‘JNPT hopeful of handling 10 million TEUs in next three years’

Pointing out that India is not even among the top 20 countries in terms of maritime profile,chairman-in-charge of Jawaharlal Nehru Port Trust (JNPT) N N Kumar says the PPP model will help achieve ambitious targets for the port sector,such as a capacity only 10 other ports across the world can boast

Written by Smita Nair | Published: September 2, 2013 12:52:48 am

Pointing out that India is not even among the top 20 countries in terms of maritime profile,chairman-in-charge of Jawaharlal Nehru Port Trust (JNPT) N N Kumar says the PPP model will help achieve ambitious targets for the port sector,such as a capacity only 10 other ports across the world can boast.

P VAIDYANATHAN IYER: How did JNPT decide to opt for PPP model?

Our total coastline is 7,500 km,so we are among the top five coastal countries. But if you see the maritime profile of India,we are not even among the top 20 (countries). JNPT is the biggest container port in the country and throughput is 4.2 million TEUs (twenty-foot equivalent units). Recently,the Centre drafted a new maritime agenda wherein combined port capacity of both major and non-major ports has been pegged at 32,000 metric tonnes as against 984 metric tonnes as of March 2013. JNPT is similarly working at 120 per cent capacity as against an installed capacity of 3.8 million. We thus decided to enter public-private-partnership (PPP) mode to add capacity. Our fourth container terminal project will increase capacity to 10 million TEUs.

P VAIDYANATHAN IYER: When is the procedure for the fourth container terminal expected to close?

There has been a delay from the past seven years owing to various issues. Now,the request for quotation (RFQ) has been issued. Nine parties have come forward. After that,I have to go for security clearance as well as the triple PSE for approval of the RFQ,so the process will take time. Our target is December-end or January 2014. I am hopeful that this time we will be able to allot it.

P VAIDYANATHAN IYER: What exactly is the change in the RFQ?

In the earlier RFQ,a liquid jetty,which is jointly being developed by us,BPCL and IOC,was a hindrance. The selected vendor had to create an equal matching facility,keeping the liquid jetty in mind. We have asked Central Water Power Research Station,which does the modeling for the terminals,if we could dredge 100 or 200 metres ahead to address this problem and make the project simpler. Secondly,the Tariff Authority for Major Ports (TAMP) was a major issue as it didn’t allow a level playing field. Non-major ports did not have any tariffs compared to major ports in government sector. With the new guidelines on TAMP,the vendor now knows he can fix his own price,so that makes this RFQ attractive.

GEORGE MATHEW: Why was PSA Singapore allowed to bid again if they were responsible for the delay?

PSA Singapore and ABG Ports had jointly won the previous bid,but we had delayed in offering them the letter of award by two months as we were not confident about ABG Ports. Our study showed ABG had created problems at Kandla,Kolkata,Tuticorin. Subsequently PSA wanted to remove ABG. The Board soon passed that PSA Singapore wants to remove ABG Ports and referred it to the ministry. Now the Model Concession Agreement,developed by Planning Commission,says that no one can deviate for a period of two years from the time the letter of award is granted. We took six months to reply to PSA Singapore,when all options failed. Meanwhile,PSA had revoked ABG Ports,made a new company and got Rs 70 crore of the guarantee forfeited. Last time,PSA Singapore had bid for 50 per cent,so the moment he walks in,other bidders are alert. If JNPT is going for a bidding,why will it remove competition? Apart from being a government company,their decisions are not easily influenced and they come with good experience. JNPT is not a commercial organisation,so we aren’t interested in knowing if 50 per cent is coming to me or 61 per cent. Our basic aim remains to maintain Mumbai as the ‘capital’ of India’s shipping industry,because now people are openly challenging that the shipping industry be shifted to Gujarat.

GEORGE MATHEW: What is the status of the liquid terminal?

JNPT is a container-focused port,with only 20 per cent involving liquid cargo. For my 80 per cent business of container trade,my pre-berthing delay is less than an hour,but because of liquid cargo,for overall port,pre-berthing delay is 14 hours. The turnaround for container cargo is 1.8 days,but the turnaround time for the entire port is 80 days. The wait for liquid cargo is 8-10 days. This incurred cost and posed a burden. While the opportunity is great,we realised we hadn’t focused much on the liquid terminal. We put our consultant to study and forecast the traffic,and the results say that for the next 20 years it is going to be good,even going up to 15 million tonnes. That is when we planned this liquid terminal to exploit the opportunity.

SMITA NAIR: How is the security at JNPT?

There is a security cover of 900 CISF personnel. Being a port and also close to Mumbai,JNPT is a target. We keep getting inputs every month these days. Recently,we invested Rs 100 crore for installing radioactive detection. As we are importing things in containers,there is a threat that inside a container,some bomb or radioactive material may be brought into the country. So,at all our gates,we have this system that detects even the smallest radioactive substance inside the container.

GEORGE MATHEW: Among the global ports,JNPT has lost out even in the top 30 container hubs. Your comments.

It’s not that my throughput is increasing every year,because in the past six years I have not added capacity. You can optimise existing capacity by adding new machines,but there is a limit to it as after a certain level,even with all optmisation,you want a certain addition. So for the first time in years,I have signed a concession agreement for a small project,to develop and build a standalone container handling facility at a new 330-metre berth,which will improve the capacity by 0.8 million TEUs. Overall,across India,the target for 2012-13 was to have 42 port projects of Rs 14,500 crore investment,adding 245 million tonne capacity. As against this,we have achieved 27 projects,Rs 6000 crore investment and 115 million tonne capacity. This year,the target is 30 projects,Rs 25,000 crore investments and 280 million tonne port capacity addition. I can speak for JNPT,with this 0.8 million and by December’s commissioning of additional 4.8 million TEUs,we are hopeful of handling 10 million TEUs in the next three years.

SMITA NAIR: What about infrastructure behind the water?

Railways take 25 per cent of our cargo,with roads balancing the rest. Compared to European countries,where they use all inland waters,railways and roads equally,ours is not a desirable situation. When we touch 10 million TEU figure,we will require at least 102 trains a day,which seems impossible. Two years ago,we had written to the government for a dedicated train facility from JNPT to New Delhi. It is here that the story of the dedicated freight corridor started. The Centre came with a plan,a Rs 32,000-crore project. In our opinion,it is the most ambitious project taken by Indian government after the Quadrilateral road project. The first phase (between New Delhi and Baroda) has been awarded. The second phase was delayed. The state has now become involved and are looking into problems in acquisition of 170 hectares. The corridor is expected to be complete by 2017 and then JNPT should be able to raise the ratio of rail to 40 per cent,and in a way,with the fourth container terminal should then become possible.

SHARVARI PATWA: What about the road network?

JNPT pushes 82 per cent of container cargo through roads,which means 6,000 containers clogging networks between the port and main highways daily. A Special Purpose Vehicle called JNPT Road Company with NHAI,CIDCO as partners has undertaken development of 443 km of highways connecting the port with the hinterlands. The four-lane road near the port also becomes more critical with the last mile connectivity to the new proposed airport at Navi Mumbai. We have now proposed 12-laning on a cost of Rs 1,800 crore. The only issue is as part of the road is coming near nine-km radius of the Karnala bird sanctuary,we need environmental clearance. The state Maharashtra government has also said the radius should be reduced to 1.5 km. We are again going to request the environment ministry to allow us to call the parallel RFQ so that by the time we or the state gets clearance,our ground work is ready. The target is to start the work by January so that it can be commissioned after monsoon.

(Transcribed by Smita Nair)

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