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With traffic is expected to manifold in coming years, India’s seaports are in dire need of expansion which will throw open new opportunities for private sector

Indian seaports offer huge opportunities with a long coastline of about 7517 km on the western and eastern shores of the mainland as well as along the islands situated in the Bay of Bengal, the Arabian Sea and the Indian Ocean. The country has got only 13 Major Ports (Port Blair has recently become India’s 13th Major Port) and about 200 Non-Major Ports. With country’s port traffic expected to cross one billion MT mark by end of 11th Plan (2007-2012), existing ports are in dire need of capacity addition. The projected traffic of Major Ports during 2011-12 is 615.70 MT, and a capacity of about 800 MT is required to meet this traffic.

Traditionally been a government-invested sector, the seaports today is one of the most underserved sectors in India waiting to be tapped by private players. The government has started to take up projects under the Public Private Partnership through its National Maritime Development Programme (NMDP).

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COMMENT   Sea ports are the backbone of economy,the country is blessed with coastal stretch of 7517 km. By this time we should hav   1 Comments Read more comments »

There are about 25 private/captive port projects which are in operation at the moment. These projects are spread over JNPT, Mormugao, Kandla, Visakhapatnam, Paradip, Chennai, Ennore, Kolkata and Cochin.

The government realised that there is the resource constraint in the public domain and it requires active private partnership (PPP) for the port building exercise. It has indentified 276 projects to take up under NMDP for implementation between 2005 and 2012, involving an investment of around Rs55,804 crore. However, it has managed to complete only 50 projects so far at the cost of Rs5717.28 crore.

A total of 74 projects worth of Rs16502.68 crore are under implementation at the moment. There are 16 projects worth of Rs3100.33 crore that have received approval but yet to be awarded. The government has also firmed up 29 projects but awaiting approval, costing Rs11561.39 crore. There are 82 projects worth of Rs19878.20 crore which are under preliminary planning stage whereas it has dropped 25 projects worth Rs5961.41 crore due to their non-viability.

On completion of NMDP, the government envisaged a capacity addition of 402.91 MT by 2011-12, and the overall capacity of major ports is expected to reach 800.41 MT.

With Rs55,804 crore envisaged for the ports, the government has decided to spend Rs3609 crore through its budgetary support and Rs13771.54 crore through the port’s internal resources. It expects Rs34505.34 crore to come from private sector and Rs3917.85 crore from other sources including investments by Ministry of Railways, NHAI, etc.

In an effort to make the sector more industry friendly, the Ministry of Shipping has already taken some measures. It has put in place an independent tariff regulator to take care of the interest of all the stake holders. A new Model Concession Agreement (MCA) has been approved by the Government which brings in several refinements and improvements over the earlier Model Licence Agreement of 2000.

The tariff setting mechanism has also been modified with tariffs being set upfront before the projects are bid out on a revenue sharing basis. New Model Bidding documents such as Request for Qualification and Request for Proposal have been approved by the Government. The government is also in the process of formulating a New Perspective Plan for the Maritime Sector up to 2010.