A Project report on

COMPARITVE STUDY OF FINANCIAL

PERFORMANACE OF JAWAHARLAL NEHRU
PORT & VISHAKAPATNAM PORT

UNDER SUPERVISION OF SUBMITTED BY

Mr.RISHIRAMAN SHRADHA SINGH

Sr. Lecturer, SMS PGRM/02/44

School of Management Sciences, Varanasi

2008-09
 DECLARATION

SHRADHA SINGH student of PGDM-RM( 1st sem) at School Of Management Sciences,

Varanasi hereby declare that the Industrial Analysis entitle “Comparative study of
financial performance of Jawaharlal Nehru Port & Vishakhapatnam Port” is the
result of my own effort and is raised on information collected and guidance given by my
mentor & faculty members.

The industrial analysis is correct to the best of my knowledge & this report so far has not
been published anywhere else.

SHRADHA SINGH

PGDRM/02/44

SMS, VARANASI
 ACKNOWLEDGEMENT

It is great honour for me to be assigned this topic.

First of all I would like to bow before the all mighty presence of

God without whose mercy this project would have not been possible.

I am immensely thankful to Prof. P.N.JHA, Director, School Of

Management Sciences, Varanasi, for providing us every able opportunity

to bring up our latent.

I would also like to thank my mentor Mr.RISHIRAMAN for

Providing me the opportunity for industry analysis & helping me in

Completing the industry analysis report.

I would also like to thank here my parents who were there with

Me when I needed their support & cooperation at each & every step

Of the project.

PREFACE
This report has been conducted to get an overview of “Comparative study of financial
performance of Jawaharlal Nehru Port and Vishakhapatnam Port.”

The basic objectivity of this report is to touch the most of the important

aspects of comparison between JAWAHARLAL NEHRU PORT AND

VISHAKAPATNAM PORT .This report comprises of Comparison in operating income

, operating expenditure, operating ratio, salaries & wages expenses, maintenance

Expenses, dredging expenses and operating surplus.

Finally conclusions have been made.

With my best efforts, I have incorporated all the necessary details which are required for
the report.

I hope that the report will be appreciated by all.

TABLE OF CONTENTS

• INTRODUCTION
• OBJECTIVES

• METHODOLOGY

• FINDINGS

• ANALYSIS

• CONCLUSION

• SUGGESTIONS

• LIMITATIONS OF STUDY

• BIBLIOGRAPHY
 INTRODUCTION

INTRODUCTION

The role of foreign trade in day to day to life of common man has increased so much that,
now it’s next to impossible to end a day without consuming a commodity, which is not
produced internationally. This has induced me to work on the topic “Analytical Study of
Financial Performance of Shipping Industry” allotted by Mentor. The motive of this
inclination was to understand the financial performance of Shipping Industry when
foreign trade is increasing therefore the opportunity and prospect of shipping industry is
growing simultaneously. Shipping, transportation of passengers and goods on waterways.
From prehistoric times shipping has had a major influence on human social development.
Water routes, unlike roads, did not need building, and the difficulties and dangers were
less than those offered by mountains, marshes, and enemy tribes. Therefore many early
civilizations developed on navigable rivers or .on the coasts of warm seas. Ancient
peoples famous for their shipping enterprises include the Phoenicians, the Cretans, the
Egyptians, the Greeks, and the Romans. The shipping routes of those highly civilized
peoples were chiefly in the Mediterranean, but their voyages extended to India, along the
Atlantic coast of Africa, and to Britain, where n was secured. The goods shipped
consisted largely of luxuries, including spices, perfumes, and such fine pottery as the
famous Athenian ware; but shipments of grain became important as cities grew in size.

The great modern merchant marines (national fleets of commercial ships) first appeared
in the commercial revolution. Leaders in shipping included the Spanish, the Portuguese,
and the Venetians. The activities of mariners of SW Europe included discovery and
conquest in the New World. In the 13th and 14th cent. The Hanseatic League mercantile
league of medieval German towns built up a great trading and fishing fleet, while the
Italian city-republics developed marine insurance on modern lines. England's shipping
industry was associated with colonization, with the development of manufacturing, and
especially with leadership in the Industrial Revolution. The greatest competitors of the
British were the French and the Dutch. Both were vanquished in war and strangled in
peace by the British Navigation Acts, in English history, name given to certain
parliamentary legislation, more properly called the British Acts of Trade. The acts were
an outgrowth of mercantilism, and followed principles laid down by Tudor and early
Stuart trade regulations

The introduction of slave labour into the American colonies made the slave trade one of
the most profitable branches of shipping for two centuries. America's vast resources in
timber provided an advantage in building wooden ships, and swift sailing vessels of
American design, such as the schooner and the clipper, dominated shipping until the mid-
19th cent. The introduction of steel steamships enabled Great Britain to reassume the
chief place in shipbuilding and shipping.

Shipping in the Twentieth Century

From about 1900 until World War I, Germany held second place in the world in both
navy and merchant marine, and its challenge to Great Britain's domination of the sea was
an important cause of the war. In the period between the two world wars the principal
maritime nations were Great Britain and its dominions, the United States, Japan, Norway,
Germany, Italy, the Netherlands, and France. The United States merchant marine steadily
declined, and in order to stimulate shipbuilding the Merchant Marine Act of 1936 created
the U.S. Maritime Commission. At the beginning of World War II in Europe, U.S.
shipping, handicapped by the Neutrality Act, law passed by the U.S. Congress and signed
by President Franklin Delano Roosevelt in Aug.1935.
After the entry of the United States into the war (Dec., 1941), a huge shipbuilding
program rapidly got under way, and standardized vessels were turned out by assembly-
line methods. A brief period of United States dominance in world shipping followed the
war. Subsequently, however, the U.S. merchant marine again declined steadily; as the
expense of American labour and ship construction increased, the cost of operation went
beyond competitive levels, despite the fact that the American shipping industry was
receiving a large subsidy from the federal government.

Since the 1960s, U.S. ports have modernized their facilities by automating operations,
installing computerized tracking systems, and handling containers ("intermodal
shipping") that can be transferred directly to truck trailers or rail cars. Older facilities that
do not have the room to handle containerized shipping have declined. These changes
have greatly reduced the number of jobs in the shipping industry.

Much of the cargo formerly carried in American vessels and in those of other major
nations is now carried by so-called flag of convenience fleets. Such lines arose with the
tendency of large shippers, especially those of Greece and the United States, to avoid the
high taxes of their home countries by registering their ships in low-tax nations such as
Panama and Liberia. In 1998 about 1.08 trillion tons of goods were imported to or
exported from the United States by ship, but vessels flying the U.S. flag handled only 3%
of that shipping.

Shipping Industry in India

The Shipping Corporation of India Ltd., (SCI) was incorporated on 02.10.1961 by

amalgamation of Eastern Shipping Corporation and Western Shipping Corporation, with
an authorised capital of Rs.35.00 Crore and paid-up capital of Rs.23.45 Crore. On the day
of amalgamation, the SCI s fleet stood at 19 vessels of 1.39 Lakh GT and 1.92 Lakh
DWT. Subsequently two more Shipping Companies viz. Jayanti Shipping Company and
Mogul Line Ltd. were merged with the SCI in 1973 and 1986 respectively.

Fortify and grow is a character with which SCI is very conversant. This defined its earlier
growth path and catapulted SCI into a specialist category; the 1960 s recognized SCI as a
complete liner services company. In fact, as much as 90% of its entire tonnage was a
consequence of liner ships regularly plying coastlines. This proved to be a source of
power and a point of contemplation; the goals and achievements only marked a progress
route and were actually, just a brighter future in waiting.

Diversification was the future eluding SCI, at that time. Quick expansions to its fleet
were subsequently undertaken, in sync with its progress plans. The fleet structure thus
adopted distinguished it as the most diversified fleet-owner in India. Chance caused it to
make it to the top-most league in the international arena. Even by international standards,
SCI employed a remarkably diversified ship line-up; liner, bulk carriers and tankers,
technical and offshore services that transport everything, from iron-ore to fertilisers,
crude oil to petroleum products and critical materials used in offshore installations, and
even tow rigs. Representing India to the extent of 40% of its entire tonnage! Other critical
points too, like a presence in almost every major sea route in the world, have been
instrumental in classifying it as a global player, slotting it in the world s top 15 league.

India has a long coastline spanning 7600 kilometres forming one of the biggest
peninsulas in the world. It is serviced by 12 major ports and 185 notified minor and
intermediate ports Major ports handled over 80% of all cargo traffic in 2007. However,
the words "major", "intermediate" and "minor” do not have a strict association with the
traffic volumes served by these ports. As an example, Mundra Port, a newly developed
minor port in the state of Gujarat registered a cargo traffic of around 28.8 million tonnes
per annum during the financial year of 2008, which is higher than that of many major
ports.

The classification of Indian ports into major, minor and intermediate has an
administrative significance. Indian government has a federal structure, and according to
its constitution, maritime transport falls under the "concurrent list", to be administered by
both the Central and the State governments. While the Central Shipping Ministry
administer the major ports, the minor and intermediate ports are administered by the
relevant departments or ministries in the nine coastal states of West Bengal, Orissa,
Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa, Maharashtra and Gujarat. Several
of these 185 minor and intermediate ports are merely "notified", with little or no cargo
handling actually taking place. These ports have been identified by the respective
governments to be developed, in a phased manner, a good proportion of them involving
Public-private partnership.
There are also 7 shipyards under the control of the central government of India, 2
shipyards controlled by state governments, and 19 privately owned shipyards. The major
ports handled 423.4 million tons of cargo for the financial year 2005-2006, with
Vishakhapatnam, Cochin ,Kolkata Port, Chennai Port and Kandla carrying the greatest
tonnage. Major ports can collectively handle 400+ million tons of cargo annually, and
port operations have improved since the mid-1990s. All major ports, except one (Ennore
Port), are government administered, but private-sector participation in ports has
increased.

Despite positive steps taken by the government and large size of its commercial fleet,
India is a small player in the international shipping market and its export possibilities in
this sector are, at present, quite limited. This is because India does not have adequate
numbers of large modern tankers and high-speed containership. As a consequence, Indian
fleet has been slow to enter the emerging shipping sector, particularly the high value,
high volume container trade. This is evident from the fact that in July 2000, India had
only 10 cellular container vessels which accounted for around 0.14 grt (0.18 million dwt)
of Indian tonnage.26

Liberalisation and reforms of the 1990s have made the environment of shipping more
competitive both in terms of cargo and resource mobilisation markets. In this
environment, only those industries that have developed a comparative advantage can
thrive. Indian shipping lags far behind its international competitors with respect to
resource mobilisation, technological modernisation and expansion. As a consequence,
although the volume of India’s overseas trade has more than doubled in the 1990s, the
share of Indian ships in the trade has declined. In the post-independence period the share
of Indian ships in the overseas trade increased steadily to over 40 per cent in 1987–88 but
thereafter declined to around 30.8 per cent in 1998–99 and their share in liner cargo is
only around 14 per cent. Currently, the Indian economy is paying around Rs 15,000–
18,000 crores per annum to foreign flagships which carries as much as 69 per cent of our
overseas trade.27 the amount of outgo will increase progressively with the growth of
Indian trade if the share of Indian shipping does not improve.

Indian shipping industry has pointed out that despite its vital role in the growth and
development of the country’s economy and trade, shipping is not recognised as an
infrastructure industry and, therefore, does not enjoy the developmental benefits that are
available to other infrastructure sectors. Nor is shipping recognised as an export industry
in spite of its substantial foreign exchange earnings.30 at present, Indian shipping is
being taxed at the highest level in the world. In the 1990s the government withdrew the
exemptions that were available under Section 33AC and 80I of the Income Tax Act and
introduced a Minimum Alternative Tax. This has resulted in an effective tax rate of 22
per cent31 which may seem low compared to other domestic industries and services, but
is higher than what is paid by any of India’s international competitors.

Thus, the major challenges before the Indian shipping industry today are the steep
competition from large and sophisticated international shipping lines, constraints on
fiscal and financial front and the declining share of national shipping in the carriage of
the country's overseas trade.

Although India has the largest merchant shipping fleet among the developing countries
and ranks seventeenth in the world in terms of gross registered tonnage (grt) and fifteenth
in terms of deadweight tonnes (dwt), the country has not been successful in exporting its
maritime services or emerging as a forerunner in the arena of international trade. Given
the locational advantage, strong maritime tradition and rich hinterland, India has the
potential for expanding trade in this sector. It is therefore important to identify the
country's opportunities and constraints to trade in maritime transport services for the
current round of GATS 2000 negotiations

Role of Shipping Industry in Foreign Trade

India plays an important role in the world economy. It noticed with admiration the
economic development in India within the last decade. India has experienced an almost
twenty percent (20%) growth in foreign trade. That is the second largest development in
economic growth worldwide.

Trade is essential for the economy. And transportation is a significant facilitator of trade.
It is well known, that maritime transport carry around eighty percent (80 %) of world
trade. Maritime transport is a strong precondition for growth in trade!
The shipping industry has shown an impressive ability to adopt rapidly to the new global
structures and innovations.

It noted with satisfaction the large extent of openness of the Indian market to
international maritime transport.

Several shipping companies are servicing the Indian market in international trades.

India is a vast country with a long coastline and many ports. Twelve of these are major
ports.

Traffic in Indian ports has risen over the last ten years. It is told, that this is due to a
liberalisation process started by the Indian Government. Indian ports were opened for
participation or investment by the private sector - in the area of cargo handling capacity.

It is told, that the construction of the terminal has started and is running according to
plan. The facility should be in operation in the first quarter of 2004.

The Indian shipping industry is governed by the Merchant Shipping Act (MSA), 1958,
and the Director General of Shipping is the regulatory authority for all activities of
shipping, such as shipping administration, maritime safety, maritime training,
examination and certification, shipping development, etc. The Director also ensures
implementation of various international conventions relating to safety requirements,
prevention of oil pollution and other mandatory requirements of the International
Maritime Organisation (IMO).

Recognising the role of the shipping industry in the context of overall growth strategy, in
general, and the promotion of trade and foreign exchange earnings, in particular, the
Indian government has made several amendments to the MSA to encourage the
modernisation and diversification of this industry. Since the 1990s, the government has
simplified the regulatory procedures for raising resources from commercial markets and
external borrowing in order to facilitate the acquisition of new and second hand vessels at
competitive prices. The shipping companies are now allowed to retain sales proceeds of
their ships abroad and utilise them for fresh acquisition. Government approval is no
longer required for raising foreign exchange loans from abroad by mortgaging the vessels
with the lender. The government has also granted automatic approval for foreign direct
investment up to a limit of 74 per cent and non-resident Indians (NRIs) are permitted to
invest up to 100 per cent with full repatriation benefits.

Apart from cabotage, the government also provides cargo support for Indian lines by
implementing the policy of buying (importing) on FOB basis and selling (exporting) on
CIF basis. The government owned/controlled cargo is channelled by the chartering wing
of the Ministry of Surface Transport, “Tran chart”. As per this policy, the first right of
refusal for carriage of such cargoes is given to Indian vessels. However, in case of non-
availability of suitable Indian vessels, foreign flag vessels can be used for transportation
of these cargoes.

Government Policies for Shipping Industry

Maritime transport services have played a crucial role in the development of India’s
economy since over 90 per cent of the country’s trade volume (77 per cent in terms of
value) is moved by sea. The Indian peninsula is strategically located between the Atlantic
Ocean in the west and Pacific Ocean in the east, with a 6,000 km long coastline, and 12
major20 and 139 operable minor and intermediate ports. At present, India has the largest
merchant shipping fleet among the developing countries and ranks seventeenth in the
world in shipping tonnage. There is also an urgent need to beef up the fiscal plicis to
ensure that the shipping industry gets the right support to sustain its growth. The only
fiscal benefit enjoyed currently by the shipping industry pertains to Section 33AC of the
income tax Act, 1961, which enables shipping companies to claim tax deduction up to
50% of the funds generated from internal accruals and deployed in equisition or repairs of
ships.

The salient features of India’s shipping policy are the promotion of national shipping to
increase self-reliance in the carriage of country’s overseas trade and protection of the
interest of exporters and importers.21 India’s national flagships provide an essential
means of transport for the import of crude oil, petroleum products, coal and fertilisers,
export of iron ore and exports and imports of various general (liner) cargoes. National
shipping also provides for a second line of defence in times of emergency – merchant
ships help in transporting supplies, men and material for the navy. Indian shipping makes
significant contributions to the foreign exchange earnings of the country. The foreign
exchange earnings/savings of Indian shipping companies increased by over 50 per cent in
the 1990s.

The eve of independence, India had only 60 vessels and the Indian shipping tonnage was
1.92 lakhs grt. In July 2000, Indian fleet comprised of 517 vessels and the shipping
tonnage is 7.02 million grt. The Ninth five-year plan has proposed a growth target of 2
million grt over the Eighth five-year plan taking the total shipping tonnage to 9 million
grt.

The Indian shipping industry is governed by the Merchant Shipping Act (MSA), 1958,
and the Director General of Shipping is the regulatory authority for all activities of
shipping, such as shipping administration, maritime safety, maritime training,
examination and certification, shipping development, etc. The Director also ensures
implementation of various international conventions relating to safety requirements,
prevention of oil pollution and other mandatory requirements of the International
Maritime Organisation (IMO).24

In the past, Indian ships had to be repaired at Indian yards, which were not competitive
either in terms of costs or time. This restriction has been removed and shipping
companies can now get their ships repaired in any shipyard without seeking prior
approval of the government. The Reserve Bank of India authorises foreign exchange for
imported capital goods for ship repair/dry docking and spares without any value limits.

Previously, shipping companies required a license from the Director General of shipping
to operate a liner service. The government has now delicensed many liner routes.
Moreover, foreign ships calling at Indian ports do not require a license for overseas trade.
For coastal trade, licenses are given to foreign flag vessels on a case-by-case basis as per
the cabotage regulations. The government has also set up the National Shipping Policy
Committee (NSPC) under the Chairmanship of Director General of Shipping to provide
fiscal, financial, administrative and legislative measures for growth and development of
shipping in India.

At present, Indian shipping is being taxed at the highest level in the world. In the 1990s
the government withdrew the exemptions that were available under Section 33AC and
80I of the Income Tax Act and introduced a Minimum Alternative Tax. This has resulted
in an effective tax rate of 22 per cent31 which may seem low compared to other domestic
industries and services, but is higher than what is paid by any of India’s international
competitors.32

Thus, the major challenges before the Indian shipping industry today are the steep
competition from large and sophisticated international shipping lines, constraints on
fiscal and financial front and the declining share of national shipping in the carriage of
the country's overseas trade.

The major ports are under the purview of the Ministry of Shipping (previously they were
under the Ministry of Surface Transport – MOST) and are governed by the Major Port
Trusts Act, 1963 which enables them to conduct regulatory and commercial functions.
The intermediate and minor ports are administratively under the state governments and
are governed by the Indian Ports Act 1908, which delineates the regulatory power of the
Port Authority. Other acts applicable to the port sector includes The Dock Workers
(Regulation and Employment) Act 1948 and Dock Workers (Safety, Health and Welfare)
Act of 1986 which regulates the conditions of employment, service and other matters
relating to dock workers.
To increase the productivity and efficiency of the ports, the government has announced
the following measures:

The powers of the Port Trust Boards to sanction projects have been increased to Rs 50
crores in case of additional/new investments and to Rs 100 crores in case of
replacement/renewal of assets.

The Major Port Trust Act, 1963 was amended by Port Laws (Amendment) Act, 1997 to
provide an independent Tariff Authority for Major Ports (TAMP) for fixing and revising
the port tariff.

To provide greater freedom and flexibility to the major ports, the government in the
Union Budget 2000–2001 has recommended corporatisation of major ports.

In May 2000 the Major Port Trusts Act 1963 has been amended to enable the major ports
to enter into joint ventures with minor ports. The joint venture between major and minor
ports can enhance the traffic handling capacity by diverting the traffic to the minor ports
since the major ports have already reached a saturation level.

The major ports are allowed to enter into joint ventures with foreign ports and foreign
companies. Foreign direct investment in port projects is now allowed up to 100 per cent
equity.

An Empowered Committee on Environment Clearances (ECEC) has been constituted in

the MOST to provide simplified and transparent guidelines for environment clearance for
the expansion of existing port limits.

Ports in Indian Shipping Industry

India has a long coastline spanning 7600 kilometres forming one of the biggest
peninsulas in the world. It is serviced by 12 major ports and 185 notified minor and
intermediate ports [citation needed].

Major ports handled over 80% of all cargo traffic in 2007. However, the words "major",
"intermediate" and "minor” do not have a strict association with the traffic volumes
served by these ports. As an example, Mundra Port, a newly developed minor port in the
state of Gujarat registered a cargo traffic of around 28.8 million tonnes per annum during
the financial year of 2008, which is higher than that of many major ports.
The classification of Indian ports into major, minor and intermediate has an
administrative significance. Indian government has a federal structure, and according to
its constitution, maritime transport falls under the "concurrent list", to be administered by
both the Central and the State governments. While the Central Shipping Ministry
administer the major ports, the minor and intermediate ports are administered by the
relevant departments or ministries in the nine coastal states of West Bengal, Orissa,
Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa, Maharashtra and Gujarat. Several
of these 185 minor and intermediate ports are merely "notified", with little or no cargo
handling actually taking place. These ports have been identified by the respective
governments to be developed, in a phased manner, a good proportion of them involving
partnership there are also 7 shipyards under the control of the central government of
India, 2 shipyards controlled by state governments, and 19 privately owned shipyards.
The major ports handled 423.4 million tons of cargo for the financial year 2005-2006,
with Vishakhapatnam, Cochin ,Kolkata Port, Chennai Port and Kandla carrying the
greatest tonnage. Major ports can collectively handle 400+ million tons of cargo
annually, and port operations have improved since the mid-1990s. All major ports, except
one (Ennore Port), are government administered, but private-sector participation in ports
has increased.

LOCATION OF PORTS IN INDIA

Introduction of Jawaharlal Nehru Port
Pandit Jawaharlal Nehru laid the foundation stone of the Port on January 3, 1962.
Construction work commenced in November 19, 1962 and dredging operations from
March 15, 1964. During this period the Port was in the control of the government of
Orissa. The management was formally handed over to the Government of India on June
1, 1965. The Port was declared eight major ports on April 18, 1966 making it the first
Major Port in the East Coast commissioned in Independent India.

The Port was opened to traffic in 1966. The main cargo handled was Iron Ore. Paradip
Port has come a long way since then and its cargo profile has greatly increased. The Port
started handling containers and transhipment of petroleum products in 1991.The Port is
connected with Board Gauge Railway System of the South Eastern Railway. The Port is
served by National highway No. 5-A.

Pandit Jawaharlal Nehru laid the foundation stone of the Port on January 3, 1962.
Construction work commenced in November 19, 1962 and dredging operations from
March 15, 1964. During this period the Port was in the control of the government of
Orissa. The management was formally handed over to the Government of India on June
1, 1965. The Port was declared eight major ports on April 18, 1966 making it the first
Major Port in the East Coast commissioned in Independent India.

The Port was opened to traffic in 1966. The main cargo handled was Iron Ore. Paradip
Port has come a long way since then and its cargo profile has greatly increased. The Port
started handling containers and transhipment of petroleum products in 1991.The Port is
connected with Board Gauge Railway System of the South Eastern Railway. The Port is
served by National highway No. 5-A.

Introduction of Visakhapatnam Port

The need for a port in this part of the country was emphasised as early as in 1858 in a
report of a British Survey Party. This was underlined in the report titled “Vizag, the Port
of Central Provinces” (1877). Mr. E.S. Thomas, while submitting the proposals for
creation of the port in 1872 described it as the most natural and most easily formed port’
on the east coast of India. The daughter of Sir Arthur Cotton described the Harbour as a
natural outlet for northern India by a direct railway to Allahabad and observed the
location as a strategic point on the eastern coast where incomparably the `best harbour’
can be made by a single break-water run out from the bold promontory of the Dolphin’s
Nose.

It was only in 1914 that the proposal for construction of a harbour at Visakhapatnam was
initiated by the then Bengal Nagpur Railway and in 1922 a proposal of Col. H.
Cartwright Reid of British Admiralty for the construction of a harbour at the mouth of
river Meghadrigedda was adopted.

The construction work which started in 1927 continued up to 1933 and the first
commercial vessel S.S. JALADURGA of M/s. Scindia Steam Navigation Co. entered the
Port on the 7th October, 1933 providing initially a sea outlet for Manganese Ore.

The Saga of the construction of the harbour particularly forming of entrance channel,
sinking of two old ships `JANUS’ and `WELLESDONE’ to form break-water instead of
building a wall in the sea were all feats in engineering and are subjects of discussion even
today. Mr. Ash and Mr. D.B. Ratternberry were the Engineers who played prominent
role in constructing this beautiful harbour. The port was formally inaugurated by His
Excellency Lord Willingdon, the then Viceroy and Governor General of India on 19th
Dec. 1933.

Nestling among a chain of hills, the Vizag harbour is really one of the wonders of the
nature, as if it has been intended by God that a man in this area must benefit by a very
safe anchorage to ships. The entrance channel is protected by, two massive rock hills,
namely Dolphin’s Nose on the Southern side and Ross Hill on the Northern side and
these two hills shelter a bay which possessed sufficient depth for the ships which were
engaged in sea trade up to 1950s. The high promontory of the Dolphin’s Nose hill into
the sea provides protection from cyclones which strike the East Coast. The low tidal
range of a maximum of 1.82 mtrs is also advantageous for the location of the Port. The
existence of this natural harbour has transformed the sleepy fisherman village once called
as `Vizag’ into one of the fastest growing industrial cities of the world.

The Port has striking similarities with Durban Port of Africa in the sense that the later is
also surrounded by a hill on the South Side. It is due to this reason that Engineer Mr.
W.C. Ash studied Durban Port before developing this Port. Mr. Chalapathi Rao, one of
the famour writers described the Docks and Harbour works of this Port as `PICASSO’s
cubist pictures.

STATICAL DATA OF PORTS

Cargo Handled Vessel Container Traffic

Name (06-07) '000 Traffic (05- (05-06) '000
tonnes 06) TEUs

Visakhapatnam 56,386 2,109 47

J.N.P.T. 44,818 2,395 2,267

RESEARCH OBJECTIVE:-

• To compare the financial performance of Jawaharlal Nehru Port with

Vishakhapatnam Port.
• To compare the operating income of Jawaharlal Nehru Port with Vishakhapatnam
Port.

• To compare the operating expenditure of Jawaharlal Nehru Port with

Vishakhapatnam Port.

• To compare the operating ratio of Jawaharlal Nehru Port with Vishakhapatnam

Port.

• To compare the total income of Jawaharlal Nehru port with Vishakhapatnam Port.

METHODOLOGY –

• The present research work is analytical study to have the knowledge of concern
industry, with the help of secondary source; therefore following methodology will
be applied to complete the project.
• Type of Research: - Descriptive and Analytical

• Data Collection Method: - Secondary Source

• Source of Secondary Data: - CMIE Data Base i.e. Prowess and Industry
Analysis Service

• Statistical Tools: - Bar Graph, Pie Chart apart from these during the studies other
tools like mean, regression etc. could be applied if required.
 FINDINGS

FINDINGS

Table 1
 OPERATING INCOME OF JAWAHARLAL NEHRU PORT & VISAKHAPATNAM PORT

Port(value in crore rupees) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 427.56 454.29 501.87 528.46 533.75

Jawaharlal Nehru port 459.81 579.61 630.09 670.32 802.79

GRAPH 1
 OPERATING INCOME OF PORT'S

900
800
700
Rs(In crores)

600
500 Visakhapatnam port
400 Jawaharlal Nehru port
300
200
100
0
2003 2004 2005 2006 2007
YEAR

INTERPRETATION:-

From the above graph it is clear that Operating Income of Visakhapatnam Port is

Increasing continuously from Mar 03 to Mar 07. The Operating Income of Jawaharlal

Nehru Port is also increasing successively from Mar 03 to Mar 07 and its value is very

high in comparison to Visakhapatnam Port.

Table 2

OPERATING EXPENDITURE OF JAWAHARLAL NEHRU PORT & VISAKHAPATNAM

PORT

Port(Value in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 221.28 224.65 223.53 243.1 246.78

Jawaharlal Nehru port 213.18 234.06 271.81 270.33 287.95

GRAPH 2
 OPERATING EXPENDITURE OF PORT'S

350
300

250
Rs(In crores)

200 Visakhapatnam port

150 Jawaharlal Nehru port

100

50
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From the above Graph it is clear that the Operating Expenditure of Jawaharlal Nehru

Port is more in comparison to Visakhapatnam Port .From Mar 03 the operating

Expenditure of Jawaharlal Nehru Port is increasing continuously but between Mar 06 to

Mar 07 the growth is more. Visakhapatnam Port expenditure is more as compared to

Jawaharlal Nehru Port in Mar 03 but in Mar 04 Jawaharlal Nehru Port’s expenditure is

More. In Mar 05 its expenditure decreases but increases in Mar 06 to Mar 07

Successively.
Table 3

SALRIES & WAGES OF JAWAHARLAL NEHRU PORT &

VISAKHAPATNAM PORT

Port(Value in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 88.35 91.33 80.54 86 96.76

Jawaharlal Nehru port 213.18 234.06 271.81 270.33 287.95

GRAPH 3

SALARIES & WAGES OF PORT'S

350
300
250
Rs(In crores)

200 Visakhapatnam port

150 Jawaharlal Nehru port

100

50
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From the above graph it is clear that the salaries and wages expense of Visakhapatnam

Port is more and very large in comparison to Jawaharlal Nehru Port. In Mar 03 the
 Salaries and wages expense of Jawaharlal Nehru Port is Rs.33.74 Crore and then it

Increases successively

Table 4

DEPRECIATION EXPENSES OF JAWAHARLAL NEHRU PORT & VISAKHAPATNAM

PORT
Port(value in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 25.72 26.86 28.38 31.25 31

Jawaharlal Nehru port 36.77 29.13 30.66 30.12 30.63

GRAPH 4

DEPRECIATION EXPENSES OF PORT'S

40
35
30
Rs(In crores)

25
Visakhapatnam port
20
Jawaharlal Nehru port
15
10
5
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From the above graph it is clear that the depreciation expense of Jawaharlal Nehru port is

Rs. 36.77 Crore in Mar 04 and then it decreases upto Mar 07 the depreciation expense of
 Visakhapatnam Port is Rs. 25.72 Crore in Mar 03 and then it increases upto Mar 07 .The

Depreciation expenses of Visakhapatnam Port are more than that of Jawaharlal Nehru
Port.

Table 5

OPERATING & MAINTENANCE EXPENSES OF JAWAHARLAL NEHRU PORT &

VISAKHAPATNAM PORT
Port(valu in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 36.19 40.53 46.5 47.01 45.91

Jawaharlal Nehru port 119.9 138.39 169.66 157.17 166.44

GRAPH 5

OPERATING & MAINTENANCE EXPENSES OF

PORT'S

180
160
140
Rs(In crores)

120
100 Visakhapatnam port
80 Jawaharlal Nehru port
60
40
20
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-
 From the above graph it is clear that the operation and Maintenance of Jawaharlal Nehru

Port more than the Visakhapatnam port and the difference is very large. The operation

And maintenance expense of Jawaharlal Nehru Port is Rs. 119.9 crore in Mar 03 and it

Increase successively up to Mar07 and its value is Rs. 166.44 Crore.The operation and

Maintenance expense of Visakhapatnam Port is Rs. 36.19 Crore in Mar 03 and then it

Increases up to Mar 06 and it suddenly decreases In Mar 07 its value is Rs. 45.91 Crore.

Table 6
 SECURITY & MEDICAL EXPENSES OF JAWAHARLAL NEHRU PORT &
VISAKHAPATNAM PORT

Port(value in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 19.27 20.44 19.3 23.09 22.89

Jawaharlal Nehru port 6.63 9.61 10.05 12.99 13.99

GRAPH 6

SECURITY & MEDICAL EXPENSES OF PORT'S

25

20
Rs(In crores)

15
Visakhapatnam port
Jawaharlal Nehru port
10

0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-
 From the above graph it is clear that the Security and Medical Expense of

Visakhapatnam Port Visakhapatnam Port is increases from Mar 03 to Mar 04 .In Mar 04

Its value is Rs. 20.44 crore then it decreases ion Mar 05 and then increases in Mar 06 and

Slightly decreases in Mar 07 .The Security and Medical Expense of Jawaharlal Nehru

Port is also increases continuously from Mar 03 to Mar 07 .Its values in Mar 07 is Rs.

13.99 Crore .Overall the Security and Medical Expense of Visakhapatnam Port is more

In comparison to Jawaharlal Nehru Port.

Table 7
 DREDGING EXPENSES OF JAWAHARLAL NEHRU PORT &
VISAKHAPATNAM PORT

Port(value in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 33.58 11.59 6.91 6.95 18.76

Jawaharlal Nehru port 7.11 8.38 9.35 12.85 11.19

GRAPH 7
 DREDGING EXPENSES OF PORT'S

40
35
30
Rs(In crores)

25
Visakhapatnam port
20
Jawaharlal Nehru port
15
10
5
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From the above graph it that the expenditure on dredging in Mar 03 is Rs.7.11crore and

Then it goes on increasing up to Mar06 and its value is Rs. 12.85 Crore and then it

Decreases in Mar 07 .The expenditure on dredging of Visakhapatnam port is Rs. 33.58

Crore in Mar 03 and then it decreases up to Mar 06 and then it increases in Mar 07. The

Expenditure on dredging in Mar 07 of Visakhapatnam Port is high in mar 07 and it is

Large as compared to Jawaharlal Nehru Port

Table 8

OPEARTING SURPLUS OF JAWAHARLAL NEHRU PORT &

VISAKHAPATNAM PORT

Port(value in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 206.28 229.64 278.34 285.36 286.97

Jawaharlal Nehru port 246.63 345.55 358.28 399.99 514.84

GRAPH 8

OPERATING SURPLUS OF PORT'S

600

500
Rs(In crores)

400
Visakhapatnam port
300
Jawaharlal Nehru port
200

100

0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-
 From the above graph it is clear that the operating surplus of Jawaharlal Nehru Port

Increasing successively from Mar 03 to Mar 07 but there is remarkable increase from

Mar 06 to mar 07.In comparison to Jawaharlal Nehru Port the Operating Surplus Of

Visakhapatnam Port is increasing successively from Mar 03 to Mar s07. Overall the

Operating Surplus Jawaharlal Nehru Port is more.

Table 9
 OPEARTING RATIO OF JAWAHARLAL NEHRU PORT &
VISAKHAPATNAM PORT

Mar- Mar- Mar- Mar- Mar-

Port (value in %) 03 04 05 06 07

Visakhapatnam port 51.75 49.45 44.54 46 46.24

Jawaharlal Nehru port 46.36 40.38 43.14 40.33 35.87

GRAPH 9
 OPERATING RATIO OF PORT'S

60
PERCENTAGE 50

40
Visakhapatnam port
30
Jawaharlal Nehru port
20

10

0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From the above Graph it is clear that the operating ratio of Jawaharlal Nehru Port in Mar-

03 is less than that of Visakhapatnam Port. The operating ratio of Jawaharlal Nehru then

Decreases in Mar 04 and suddenly increases in Mar -05 and then decreases from Mar -06

To Mar- 07. In comparison to Jawaharlal Nehru Port the Operating Ratio of

Visakhapatnam Port decreases From Mar- 03 to Mar- 07 .Overall the Operating Ratio of

Visakhapatnam Port is more than that of Jawaharlal Nehru Port.

 Table 10

FINANCIAL & MISCELLANEOUS INCOMEOF JAWAHARLAL NEHRU PORT &

VISAKHAPATNAM PORT

Port(value in crores)) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 14.05 11.12 14.64 14.43 20.93

Jawaharlal Nehru port 93.42 68.93 82.75 88.98 104.63

GRAPH 10
 FINANCIAL & MISCELLANEOUS INCOME OF
PORT'S

120

100
Rs(in crores)

80
Visakhapatnam port
60
Jawaharlal Nehru port
40
20

0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From above graph it is clear that the financial and miscellaneous income of Jawaharlal

Nehru port increases successively from march- 03 to march-07 in comparison Jawaharlal

Nehru port the financial and miscellaneous income of Visakhapatnam port decreases in

March- 04and then slightly increases from march-05 to march-07 .overall financial and

Miscellaneous income of Jawaharlal Nehru port is very large as compare to

Visakhapatnam

Port.
Table 11

FINANCIAL & MISCELLANEOUS EXPENDITURE OF JAWAHARLAL

NEHRU PORT
& VISAKHAPATNAM
PORT

PORT(value in crores) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 162.76 162.94 282.5 144.63 186.02

Jawaharlal Nehru port 212.11 211.11 195.19 72.04 162.57

GRAPH 11

FINANCIAL & MISCELLANEOUS EXPENDITURE OF PORT'S

300

250
Rs(In crores)

200
Visakhapatnam port
150
Jawaharlal Nehru port
100

50

0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From the above graph it is clear that the financial and miscellaneous expenditure of
 Jawaharlal Nehru Port is more than that of Visakhapatnam Port .In Mar 03 the financial

And miscellaneous expenditure Jawaharlal Nehru Port decreases from Mar 03 to Mar 07.

In comparison to this the financial and miscellaneous expenditure Jawaharlal Nehru Port

Also decreases from Mar 03 to Mar 04 then it slightly increases in Mar 05 then it

Decreases in Mar 06 and then increases in Mar 07

Table 12
 TOTAL INCOMEOF JAWAHARLAL NEHRU PORT &
VISAKHAPATNAM PORT

Mar- Mar- Mar- Mar- Mar-

Port(value in crores)) 03 04 05 06 07

Visakhapatnam port 441.61 465.41 516.51 542.89 554.68

Jawaharlal Nehru port 553.23 648.54 712.84 759.3 907.42

GRAPH 12
 TOTAL INCOME OF PORT'S

1000
900
800
700
Rs(in crores)

600
Visakhapatnam port
500
Jawaharlal Nehru port
400
300
200
100
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

From the above graph it is clear that the total income of Jawaharlal Nehru Port increases

Successively from Mar 03 to Mar 07 .In comparison to Jawaharlal Nehru l Nehru port

The total income of Visakhapatnam Port also increases from Mar 03 to Mar 07 .Overall

The total income of Jawaharlal Nehru Port is more than the Visakhapatnam Port.
Table 13

TOTAL EXPENDITUREOF JAWAHARLAL NEHRU PORT &

VISAKHAPATNAM PORT

Port(value in crores)) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 384.04 387.59 506.03 387.73 432.8

Jawaharlal Nehru port 425.29 445.17 467 342.37 450.52

GRAPH 13

TOTAL EXPENDITURE OF PORT'S

600

500
Rs(in crores)

400
Visakhapatnam port
300
Jawaharlal Nehru port
200

100

0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR
INTERPRETATION:-

From the above graph it is clear that the total expenditure of Jawaharlal Nehru port in

Mar03 is Rs. 425.29 Croce it increases successively uptoMar05 and then it decreases in

Mar 06 and then increases in Mar07.VIshskhapatnam total expenditure is increasing

From Mar 03 to Mar 05. There is remarkable increase from Mar 04 to Mar 05 Then it

Decreases in Mar 06 and then increases slightly in Mar 07.

Table 14

NET SURPLUS OF JAWAHARLAL NEHRU PORT & VISAKHAPATNAM

PORT

Port(value in crores)) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Visakhapatnam port 57.57 77.82 10.48 155.16 121.88

Jawaharlal Nehru port 127.94 203.37 245.84 416.93 456.9

GRAPH 14
 NET SURPLUS OF PORT'S

500
450
400
350
Rs(in crores)

300
Visakhapatnam port
250
Jawaharlal Nehru port
200
150
100
50
0
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07
YEAR

INTERPRETATION:-

Form the above graph it is clear that Net Surplus of Jawaharlal Nehru Port is increasing

From Mar 03 to Mar 07 .The net surplus of Visakhapatnam Port is very less as compared

To Jawaharlal Nehru Port the Net Surplus of Visakhapatnam Port increases from Mar

03 to Mar 04 it decreases in Mar 05 and then increases in Mar 07 .Overall the Net

Surplus of Jawaharlal Nehru Port is more.

ANALYSIS
 ANALYSIS

1. Total Income Performance :-

The total income of Jawaharlal Nehru Port increases successively from Mar 03 to Mar

07 .In comparison to Jawaharlal Nehru l Nehru port the total income of Visakhapatnam

Port also increases from Mar 03 to Mar 07 .Overall the total income of Jawaharlal Nehru

Port is more than the Visakhapatnam Port.

2. Total Expenditure Performance :-

3. Financial & Miscellaneous Income Performance :-

The financial and miscellaneous income of Jawaharlal Nehru port increases successively
 From march- 03 to march-07 in comparison Jawaharlal Nehru port the financial and

Miscellaneous income of Visakhapatnam port decreases in March- 04and then slightly

Increases from march-05 to march-07 .overall financial and miscellaneous income of

Jawaharlal Nehru port is very large as compare to Visakhapatnam port.

4. Financial & Miscellaneous Expenditure Performance :-

The financial and miscellaneous expenditure of Jawaharlal Nehru Port is more than that

Of Visakhapatnam Port .In Mar 03 the financial and miscellaneous expenditure

Jawaharlal Nehru Port decreases from Mar 03 to Mar 07. In comparison to this the

Financial and miscellaneous expenditure Jawaharlal Nehru Port also decreases from Mar

03 to Mar 04 then it slightly increases in Mar 05 then it decreases in Mar 06 and then

Increases in Mar 07

5. Operating Ratio Performance :-

From the above Graph it is clear that the operating ratio of Jawaharlal Nehru Port in Mar-

03 is less than that of Visakhapatnam Port. The operating ratio of Jawaharlal Nehru then

Decreases in Mar 04 and suddenly increases in Mar -05 and then decreases from Mar -06

To Mar- 07. In comparison to Jawaharlal Nehru Port the Operating Ratio of

Visakhapatnam Port decreases From Mar- 03 to Mar- 07 .Overall the Operating Ratio of

Visakhapatnam Port is more than that of Jawaharlal Nehru Port.

6. Dredging Expenditure Performance:-

The expenditure on dredging in Mar 03 is Rs.7.11 crore and then it goes on increasing

Up to Mar06 and its value is Rs. 12.85 Crore and then it decreases in Mar 07 .The

Expenditure on dredging of Visakhapatnam port is Rs. 33.58 Crore in Mar 03 and then it

Decreases up to Mar 06 and then it increases in Mar 07. The expenditure on dredging in

Mar 07 of Visakhapatnam Port is high in mar 07 and it is large as compared to

Jawaharlal Nehru Port.

7. Performance In Operation & Maintenance:-

The operation and Maintenance of Jawaharlal Nehru port more than the Visakhapatnam

Port and the difference are very large. The operation and maintenance expense of

Jawaharlal Nehru Port is Rs. 119.9 crore in Mar 03 and it increase successively up to

Mar07 and its value is Rs. 166.44 Crore. The operation and maintenance expense of

Visakhapatnam Port is Rs. 36.19 Crore in Mar 03 and then it increases up to Mar 06

And it suddenly decreases In Mar 07 its value is Rs. 45.91 Crore.

CONCLUSION
 CONCLUSION

After analysing the whole data we can conclude that JAWAHARLAL NEHRU PORT is
performing better than VISAKHAPATNAM PORT in respect of total income, total
operating surplus, & even in the respect of operations & maintenance.

Now when we talk about the operating ratio performance, we can conclude that
VISAKHAPATNAM PORT has performed better than JNPT.

Now when we talk about the Dredging Expenses performance, we can conclude that
VISAKHAPATNAM PORT expenses more than JNPT.
SUGGESTION
 SUGGESTION & RECOMMENDATION

In respect of the suggestion should be given regarding the both of the ports there is no
such point to be pointed out because both the ports are performing better according to
there strength. But the only point is that of the operating ratio, in this case JNPT has to
improve little bit more as comparing it with the VISAKHAPATNAM PORT. Because in
this case VISAKHAPATNAM PORT has shown there best performance rather than in
any other case.

So I would like to recommend that JNPT has to take some specific steps or to implement
some strategies regarding the enhancing of there Operating Ratio so that the ultimate
results should come in front of us.
LIMITATIONS
 LIMITATIONS

Though this study provides better knowledge about this field but still it has some

Limitations:

1. Due to short span time, study could not be so deep.

2. Due to data collected much earlier of submission of project report, the most current

Data could not be well presented.

3. Only CMIE has been used as a source of data. Other source has been ignored.
 Bibliography:-

• CMIE DATA BASE (PROWESS)