. Infra-funds
that provide long-term lending at
reasonable rates/tax-free bonds to
generate funds for infra-lending
and creation of SPVs with government
and railways as
partners/viability gap funding are
some of the measures that can be
thought of.
The share of non-major ports
increased from 7 per cent in
1990-91 to 36 per cent in 2010-11.
Going forward, how do you foresee
the scenario?
The non-major ports that have
come up or likely to come up in
near future are equipped with
most modern facilities. Most of
these are specialised ports and
offer quick turnaround times for
vessels/rail rakes and have dedicated
clientele. It is therefore likely
that in the years to come the
trade may start patronising the
non-major ports in a big way. It is
reckoned that the share of cargo
which is now in favour of major
ports may reverse to 40:60 in the
foreseeable future.
Dredging is a key issue which
needs to be tackled on a war footing
but requires major funding.
Do you feel PPP in dredging
should be explored?
Maintaining assured depths has
become a bane for ports due to siltation
on both the coasts. Maintenance
dredging is the need of the
hour. However, increasing the
depths to at least 15-17 metres is
also highly desirable to receive
larger vessels - 8,000+ TEUs for
containers and 1 lakh+ GT bulkers.
The trade can only then benefit
from the economies of scale.
India ports suffer due to high
vessel related charges (as high as
three to five times of neighbouring
ports) since the dredging costs get
added to it. The government
needs to devise a scheme to subsidise
the dredging requirements
of the ports. This would be in line
with the practice followed by
many countries where dredging is
sponsored by the government.
The need for creating a central
dredging authority, as enunciated
in the Maritime Agenda is utmost
essential. If necessary, viability
gap funding for dredging projects
may be considered, along with
private participation. Dredging
must be treated at par with "land
excavation" and be exempted
from the applicability of service
tax. The local dredging companies
including DCI lack in terms
of modern equipment and trained
personnel. These capabilities
must be developed through a
process of investing in latest technology
and training.
There are reports that private
port developers may get a part of
the funds raised through tax-free
bonds allocated for port sector.
Although there was such talk last
year, things have not moved forward
as yet. The finance minister,
though, has retained the provision
of tax-free bonds for the maritime
sector in this year's budget too.
Global firms want to participate
in port projects by bringing technology
and capital but it is important
to have a consistent and sustainable
policy framework that is
up to international standards.
A plethora of policies are on the
anvil. But the most watched are
the PRA Bill and the Draft Ports
Act. Other policies include the
land policy, captive port policy,
monopoly policy, coastal shipping
policy, shipping practices bill et al.
Investors, including global players,
are waiting and watching the
situation. Nobody wants to firm
up plans in a fluid atmosphere.