Icra optimistic on cargo growth outlook at Indian ports

A report by rating agency Icra said cargo growth outlook for ports in India continues to be strong over the medium- to long-term driven by the rising coal requirement.

But the report warned that major ports would continue to suffer from issues on capacity and efficiency because slow pace of project implementation.

Capacity addition in major ports is affected by a host of issues including statutory clearances, the report said, while acknowledging that there is improvement in the award of projects.

The report said the increase in the award of new projects in major ports fails to translate into actual boost to capacity owing to delay in execution of these projects.

Given that no near term resolution of these structural problems appears to be in sight, the capacity addition at Indian ports is likely to fall short of envisaged targets and demand requirements, it said.

Meanwhile, the report said non-major ports, by virtue of their superior cargo handling infrastructure, large capacity and high operating efficiency, will be well-placed to wean traffic away from major state-run ports as well as garner a larger proportion of the incremental cargo.