POSITION PAPER ON

THE PORTS SECTOR

IN INDIA

December 2009

Department of Economic Affairs Ministry of Finance Government of India

PORTS
1 EXISTING SCENARIO India has an extensive coastline of 7517 km, excluding the Andaman & Nicobar Islands. Indian ports handle around 95% of the total volume of countrys trade and about 70% in terms of value. India has 12 major ports and 200 non major ports (minor and intermediate ports) spread across nine (coastal) maritime states. Ports are under the concurrent list of the Indian Constitution. Major ports are under the jurisdiction of the Union Govt., managed by the Port Trust of India while minor ports are under the jurisdiction of the respective State Governments. While major ports handle 75% of the total cargo traffic, minor ports account for 25% of the traffic. Chart 1

The capacity of Major Ports has increased to 532.07 MTPA in 2007-08 (555.67 MTPA by 2008-09 provisional) and the traffic during the same period touched 519.3 Million Tonnes. This was 97.6 percent of the total capacity. Thus the Major Port capacity is already stretched to its limit.

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Table 1 Traffic Handled at Major Ports (Thousand Tonnes) Port 2005-06 2006-07 2007-08 2008-09 % Change over Target Actual(P) CP Target 1 2 3 4 5 6 7 8 53143 55050 57329 60280 54051 -5.7 -10.3 Kolkata 12596 13741 12280 12428 -9.6 1.2 Kolkata DS 10806 42454 43588 48000 41623 -4.6 -13.3 Haldia DC 42337 33109 38517 42438 55000 46412 9.4 -15.6 Paradip 55801 56385 64597 65000 63908 -1.1 -1.7 Vizag 9168 10714 11563 10550 11500 -0.5 9.0 Ennore 47248 53414 57154 64000 57491 0.6 -10.2 Chennai 17139 18001 21480 24060 22011 2.5 -8.5 Toticorin 13888 15257 15810 18960 15228 -3.7 -19.7 Cochin New 34451 32042 36019 40340 36691 1.9 -9.0 Mangalore 31688 34241 35128 40600 41681 18.7 2.7 Mormugao 44190 52364 57038 61030 51876 -9.1 -15.0 Mumbai 37836 44815 55838 63500 57295 2.6 -9.8 JNPT 45907 52982 64920 72770 72225 11.3 -0.7 Kandla 423568 463782 519314 576090 530369 2.1 -7.9 All Ports
(P): Provisional; CP: Corresponding period 2007-08, Source - Update on Inidan Port Sector, Ministry of Shipping

Lack of capacity Historically Indian Major Ports have suffered on account of low capacity creation. Chart 2 below shows how capacity and traffic almost touched each other over the years 1999 to 2005. As can be seen capacity constraints had eased marginally between years 2001-02 to years 2003-04. In year 2004-05 traffic again equals the capacity. Further Chart 3 below for the current years 2007-08 and 2008-09 shows that traffic almost matches the capacity created. Since there has been a consistent growth in cargo traffic further capacity creation to match demand in the coming years seems inevitable. Chart 2

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Chart 3

In terms of cargo composition, petroleum-oil-lubricants (POL) is the dominant commodity carried through major ports. It accounted for 32.54% of the total cargo in 2007-08. Container cargo was the next largest commodity in the mix, accounting for 17.73%, closely followed by iron ore at 17.72%. Table 2 Commodity wise Traffic Handled at Major Ports (Thousand Tonnes) 2008-09 Commodities 2005-06 2006-07 2007-08 Target Actual CP Target POL 142,094 153,548 1,688,299 188,010 174,384 3.3 -7.2 Iron Ore 79,217 80,584 91,993 91,210 94,091 2.3 3.2 Fertiliser 12,196 14,136 16,662 20,670 18,198 9.22 -12.0 1. Finished 6,624 7,929 10,612 11,970 12,130 14.3 1.3 2. Raw (DRY) 5,572 6,207 6,050 8,700 6,068 0.3 -30.3 Thermal Coal 37,545 37,309 39,580 49,000 43,444 9.8 -11.3 Coking Coal 31,282 23,042 25,159 29,200 27,150 7.9 -7.0 Container (Tonnes) 62,009 73,469 92,283 106,690 93,123 0.9 -12.7 Others 59,225 81,694 84,808 91,310 79,979 -5.7 -12.4 Total 423,568 463,782 519,314 576,090 530,369 2.1 -7.99 (P) : Provisional; CP : Corresponding period-2007-08 Source - Update on Inidan Port Sector, Ministry of Shipping

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Chart 4 below provides the Cargo Wise Annual Traffic Projection for the period 200910 Chart 4

(Source Ministry of Shipping) Chart 5 provides Commodity Wise Capacity Growth of Major Ports over 2003-04 to 2008-09

The productivity of ports in terms of Average Ship Turn Around (ASTA) and Average Ship Berth Output (ASBO) has improved in recent years. The ASTA has decreased from 8.1 days in 1990-91 to 3.9 days in 2007-08. However this is far behind the global standard which seriously undermines the competitiveness of Indian Ports. The average ASBO increased from 9745 tonnes in 2006-07 to 10,076 tonnes in 2007-08. The pre-berthing detention, which showed substantial improvement and reduced to 11.17 hours in 2007-08 as compared to 11.5 hours during the last year of the Ninth Plan, Page | 5

slipped down slightly in the last two years of the Tenth Plan (but was still better than the Ninth Plan performance). Among the ports, improvement has been noticed in Paradeep, Chennai, Tuticorn, Ennore and New Mangalore. Table 2
Efficiency performance of major ports during 2004-09 Year Average pre-berthing time on port account (hours) 6.03 8.77 10.05 11.40 9.59 Average turnaround time (days) 3.41 3.50 3.62 3.93 3.85 Average output per ship berth-day (tonnes) 9,298 9,267 9,745 9,851 NA

2004-05 2005-06 2006-07 2007-08 2008-09

NA: Not Available Sources: Indian Ports Association and Economic Survey 2008-09

Table 3
A verage Pre-berthing waiting time on port account (hours) 0.00 27.82 5.47 8.88 1.00 1.46 7.83 21.12 22.60 23.22 5.52 3.60 0.91 11.17 A verage turnaround time (days)

Port Kolkata Dock System Haldia Dock Complex Mumbai JNPT Chennai Cochin Visakhapatnam Kandla Mormugao Paradip New Mangalore Tuticorin Ennore A ll Major Ports

4.51 4.24 4.30 1.79 3.80 2.08 4.08 4.62 3.74 6.04 3.69 3.57 2.08 3.79

Source: Economic Survey, 2007-08

A comparative statement showing the average dwell time1 of Indian Major Ports and International Ports like Rotterdam and Singapore is listed in the Table below: Table 4
1

Dwell time is the total time for the ship to turn around and can also be called Turn around Time. Turn Around Time = Pre Berthing Detention time + Transit Time + Non Working Time (CI)+ Working Time + Idle Time (C2) + Non working time (C3). Refer Annexure II for definitions

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(in Days)
Cargo Type Major Indian Ports Import Dry Bulk Break Bulk Container 38 15 1.88 Export 27 17 3.78 Import 14-30 60 4 Export 14-30 60 3 Import **0.85 **0.60 Export **0.85 **0.60 **0.8
+

Rotterdam*

Singapore

Jurong

Import 2

Export **0.9 **0.8

+

* Dwell Time here is not a constraint

** Transshipment

Local Day

(Report on Dwell Time of cargo in the Major Port by Ministry of Shipping)

Top 20 World Major Ports (In Million Tonnes) compared with two leading Major Ports in India Port 2005 2006 2007 2008 Shanghai (PRC) 443.2 537.5 560.0 582.0 Zhoushan/Ningbo* (PRC) 272.4 309.7 473.4 520.1 Singapore 423.2 448.5 483.6 515.3 Rotterdam (Netherlands) 370.3 381.8 409.1 421.1 Tianjin (PRC) 245.1 257.6 309.6 355.9 Guangzhou (PRC) 241.7 302.8 343.3 344.3 Qingdao (PRC) 184.3 224.2 265 300.3 Hong Kong (PRC) 230.1 238.2 245.4 259.4 Qinhuangdao (PRC) 167.5 204.9 245.7 252.2 Busan (South Korea) 217.2 217.9 243.6 241.7 South Louisiana (USA) 243.0 262.9 258.1 233.7 Nagoya (Japan) 187.1 208.0 215.6 218.1 Shenzen (PRC) 153.9 176.0 199.9 211.2 Gwangyang (S Korea) 177.5 195.1 198.2 200.0 Antwerp (Belgium) 160.1 167.4 182.9 189.5 Dalian (PRC) 176.8 145.2 165.4 185.2 Los Angles (USA) 162.1 181.6 190.1 170.0 Chiba (Japan) 165.7 167.0 169.2 170.0 Rizhao (PRC) 84.2 110.1 130.6 151.0 Source: Port Statistics, Port of Rotterdam Authority, May 2009; PRC-peoples Republic of China

Cargo traffic at Indian ports during 2004-09 (million tonnes) 2004-05 Major Ports Growth (%) 383.75 11.29 2005-06 423.58 10.388 2006-07 463.78 9.49 2007-08 519.23 11.96 2008-09 530.35 2.14 Page | 7

% share Non-major ports Growth (%) Total Growth (%) * Provisional figures

73.57 137.83 14.06 521..58 12.01

74.43 145.53 5.59 569.11 9.11

71.36 186.12 27.89 649.90 14.20

71.83 203.62 9.40 722.85 11.22

71.85 207.78* 2.04 738.13* 2.11

Sources: Indian Ports Association and India Infrastructure Research

It is observed that the dwell times for containers at Major Ports container terminals are comparable with the International Ports. At Port of Rotterdam, the port is a component of the industrial complex similar to the Special Economic Zones (SEZ) in India. In such ports, the dwell time is not a matter of concern. Non-Major Ports In the tenth plan the traffic at non-major ports has increased at an annual average growth of 13% but slackened to 6.5% in 2007-08 and 2% to 2008-09. Non major ports handled more than a quarter of the total maritime traffic in the year 2008-09. The growth which was 6.5% IN 2007-08 decelerated to 2% in 2008-09. The growing importance of non major ports in handling cargo has helped in alleviating the congestion at major ports. Four maritime States, viz, Gujarat, Maharashtra, Goa & Andhra Pradesh together accounted for 96% of total cargo traffic handled by the non-major ports in 2008-09.

POLICY FRAMEWORK The ports sector in India is divided into Major Ports and Non-Major Ports which are under the jurisdiction of Central Government and State Governments respectively. The legal framework governing the sector comprises the Indian Ports Act of 1908 and the Major Port Trusts Act of 1963. Major Ports under Central jurisdiction are governed by policy and directives of Ministry of Shipping of Government of India. Minor Ports under States jurisdiction and governed by policy and directives of respective State Governments nodal departments/ agencies.

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Tariff Authority for Major Ports (TAMP) has been constituted for regulating tariffs in major ports and its functioning/role is being revised to ensure uniform and transparent norms relating to fixing tariffs as well as prescribing quality of service for port authorities/terminal operators. The Ministry of Shipping, Road Transport and Highways (MOSRTH) has recently formulated a comprehensive National Maritime Development Programme (NMDP), which envisages various port capacity improvements and hinterland connectivity projects across the 12 major ports over a ten-year time frame. As part of the NMDP, MOSRTH has mandated that each of the twelve major ports should develop a business plan that: States a long-term vision for the port that builds on its core strengths; Establishes the goals to be achieved over the next seven years to satisfy this vision; Describes the strategy to be followed to achieve these goals; Provides a detailed plan of action to implement the strategy; and Identifies sources of financing for all proposed investments. The business plan has also to provide the foundation for an annual planning process in order to be able to adjust it regularly to changing circumstances. Implementation of the plan is to be financed by private sector participation and internal Port Trust financial resources. A high level committee has finalized the plan for improving rail-road connectivity of major ports. The plan is to be implemented within a period of three years. Further, changes in customs procedures are being carried out with a view to reducing the dwell time and transaction costs. The government has also delegated powers to the respective Port Trusts for facilitating speedier decision-making and implementation. At the same time, several measures to simplify and streamline procedure related to security and customs are being initiated. In addition, the Indian Government recently announced a series of measures to promote foreign investment in the port sector as listed below: (The Indian Ports Act, 1908, and the Major Ports Trust Act, 1963) No approval required for foreign equity up to 51% in projects providing supporting services to water transport, such as operation and maintenance of piers, loading and discharging of vehicles. Page | 9

Automatic approval for foreign equity upto 100% in construction and maintenance of ports and harbours. However, if the total foreign equity investment exceeds $ 0.30 billion (Rs. 15 billion), the proposal will be referred to the FIPB. Open tenders are to be invited for private sector participation on a Build-OperateTransfer (BOT) basis. Evaluation of bids will be based on the maximum licence period will not exceed 30 years and at the end of the BOT period all assets will revert to the port in accordance with the conditions of the agreement. The Government has announced guidelines for private/foreign participation that permit formation of joint venture between major ports and foreign ports, between major ports and minor ports, and between major ports and companies. The measures are aimed at attracting new technology, fostering strategic alliances with minor ports to create on optimal port infrastructure and enhancing private sector confidence in the funding of ports. The guidelines permit the formation of a joint venture between : a. A major port and foreign ports for the purposes of constructing new port facilities within existing ports, improving productivity of existing ports, and development of new port ; b. A major port trust and a company or a consortium of companies where ; c. A company or a consortium of companies, selected through BOT bidding under the guidelines of private sector participation alliances with a major port trust for improving the viability of the scheme and/or to enhance the confidence of the private sector. d. A company or a consortium of companies is selected under the scheme of innovative/unsolicited proposals e. Oil PSUs/a joint venture company of oil PSUs are/is selected for oil related port facility as a port based industry. One major development has been the new model concession agreement (MCA), which was approved by the Union Government in January 2008. Under the new MCA, the port trust can now directly approach the inter-ministerial Public Private Partnership Appraisal Committee (PPP-AC) for final project approval without having to first acquire in-

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principle approval. This will speed up the process of inviting bids for new projects, as well as long pending port projects. The PSP in port sector development did not take off as expected during the Tenth Plan. Necessary policy initiatives in respect of management control, etc., are required to be evolved for facilitating the formation of joint ventures. In case of non-major ports, the VGF scheme of the GoI will have to be made compatible with the requirements and the operational imperatives of the sector so as to enable the non-major ports to access these funds. Maritime States Development Council (Msdc) To have an integrated approach for the development of both Major and Non-Major Ports, the Maritime States Development Council (MSDC) was constituted in May, 1997 under the Chairmanship of the Honorable Minister of Shipping. The Ministers in-charge of Ports in all Maritime States, Union Territories of Puducherry, Andamans & Nicobar Administration, Daman & Diu and Lakshadweep are its members. The deliberations and decisions of the MSDC provide the institutional framework for coordinated development of Major and Non-Major Ports. So far ten meetings of MSDC have been held. Port Policy in Maritime States a. Gujurat It is endowed with 1215 km length of coastline which constitutes about one-sixth of the total Indian coastline. Out of 41 ports located along its coastline, 40 are non major ports while one port, viz. Kandla is a major port. Presently, 20 non-major ports in the state are handling cargo. The overall growth in port cargo traffic in case of Gujarat was 5.9% during 2008-09 compared to 2% for overall cargo growth for India. Objectives of Integrated Port Policy To increase Gujarats share in the export and import sectors in national and international trade and commerce in pursuance of the policy of liberalisation and globalization. To reduce the burden on existing major ports on the western coast of India.

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To provide port facilities to promote export oriented and port based industries which are estimated to contribute 50% of the total industrial investment in Gujurat.

To take full advantage of the strategic location of Gujurat coast by (a) encouraging shipbuilding, ship repairing ad related manufacturing activities and; (b) providing facilities for coastal shipping and ferrying passengers between Saurashtra and South Gujurat and other destinations.

To meet Gujurats potential power requirements by (a) establishment barge mounted power plants and (b) providing exclusive port facilities for importing different kinds of power fuel.

To attract private investment for the development of minor ports BOOT framework has been envisaged to provide-(i) timelines of infrastructure creation, (ii) efficiency of operation and operational autonomy to the private sector, (iii) synchronization with hinterland development, (iv) Governments role to be maintained only in appropriate areas, and (v) Government financial liabilities to be kept to a minimum.

b. Maharashtra Policy Initiatives for Port Development Development on BOOST basis. Developers selection on MOU basis or by tender if many investors interested. Concession period of 50 years. Concessional Whargage Government land on lease, if available, at market valuation. Equity participation by Government/MMB up to a maximum of 11% Road linkage to nearest State Highway to be part funded by the State and rail connectivity by Developer. Freedom to fix tariff

Policy Guidelines for Captive Terminals Land and site for jetty will be leased out for a period of 30 years Page | 12

Development on Build, Operate & transfer (BOT) basis No berthing dues from vessels calling at captive jetty Whargage charges as per the prescribed rates notified by the State Government. At the end of 30 years, the jetty, superstructure & facilities on jetty will revert back to MMB.

INVESTMENT Investments made into Port sector during the Tenth Plan are shown below:
Chart 6

During the Tenth Plan, about 4.86% of the fund allocation was utilized. The acute shortfall particularly for Major Ports has been due to failure of project formulation which delayed implementation. Chart 7 Projected Investments into Ports as per Eleventh Plan

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Private sector participation in the Port Sector has gained momentum. So far the Government has approved 25 private sector / captive during the last ten years for Major Ports worth Rs 115.82 billion with a capacity addition of 192 MTPA. Most on-going projects are being implemented on BoT basis under PPP mode. Actual capacity addition has been 102.3 MTPA through private participation. Government is planning to launch 10 major expansion projects which will add a capacity of 44 MTPA.

Under the National Maritime Development Programme, most of the major ports have formulated their projects with the fund requirements and its funding pattern under the 5 broad heads of development process as: Projects related to Port Development (construction of jetties berths etc.) Procurement, Replacement or Upgradation of Port Equipment Deepening of Channels for Improvements in Drafts Projects related to Port Connectivity Other related schemes.

The Investment envisaged for above projects is estimated at Rs. 55,803.73 crore, out of which Rs. 3,609.00 crores is expected through Budgetary Support, Rs. 13,771.54 crores through Ports own Internal Resources, Rs. 34,505.34 crores is likely to come from the Private sector and Rs. 3,917.85 crores from other sources, which include investment by Ministry of Railway, NHAI, etc.

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Status of port projects under the NMDP (as on March 31, 2009) Status No. of Projects Estimated cost (Rs billion) Capacity (mt) Funding arrangement (Rs billion)

Completed Projects Projects under progress Approved projects yet to be awarded Projects firmed up and awaiting approval Projects at preliminary/ planning stage Total

41 64 31

43.16 152.90 82.48

54.60 35.83 123.11

Budgetary Internal Private Others Support Resources 0.00 10.90 31.42 0.84 7.49 1.39 34.92 12.98 89.13 67.61 21.366 0.50

25

58.47

61.80

4.28

22.16

29.4

2.63

92

228.32

113.33

21.21

43.49

156.48

7.14

253

565.33

3888.67

34.37

124.45

374.04

32.47

NMDP: National Maritime Development Programme Source: Ministry of Shipping

Investment Opportunities There are three sub-sectors which offer wide opportunities for investors: Major Ports: This refers to new terminals added to the existing 12 major ports which is a very attractive proposition. Availability of adequate space may be a constraint. Minor Ports: Minor port project sizes are higher since these are Greenfield projects that require capital dredging as well as development of on-shore infrastructure. Strategic location and operational efficiency are going to be critical factors. Connectivity projects: Structural demand stemming from ports benefit both rail and road connectivity projects

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Private sector participation has been allowed in a variety of ports services which includes construction and operation of terminals/berths, warehousing/storage facility, dry docking and ship repair facilities. The areas identified for privatisation or investment by the private sector includes: Leasing out of existing port assets & creating of additional assets Construction or operation of container terminals, break-bulk, multipurpose and specialised cargo berths Warehousing, container freight stations, Storage facilities and tank farms Cranage and handling equipment Setting up captive power plants, Dry docking and ship repair frailties Leasing of equipment and floating craft from the private sector Pilotages Captive facilities for port based industries. Private Investments into Port Infrastructure including Foreign Direct Investment Private sector investment into Port Infrastructure is enclosed (Annexure I). The highlighted cells provide investment that includes Foreign Direct Investment. We have provided Chart 7 below that depicts how FDI has accumulated in the Port sector.
Chart 8 Foreign Direct Investments in Ports since year 2000 to Feb 2009

(Source: siadipp.nic.in) Page | 16

The Foreign Direct Investment as shown above is the amount of approved investments in Ports in India. It however does not reflect amount of actual investments made in that year which would be a staggered sum of approved investments. 4 PPP FRAMEWORKS / INITIATIVES PPP process in Indian ports has evolved from an unstructured regime in 2000 to a more organized and predictable regime in 2007. The MCA has been developed after a rigorous consultative process. It serves both as a guideline and a template document for drafting concession agreements, and has been one of the key milestones in the privatization process. Many major ports have drafted their individual concession agreements based on provisions of the MCA, which are suitably modified to specific conditions. The important development in PPP process is the initiative from the tariff regulator the Tariff Authority for Major Ports (TAMP) to evolve and implement guidelines for upfront tariff setting for PPP projects at major ports. The guidelines are applicable to all major ports PPP projects awarded after Feb 2008, while existing terminals will continue to follow the previous regimes as may be applicable. In the previous regimes ceiling tariffs were revised from time to time based on terminal performance, the new guidelines fix ceiling tariffs right at the beginning of the bid process and these are provided with the bid documents. In the new regime, standard norms are prescribed for determining the investment and operational efficiency of the project. Target revenue is then calculated as the sum of operating cost, depreciation and an allowable return on capital employed. Target revenue is then categorized into revenue from various services based on estimated demand for each service. These ceiling tariffs are indexed to WPI and escalated year on year, thereby removing the effects of varying demand on tariffs (as used to happen in the previous regime during tariff revisions). New regime is successful in removing uncertainties from a bidding perspective, certain gaps still exist in the following aspects

Estimation of Capital Cost: The tariff-setting methodology ignores cost of any reinvestment that is undertaken by the operator. This might prevent the operator from earning the desired return on capital employed in the period when such investment is incurred.

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Estimation of Cost of Capital/Return on Capital Employed: TAMP currently uses a fixed 16% ROCE for setting ceiling Tariffs. It however doesnt incorporate any capital structure assumptions and hence removes all financing incentives for the promoters. As is the case with power sector, it is desirable to use normative estimates for financing and then determine the allowable return on capital employed.

Taxes and Depreciation: The methodology also ignores tax which is a real cost to the operator. The target revenue requirement or the allowable return should be adequately grossed up to capture the effect of taxes. The method of depreciation to be used by the regulator in arriving at the tariffs is also left ambiguous. The choice of written down value method against a straight line method could cause a huge difference in point tariff estimations.

Demand Variations and operating efficiencies: While the Tariff guidelines reckon 70% of capacity as throughput, they do not explicitly specify the validity of Tariffs to this throughput. For instance, the operator could be exposed to inadequate returns during times of extreme demand variations (for example, during the present economic downturn where traffic across ports have fallen significantly). It might be beneficial to specify the throughput (or a range of throughput) at which the ceiling tariffs are valid and provide subsidies or offsets to compensate for any unexpected volatility in traffic. Further, the operator is not rewarded for any operational efficiencies or improvement in service quality parameters like speed of evacuation etc. Tariff validity at a given performance standard could be specified with Tariffs revised to reflect any operational efficiencies.

Concurrence with the Concession Agreement Provisions: There exists some disconnect in the provisions of the MCA and TAMP guidelines. For instance, Change in Law provision excludes Tariff changes. It should be noted that incase of an adverse change in law such as a increase in taxes, it is not possible for the operator to pass on the additional costs by charging higher tariffs from the user which is the case with normal business environment. It may be desirable to specify certain basic assumptions/conditions related to taxes under which the Tariffs are valid and revise the Tariffs or compensate the user for adverse changes to these basic assumptions. Other issues that would affect the pricing decisions of the operator could include clauses including minimum guaranteed cargo, input controls (mandated investment to a specific capacity much before it is used) etc. While these are tariff-related Page | 18

problems, these may not be directly addressable by the tariff regulator since they are designed to be independent of the contracting entities (Port Authority and the Terminal Operator).

Disparity and Multitude of Tariff Regimes: Today there are nearly three Tariff regimes which are effective (Feb 1998, March 2005 and the new guidelines of Feb 2008). Terminals in immediate neighborhood of each other can be governed by different provisions and tariff philosophies that would affect their ability to compete with each other. It is quite possible that one terminal has a declining ceiling-tariff profile as it is operating on depreciated assets while the other has an escalating ceiling-tariff profile under the new regime. Such conflicting tariff behaviors leave both the operators with pricing uncertainties. Further the latter may be forced to give heavy discounts to match the lower tariff, adversely affecting his expected return as revenue share is computed based on ceiling tariffs and not actual tariffs. This problem is further complicated by the existence of minor ports, which have come up in the vicinity of major ports with huge capacity. However, as entities outside TAMP purview such ports completely escape tariff regulation.

In summary, the PPP and tariff methodology which has shown considerable movement should further evolve to include the following:

The definition of the problem should combine tariff and service quality, and ensure that the customers at port terminals pay as per the service quality received. Currently, the methodology is heavily supply-focused whereas the landed and opportunity costs for the consumer and alternatives available to them will provide a better view on what charges can be levied at any particular terminal.

Tariff regulation should follow a cluster-based approach rather than a port-based approach. This would give a better view on the competition that exists in each cluster. The tariff methodology needs to be uniform with a particular cluster allowing the terminals to compete on an even ground purely based on attractiveness to the customer and the ability to price for it.

Eleventh Plan (2007-12) The Approach Paper to the Eleventh Five Year Plan (2007-2012): Towards Faster and More Inclusive Growth (November, 2006) by the Planning Commission has proposed an

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annual average growth target of 9% in terms of GDP for the Eleventh Plan and laid emphasis on following aspects for the Port Sector. (a) To develop ports and related infrastructure to bring them to international standards in turn around time and cleaning of import & export cargoes; (b) (c) Substantial capacity augmentation at major and minor ports; A deep sea port to be developed and drafts of existing ports be deepened, where feasible, through capital dredging; (d) Bulk of capacity augmentation would be undertaken through public private partnership and captive users; and (e) 5 Rail road connectivity of ports with the hinterlands to be improved on priority basis. CONSTRAINTS Hinterland Connectivity As indicated earlier Ports in India need to improve efficiency in turnaround times and equipment productivity to match global standards. Poor efficiency is also caused by slow evacuation of cargo from ports or slow turnaround of ships. While port capacity is being enhanced, appropriate improvement in road and rail connectivity will be needed. If that does not happen there will be a negative impact on the private investment which is targeted at 73.7 percent of the total investment during the XI Plan. In this area better coordination between road, rail and port authorities is badly needed. Dedicated Freight Corridor is also going to help. The recommendations of the Committee of Secretaries constituted to address hinterland connectivity include construction of a four-lane road as well as double railway line connectivity for each major port, consideration of projects less than minimum prescribed IRR on case to case basis, and consideration of budgetary assistance and also the assistance under VGF scheme for such projects. The Committee further recommended that 10 road projects of value Rs 2036 crore and 8 rail projects of value Rs 2014 crore, which had already been sanctioned, should be completed in a time-bound manner. IT Implementation The workflow in Indian ports is manual with low level of IT penetration which adversely affect the dwell time. For container handling, adequate electronic environment with Enterprise Resource Planning (ERP), which enables the resources of ports to be used in Page | 20

an even and efficient manner, is yet to be established in a full-fledged manner. The EDI, which ensures flow of data electronically between port, customs, shipping lines, and users, resulting in greater accuracy, speed, and efficiency of the total maritime logistic chain, is yet to be commissioned on a common platform. This information bottleneck is estimated to contribute to about 40% of the documentation. At present, EDI is minimal and consists of the proprietary message exchange format formulated by customs. To maximize the benefits of EDI and move towards a paperless regime, necessary steps have been already initiated to implement centralized web-based Port Community System (PCS), which would ultimately achieve seamless integration of the port community. Besides the above, there are other constraints such as inadequate infrastructure, absence of seamless connectivity with other modes, etc. Dredging During the Xth Plan only 11 percent of the target for dredging could be achieved. The XIth Plan target is more than two times. In addition there are pressing needs on maintenance dredging. Since there is a major shortfall in achieving targets there has been a policy shift which allows ports to charter foreign flag dredgers after granting the Indian Companies the first right of refusal. It might be necessary to procure the required dredgers from private dredging companies on a long term basis with appropriate guarantees and risk sharing with terminal operators incorporated in concession agreement. Joint ventures may be preferred for projects with substantial dredging component. Efficiency and Movement of cargo In the backdrop of doubling of Indias share in the world trade in the next five years, efficiency and speed in the movement of cargo through ports are vital. Shipping and cargo technologies are changing rapidly; ships are bigger and faster with large-sized container vessels drawing 14.5 m draft and moving at speeds of 25 knots; and containerization of traffic is growing steadily and significantly.

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Though the bulk of Indian trade is carried by sea routes, the existing port infrastructure is insufficient to handle trade flows effectively. The current capacity at major ports is overstretched. The situation of limited capacity and high demand has inevitably resulted in port congestion. This results in overstretched berths leading to pre-berthing delays and longer ship turnaround time. Reduction in Dwell time It is observed that the ports role in the entire logistics chain is barest minimum to provide the infrastructure facilities for handling of vessels, containers and other cargo. As per the detailed time study of the actual time taken by the port authority for handling import and export containers in the container terminal, it revealed that the total time taken by the port authority, cumulatively, is 3.5 to 5.5 hrs for import and 3.3 to 5.3 hrs for export. Thus it can be observed that the rest of the time the container dwells in the port is on the account of other stakeholders like shipping agents, customs, Clearing agents / transporters etc who have to play their respective roles in preparing & furnishing the requisite information to the port authority, arrange for funds for making payment of port charges, arranging for transport etc. The average dwell time in major container terminals is 1.88 (import) and 3.78 (export) days. Any reduction in dwell time would reduce the transaction cost and also increase the capacity of the existing Port infrastructure. This in turn would facilitate the trade in general and will enhance the competitiveness of Indian goods in the international markets. Trade and Logistics The seaport is a nodal point in the end to end global supply chains integrating the upstream and downstream movements of cargo in the value chain. Within these supply chains, the seaport adds value to both immediate and end customers while ensuring a seamless flow of goods and information from off-shore to onshore or vise-versa. Logistics cost is a key competitive factor in todays business to decide the place of source and distribution hubs. The logistics cost, as a percentage of total import/export value, is 4-4.5% in the developed countries. The logistics cost in India, is more than 10% of total imported or exported value. The following key competitive factors give the competitive advantage to other lead developing countries like China, Thailand and Malaysia over Indian products: Page | 22

i. Capability and logistics processes efficiency at the ports. ii. High-speed multi-mode corridors iii. Maximization of assets through mechanization iv. Transparent and flat organization structure v. Information systems and value added services through logistics park vi. Balanced Supply-Demand panning on capacity addition vii. Level Playing field for the private operators viii. Process or Activity driven cost structure Conflicting legal framework While the 12 major ports are under Central Government the minor ports are controlled by respective State Governments. 6 THE WAY FORWARD
Tariff Regulation beyond TAMP2

Increasing induction of private players in port is resulting in the gradual emergence of a competitive environment. The multiplicity of port operators has brought into focus the pressing need for a institutional mechanism that provides a level play for all port operators. Areas such as navigational, security, and conservancy in ports; safety occupational health; disaster management; and pollution control measures would also need to be guided by a national authority. The jurisdiction of Tariff Authority for Major Ports (TAMP) is restricted to the levy for services rendered by major ports or operators authorized by them. A suitable and a regulatory framework to address issues specific to the ports should be put in place. Tariff Setting Mechanism for PPP projects The present cost plus tariff setting mechanism combined with revenue sharing model for the PPP projects has certain inconsistencies. The Task Force, set up under the Chairmanship of Shri Anwarul Hoda, Member, Planning Commission, to examine the tariff setting mechanism parameters for PPP projects has noted that the 0tariffs to be charged by port operators would be determined by market forces once

Source Eleventh Five Year Plan

Page | 23

adequate capacity developed and sufficient competition introduced. However, in the 'berths should be bid out after determining tariff caps upfront once the basis of norms to be the purpose. As at present the revenue share would continue to be sole bidding parameter.

Private Sector Participation in PPPs The bulk of capacity augmentation would be undertaken through the PPPs and captive users. New berths at major ports would be constructed on PPP mode, except where operational exigencies necessitate taking up development of new be the ports' own resources. In addition for areas already identified, possibilities for investment in maintenance, dredging operations and pilotage would also be explored during Plan period. For providing stable policy and regulatory framework, the existing model bid including the concessions agreements are refined on the basis of the experiences gathered from the existing PPP projects. A new MCA is being developed taking into account all the experiences existing private terminals and the concerns of all the stakeholders. Corporatization of Port Trusts will provide better accessibility to funds, create a board managed corporate entity and facilitate disinvestment. Corporatization of public ports has been a mixed success Ennore has not done as well as private ports like Mundra and Pipavav. Where a particular service does not generate a sufficient stream of revenue and is thus non-viable for total privatization, the joint venture route for attracting private investment and management expertise should be encouraged. Government of India has adopted the Landlord Port Model but Port Trust (authorities) operate terminals in competition with private operators. Since private participation in overall investment has to have a major share, enabling competitive environment that discourages inefficiency is going to be critical in years to come.

Page | 24

Case Studies - Mundra Port Overview

Location & Site Condition The Mundra Port is 14 km away from the Mundra Village. The Mundra Village is situated to the northwest of the State of Gujarat and is a part of the Kachchh District. The Mundra Village is about 73 km from Gandhidham and the Kandla Port.

The Mundra Port is being developed on the Navinal Island, which is adjacent to the Bocha Island. Navinal Island and the surrounding land is low lying with an approximate land elevation between +5.6 m and +5.8 m above chart datum (CD). Mean High Water Springs as given on the Admiralty charts of the Gulf of Kachchh is +5.8m CD. Navinal Island and Bocha Island are separated by the Navinal Creek. Mundra is a semi-arid zone with monsoons spreading across the months of June and September. Brief Background In terms of Port Policy, 1995 and the BOOT guidelines, 1997 of Government of Gujarat (GOG), Mundra Port & Special Economic Zone Ltd. (MPSEZ) has been granted the Concession Rights for the Mundra Port development for a period of 30 years thorough a Concession Agreement (CA) executed between MPSEZ, GoG and Gujarat Maritime Board (GMB) on 17th February 2001. The Concession Rights granted to MPSEZ comprises of phased development of vast waterfront length of 4000-5000 meters length and vast back up area of about 5000 acres (approx. 20 million sq. mts.) at Mundra Port site location which possesses distinct features like deep draft, proximity to cargo rich hinterland, well established connectivity to hinterland etc. Port Business Page | 25

In terms of concession rights for the development of Mundra Port, MPSEZ has created international standard integrated port infrastructure comprising of Multi-Purpose Terminal along with port back up facilities spread over 300 acres for the bulk cargo, Mundra Port-Adipur railway link of about 85 Kms., construction and transfer of Quay to P & O ports owned Mundra International Container Terminal Limited (MICTL), Comprehensive waterside facilities for vessels like tugs, navigation buoys and port utilities like power, water & other infrastructure facilities. Acquisition of about 3404 acres of land on lease hold basis for port back up development. In terms of the agreement with Indian Oil Corporation, a Fortune 500 company, MPSEZ has initiated the construction Single Point Mooring (SPMs) for handling Crude Oil Cargo for IOCs refineries in North and Northwest of India. Further MPSEZ envisages development of a bulk berth of 450 metres long in the Navinal Creek to cater to growing dry bulk cargo in the hinterland. Also, as per the agreed arrangement with P&O owned MICT, MPSEZ shall provide additional constructed 618 metres berth in Navinal Creek for container Terminal. MPSEZ, in its pursuit of creating the Integrated Port Facilities, have been associated with internationally and reputed technical and management consultants like:

Maunsell Maritime, UK For Mundra Port Master Plan H. R. Wallingford, UK For Comprehensive Hydraulic Studies Howe India Ltd.- For designing of Bulk Cargo Handling Systems CGR, Australia- For design and engineering for the Container Terminal SBM Immodco, USA- For design and installation of the Single Point Mooring L&T (ECC), Skanska Cementation, Simplex- Construction Agencies A F Ferguson Traffic Studies and Business Model

With these developments, MPSEZ would have created bulk cargo capacities of about 12 mn tonnes, container cargo capacity of 3 Mn TEUs (36 Mn Tonnes with additional container berth) and crude oil cargo capacity of 24 Mn Tonnes.

S.N. 1

Waterfront Facility

Port Back Facilities

Up Total Capacity

Multipurpose Terminal and Spread over 300 acres Terminal-2 for Bulk Cargo comprising of approx. Page | 26

Facilities Dry Bulk Cargo Liquid Bulk Cargo 2 Container Terminal (632 m berth) including proposed Stage 2 CT berth to be given to P&O* Single Point Mooring

600,000 sq.m storage area and 271,000 KL 9.1 Mn T storage tanks with 2.8 Mn T requisite equipment 26 hectares (260,000 3.0 Mn TEUs sq.m) container yard (36.0 Mn T) and a 20 hectares (200,000) Container Freight Station 150 acres for COT by 24.0 Mn T IOC 310 acres for COT by HPCL

Total A. Mundra-Adipur Rail Link

71.8 Mn T Upto 22 Trains Up and Down

*P&O managed MICT has committed to take additional 618 mts. berth

Page | 27

Case Studies - DHAMRA PORT

It is an all weather, multi-user and greenfield deepwater port, located in Bhadrak District, Orissa. Developed by Dhamra Port Company Ltd. (DPCL) is a 50:50 joint venture of Larsen & Toubro (L&T) and Tata Steel. Concession Agreement was signed between Government of Orissa and International SeaPorts Limited on 02-04-1998. Dhamra Port will be developed as Mega Port in Orissa with a project cost of Rs. 22464 crores. It would handle cargo -3 MTPA to 40 MTPA. The Company shall share with the Government its gross income in accordance with formula given in table below:Period commencing from Share as Inoperation date 1 to 5 year 6th to 10th year 11 to 15 year 16th year to end of lease period
th th st th

Percentage of Income to company payable to Government by the Company. 5% 8% 10% 12%

Approach Channel

StockMaterial Handling Rail Link Bulk Jetty

Land Acquisition
The entire land requirement of the project is 3119.78 acres which consists of 1011.94 acres Government land and 2107.84 acres of private land, out of which 879.10 acres of Government land has been handed over to Dhamra Port Company Limited and 2053.89 acres of private land has been acquisitioned. Rehabilitation & Resettlement There are 348 nos. of families to be rehabilitated in relation to acquisition of the private land, out of which 248 nos. families have been fully rehabilitated and 23 nos. families have been rehabilitated partly. Progress of Construction

Page | 28

Jetty

Pre cast slab fabrication and casting of 115 nos. slabs completed. These are required for
constructing temporary approach to the jetty.

6 nos. of piling gantry fabrications and 4 nos. of erection are completed. Main jetty 2 nos. 1400 mm dia. Piles completed. Conveyor support piles on land 10 nos. completed.
Township DPCL is constructing a self reliant township for all the permanent staff who will be engaged in operating the port. The township has to be close to the port operational area but outside the ISPS code identified area. Therefore a special clear area has been chosen for creating Dhamra Port Township.

Soil investigating for township, sand filling and spreading over of 27298 sq.mts. and band drain
installation of 3.586 lakh mts. have been completed. Bulk Material Handling This is the most crucial area where bulk material will be stored and handled. The soil area has to be strong enough to hold large quantities of bulk material on top of it. It will also have to be strengthened for taking the weight of the handling system to be installed there. Following work has been completed here will June 2008.

1963 MT os structural steel fabricated and supplied. Soil investigation of BMH area is completed. 3 nos. test pile driving is completed. 308 nos. of precast piling is done.
Water Effluent Treatment & Water Reservoir The port will be requiring large quantities of fresh water for its cargo handling conveyor system (to spray it on coal cargo), water for fire fighting system, and for township. A special water reservoir and a treatment plant is being created at the site. Following works have been completed till June 2008.

Topographical survey of pipe line is completed. Geo Technical Survey of Raw Water Reservoir and water treatment plant completed. 182766 Cu. Of excavation in Raw Water Reservoir completed. 6.385 Km of pipe laying is completed. 177 Nos. of Pre cast piling is completed.
Transmission Line & Railways The port site at Dhamra is being connected by single track broad gauge line to Bhadrak 62 kilometers away to connect it with National railway system of Chennai-Howrah line. Similarly, overhead transmission lines are being laid across the tower structures parallel to the railway line to

Page | 29

connect the National Grid. Following works have been completed on rail tracks and power lines till June 2008.

1006.3 MT of tower structures supply is completed. Soil Investigation of 62 KM is completed. 27347 Nos of sleepers supplied. 18892 Cu.m of Ballast supplied. 6000 MT of rail supplied. 60838 Cu.M of Embankments filling is done.
Other Infrastructure Strores and Godowns : The large quantities of cement, steel and other vital material is being stored at Bhadrak in preference to Dhamra for various reasons of logistics and security. DPCL is constructing its own godowns and store houses at Bhadrak following works have been completed till June 2008. Stores and cement godown at Bhadrak under progress. Batching plants

Batching plant at three locations commissioned. Batching plant erection and allied structures are complete. Production also started.
Labor Colony A large local labor force of silled and unskilled workers is being deployed by DPCL under construction stage as a part of its social responsibility. These people need temporary colonies near the port area. Following work has been completed in this regard till June 2008. Two blocks at Labor colony at Koithkola batching plant has been completed and commissioned. Percentage of Infrastructure completed by June end 2008 20% of Infrastructure for the Phase-I of the project has been completed by June 2008. Dredging & reclamation completed by June end 2008 11% Capital Dredging & 26% of Reclamation of Phase-I has been completed by June 2008. Finance The Financial closure has been made on 26-0302007. The estimated project cost is Rs. 2464 Crore. The Company has tied up with a consortium eight lenders led by IDBI for a financial assistance of Rs. 1971 cores and has already drawn Rs. 388 Crore. Enviroment The Company has been associated with International Union for Conservation of Nature (IUCN) and working in close coordination with them a view to take appropriate measures for conservation of environment, endangered species and other related issues.

Total no of Berth for the port would be 13. The cargo to be handled by the Dhamra Port are Iron Ore, Chromite Coal, Bauxite, Dolomite etc. The Developer will operate the Port on BOOST basis initially for the period of 30 years which
can be extended for 10 year twice.

Page | 30

Page | 31

Growth in Cargo handled at Indian Ports and related parameters(in percent) Parameters 2004-05 2005-06 2006-07 2007-08 2008-09

Trends in India,s Select: Macro Parameters I. Total Cargo (a)Major Ports (b)Non Major Ports II. GDP overall (a)Agriculture (b)Industry ( c) Services III. Foreign Trade (a) Export in $ value (b) Import in value IV World Output (a)Advanced Economics (b) Developing Economics V. World Trade Volume (goods) VI. Export Volume (Goods) (a)Advanced Economics (b) Developing Economics VII. Import Volume(Goods) (a)Advanced Economics (b) Developing Economics VIII. World Seaborne Trade* (a)Goods Loaded (b) Goods Unloaded 9.7 16.9 4.9 5.3 4.9 6.3 12.6 3.6 3.8 3.3 7.9 12.6 8.3 7.6 9.3 4.1 13.7 4.2 4.8 3.5 Page | 32 0.0(-12.7) 10.9(-8.7) 9.0 14.3 5.7 10.7 8.7 10.8 5.2 8.9 1.5(-14.4) 6.1(-7.2) 30.8 42.7 4.9 3.2 7.5 11.0 23.4 33.8 4.5 2.6 7.1 7.5 22.5 24.4 5.1 3.0 8.0 9.3 29.0 35.5 5.2 2.7 8.3 6.6 3.5 14.4 3.2(-1.3) 0.9(-3.8) 6.1(1.6) 3.2(-11.5) 12.0 11.3 14.1 7.5 0.0 10.3 9.1 10.9 10.4 12.5 9.4 5.9 10.1 10.3 12.2 9.5 19.7 9.6 3.8 11.0 11.1 10.4 12.0 6.5 9.0 4.9 8.1 10.9 2.1 2.1 2.0 6.7 1.6 3.9 9.7

I. Based on data from Major Ports & Non Major Ports II. Based on gross domestic product (GDP) at Factor Cost (1999-2000 Prices), Central Statistics Organisation III. Based on Department of Commerce, DGCI&S data IV. VI,V,VI&VII Based on World Economic Outlook,April2009,IMF VIII. Based on Review of Maritime Transport,2008,UNCTAD Note: MT:Million Tonnes; for item Nos IV,V,VI,VII and VIII year 2004-05 refers to calendar year 2004 and so on; figures within parenthesis indicate forecasts for the relevant parameter for the year 2009:*growth in total goods loaded plus unloaded.

Page | 33

Quarter wise Growth in Indias Cargo Traffic at Major Ports & GDP 2007-08 Q1 GDP* GDP Mfg. 9.2 10.0 Q2 9.0 8.2 Q3 9.3 8.6 Q4 8.6 6.3 Q1 7.8 5.5 Q2 7.7 5.1 2008-09 Q3 5.8 0.9 Q4 5.8 -1.4

Growth in Commodity wise Cargo Traffic (in tonnes) POL Iron Ore Coal Fertilizer Container Others Total 18.7 4.9 8.4 35.7 34.3 2.0 14.2 10.7 14.6 12.9 25.1 24.1 3.9 13.3 3.2 17.3 11.7 9.6 26.8 2.1 10.3 6.5 18.4 -0.1 9.2 27.5 2.6 10.6 0.4 15.0 18.3 28.1 17.6 1.2 9.0 5.3 -14.2 14.7 24.0 11.5 5.1 5.4 5.2 -4.3 -0.1 22.4 -18.5 -22.0 -3.4 5.6 9.6 6.7 -43.1 -13.4 -14.8 -1.4

GDP: Gross Domestic Product at factor cost at 1999-2000 prices; Mfg. Manufacturing

Page | 34

Commodity Group POL Iron Ore Building Materials Coal Fertilizer & FRM Others

Commodity-wise Traffic Handled by Non-Major Ports Traffic Handled ('000 Tonnes) % Change over Previous Year 2005-06 2006-07 2007-08 2008-09 2005-06 2006-07 2007-08 2008-09 69724 81200 94310 101600 (44.86) (43.63) (47.58) (50.27) 2.9 16.5 16.1 7.7 28840 (18.56) 13394 (8.62) 13566 (8.73) 5614 (3.61) 24282 (15.62) 33973 (18.26) 14391 (7.73) 14015 (7.53) 6818 (3.66) 35702 (19.18) 28778 (14.52) 12736 (6.43) 14477 (7.30) 5572 (2.81) 42323 (21.35) 26245 (12.98) 15103 (7.47) 18525 (9.17) 11358 (5.62) 29288 (14.49) 34.8 -5.2 0.4 43.6 38.9 17.8 7.4 3.3 21.4 47 -15.3 -11.5 3.3 -18.3 18.5 -8.8 18.6 28 103.8 -30.8 2

155420 186099 198196 202119 All (100.00) (100.00) (100.00) (100.00) 12.5 19.7 6.5 Note: Figure in parenthesis is the percentage share of major commodity groups in the total traffic handled by the Non major ports. Source - Update on Indian Port Sector, Ministry of Shipping

Page | 35

Annexure 1 APPROVED PRIVATE SECTOR/CAPTIVE PORT PROJECTS IN MAJOR PORTS (OPERATIONALISED) AS ON 31sT MARCH, 2009
SI. Project Name Port Capacity (MTPA) Estimated Project Cost (Rs. in Crores) as per RFP (5) 750.00 Date of Concession Agreement and Name of Private Operator Date of Actual Out of (8) FDI No. Name Operationalizati on Investment by the Private Operator (Rs. in Crores) involved up to the month of report both in Mill ion US $ and Rs. in crores.

(1) (2) 1. Development of two Container Terminals NSICT. BPCL Jetty by berths

(3) JNPT

(4) 14.40

(6) 03.07.1997 Nhava Sheva

(7) April, 1999

(8) 1000

(9) 96 Million US $

International Container Terminal. 17.08.1999 BPCL&IOC equally shared the cost. 10.08.2004 Maersk+CONCOR Consortium

435 Crores.

2.

lNPT

5.50

200

February, 2002

200

Nil

3.

Redevelopment of BT to CT

lNPT

15.60

900

14.03.2006 (Trial) 30.10.2006 (Full)

1078.60

Equity- Rs. 360.40 crores US $ 60.82 mn Debt (Rs. 718.2 crores) US $ 164.35mn

4.

5. 6.

Construction and Operation of general cargo berth No. 5A & 6A Fifth Oil Jetty (IFFCO) Oil Jetty related facilities at

MoPT

5.00

220.00

11.4.1999 South West Port (formally ABG Goa Port Pvt. Ltd.) 8.11.1996 Mis IFFCO 8.10.1997 Mis ESSAR

19.6.2004

220.00

KPT KPT

2.00 12.00

21.50 750.00

30.4.1998 14.12.2006

21.50 750.00

Page | 36

SI.
No.

Project Name Name

Port (MTPA)

7
8.

Oil Jetty awarded KPT to Mis IOCL Development of KPT Container Freight Station & KPT Development Operation of Container Terminal Container TPT Terminal (Berth No.7). Container VPT Terminal at Multipurpose Berth outer harbour.

2.00

Capacity Estimated Project Agreement and Cost (Rs. Name of Private in Crores) Operator as per 20.70 (Legal Agreement yet to be signed.)

Date of Date Actual Operationaliza Investment on the Private Operator in Crores) 1.3.2001 20.70

Out of (8) FDI involved up to the month of report both in Mill ion US $ and Rs. in crores. Nil

Mis IOCL
3.00 41.07 12.02.2002 12.02.200 41.07 Nil

M/sCWC
7.20 223.00 23.6.2006 1 st 10/3/2007 (Operatio 21.12.199 200.00 (Approx.) Nil

9.

Mis ABGKCTL

10.

5.00 (4,70,00

100.00

11.

Present1.70 Ultimate - 2.80 MTPA

108.00

15.07.1998 PSA SICAL Terminals 11.9.2002 Visakh Container Terminal Pvt. Ltd., a SPY incorporated by the consortium consisting of Mis United Liner Agency of India (P) Ltd. and Mis Dubai Ports International. 28.11.2001

135.00

84.38

26.6.2003

76.70

Mis

6.31 Crores (Million US $ 1.539).

12.

Multipurpose Berths- EQ-8 EQ-9

VPT
&

6.00

196.00 (including Rs.16 crores

Mis Vizag Seaport

Pvt. Ltd., incorporated by the

E Date of 321.17 Operation 25 D of

59.78 Crores (Million US $ 13.05)

Page | 37

towards infrastruct ure developm ent). 13. Captive Coal PPT Berth to IFFCO 4.00 26.17

consortium consisting of Mis Gammon India Ltd. and Mis Management Services Ltd., UK.

Completi 1.12.20 EQ-9- Date of Operation 16.9.20 27.8.19

Mis IFFCO

--

--

Page | 38

Annexure 1 APPROVED PRIVATE SECTOR/CAPTIVE PORT PROJECTS IN MAJOR PORTS (OPERATIONALISED) AS ON 31sT MARCH, 2009

14. (a).

Container ChPT Terminal at Chennai Stage-I 600 mtrs. Berth Container ChPT Terminal at Chennai Stage-II 285 mtrs. Berth. KaPT Multipurpose (HDC) Berth No. 4A

5.60

469.9

9.8.2001

30.11.2001

14. (b)

2.40

--

9.8.2001

18.8.2002

580.1 (USD 142M) - for both Container Termina!s. -do-

FDI ofUS$ 22 Million (INR 933 M) for both the Container Terminal.

-do-

15.

3.00

150.0

14.5.2002 Mis International Seaports (India) Pvt. Ltd.

30.1.20021 Mis T.

7.12.2003

126.00

Rs. 32.00 crores (7.1 million US $)

16.

Allotment Multipurpose Berth No. 12

of KoPT (HDC)

1.00

30.07

23.3.2002

25.80

17.

18.

Crude Oil handling facility for BPCL Kochi Refinery (Formerly KRL) Marine Liquid Terminal

CoPT

7.5

720

M. International Logistics Ltd. (TMILL), a consortium ofTata Steel and IQ Martrade, Germany. MOD signed on 11.6.2003

--

3.12.2007.

735.07

Nil

EPL

3.00

249.43

09.06.2006 Ennore Tank Ltd., Chennai

Mis

16.01.2009*

247.50

N.A.

Pvt.

Page | 39

Annexure II Definitions Turn Round Time (TRT) Definition: The Turn Round Time of a vessel refers to the time the vessel reports at the anchorage to the time it sails out from the berth. The Average Turn Round Time on port account and non-port account From the data pertaining to the above three port efficiency parameters, it is observed that the average PBD, NWT and TRT values especially on non-port account are quite high, indicating that ships have to wait at anchorage or berth for availing the services and under utilization of resources at Indian Ports. Ideally, the berths should wait for ships and not the ships for berth. Pre-Berthing Detention Definition: This is the time taken by a ship from its arrival at the anchorage (reporting station) till it starts its movement to the working berth, i.e., operational berth. Pre berthing Detention is a component of the Turn Round Time and any increase in the PBD correspondingly increases the Turn Round Time. The Average Pre Berthing Time on port account and non-port account at the Indian Major Ports for Major Ports is 9.7 hours . At the international Ports there is no concept of PBD as sufficient infrastructure is available to service the vessels as and when they arrive. NWT as also TRT at International Ports is low. Non Working Time of Vessels at Berth Definition: Non-working time is defined as sum of the The Idle time from the time of berthing to start of work, idle time during ship operation and idle time taken from the time of completion of operations to sailing from berth together.

Page | 40

Statewise Names of Minor Ports in India

Page | 41

GUJARAT 1 Mandvi 2 Navlakhi 3 Bedi 4 Sikka 5 Jafarabad 6 Okha 7 Porbandar 8 Veraval 9 Bhavnagar 10 Bharuch 11 Magdalla 12 Koteshwar 13 Mundra (i) GAPL Mundra) (ii)Old (Mundra) 14 Jakhau 15 Jodia 16 Salaya 17 Pindhara 18 Beyt 19 Rupen 20 Mangrol 21 Kotda 22 Madhwad 23 Navabandar 24 Rajpara 25 GPPL (Pipavav) 26 Mahuva 27 Talaja 28 Ghogha 29 Khambhat 30 Dahej 31 Bhagwa 32 Onjal 33 Vansi-Borsi 34 Billimora 35 Valsad 36 Umarsadi 37 Kolak 38 Maroli 39 Umergaon 40 Mul-dwarka MAHARASTRA 1 Dahanu 2 Tarapur 3 Nawapur 4 Satpati 5 Kellwa-Mahim 6 Arnala 7 Datiware 8 Uttan 9 Bassein 10 Bhiwandi 11 Manori 12 Kalyan 13 Thane

14 Versova 15 Bandra 16 Trombay 17 Ulwa-Belapur 18 Panvel 20 More 21 Mandwa 22 Karanja 23 Thal 24 Rewas 24 Alibag 25 Dharamtar 26 Revdanda 27 Borli/Mandla 28 Nandgaon 29 Murud-Janjira 30 Rajpuri 31 Mandad 32 Kumbharu 33 Shriwardhan 34 Bankot 35 Kelshi 36 Harnai 37 Dabhol 38 Palshet 39 Borya 40 Jaigad 41 Tiwri-Varoda 42 Purnagad 43 Jaitapur 44 Vijaydurg 45 Deogad 46 Achara 47 Malvan 48 Niwti 49 Vengurla 50 Redi 51 Kiranpani 52 Ratnagiri 53 Dighi

(i)Anchorage (Kakinada) (ii)Deep Water 5 Narsapur 6 Machilipatnam 7 Vadarevu 8 Nizampatnam 9 Krishnapatnam 10 Gangavaram 11 Mutyalammapalem 12 Ravva LAKSHADWEEP 1 Agatti 2 Amini 3 Andrott 4 Bitra 5 Chetlat 6 Kavaratti 7 Kadmat 8 Kiltan 9 Kalpeni 10 Minicoy ADAMAN &NICOBAR

8 Ennore (C) 9 Punnakayal (C) 10 Thirukkadaiyur (C) 11 PY-3 (Oil field) (C) 12 Kattupalli (C) 13 Thiruchopuram (C) 14 Manappad (C) 15 Kudankulam

GOA 1 Panaji 2 Chapora 3 Betul 4 Talpona 5 Tiracol ORISSA

1 Gopalpur 2 Behrabalpur (Balasore)

DAMAN & DIU

1 Port Blair 2 Mus 3 Car Nicobar 4 Havelock 5 Mayabunder 6 Diglipur 7 Rangat 8 Hut Bay 9 Katchal 10 Campbell Bay 11 Neil 12 Dugong Creek 13 Nancowry 14 Chowra 15 Teressa 16 Kondul 17 Pillow Millow 18 East Island 19 Cinque Island 20 Jolly Bouy Island 21 Tillonchong 22 Castle Bay 23 South Bay TAMIL NADU 1 Cuddalore 2 Nagapattinam

1 Daman 2 Diu KERALA 1 Alappuzha 2 Vadakara 3 Kannur 4 Kasargode 5 Kodungallore 6 Ponnani 7 Thalassery 8 Thiruvananthapuram 9 Quilon 10 Kozhikode/Beypore 11 Neendakara 12 Azhikkal 13 Koavalam/Vizhinjam PONDICHERRY 1 Pondicherry WEST BENGAL 1 Kulpi

KARNATAKA
1 Mangalore 2 Malpe 3 Hangarkatta 4 Kundapur 5 Bhatkal 6 Honavar 7 Tadri 8 Belekeri 9 Karwar 10 Padubidri ANDHRA PRADESH 1 Bhavanapadu 2 Calingapatnam 3 Bheemunipatnam 4 Kakinada

3 Rameswaram 4 Pamban 5 Colachel 6 Valinokkam

7 Kanyakumari

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