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A new logistics park is on the anvil at JNPT

A new logistics park is on the anvil at JNPT

JNPT is examining the setting up of a new logistics park in JV with the DFC. Albeit mired by delays, the port’s expansion plans envisage an augmentation of nearly 5 mn containers each year.Luxman Radhakrishnan, Chairman, JNPT, explains to Shashidhar Nanjundaiah.

What is the status of the port’s expansion?
We are using existing land for the current expan­sion fourth Terminal (which will handle 4.8 million containers more per annum) and acquiring 1,250 acre on Nhava island for the next phases for which we are en­ga­ging Scott Wilson to prepare the detailed project report.

What are the specs for the 4th Terminal?
It will be 2 km long with state-of-the-art equipment; we are also dredging the channel down to 14 m first and then 17 m, so that the biggest ships in the world with up to 15,000 TEU capacity can come into the port. We have estimated [a cost of] around Rs 1,600 crore for 1st phase dredging. The second phase will cost Rs 4,500 crore.

What is the status of the SEZ? Do you expect it will take off better on the basis of an expanded terminal?
We are starting land development this year and within a year we will be able to develop the land. We are developing 3,000 acres eventually, but will go to the market with about 700 acre initially and then gradually ramp it up in phases.  We do not want to have the market crash and I do not want land to go in one shot.  

Do  you have any sectors in mind for the SEZ?
Yes. Sectors which add to our container business, and those that give maximum returns.  For example, we are investing Rs 6,000 crore into dredging, where the Internal Rate of Return (IRR) is low and we do not get money back. We need to marry it with other projects so our cash flows are balanced. We try to manage projects in such a way that we do not have to go to the government ever [for funds].

Do you have some specific sectors in mind?
Several sectors are there. We will announce as and when the time comes.We would have some for sectors which will give maximum returns to us and to some sectors which will add to our container numbers.

Infrastructure in India comes after growth, and JNPT has been no exception. Let’s talk about your decongestion plans.
Decongestion of JNPT by higher capacity should ha­ve been done 10 years ago. In the last year and a half, we ha­ve taken on nine projects of Rs 4,5000 crore.There is a long gestation period for projects in India, and if some­thing can go wrong it will. So I am planning for 2-3 levels of, let us say, safety nets. If one does not happen another will.

Internationally, a port does not work at more than 70 per cent capacity.We should never have a ship waiting for a berth, a berth should be waiting for the ship.You have very high value equipment as a ship and if it is idling, you can imagine the heavy losses that will be passed on to the consumers eventually. So you have to have enough capacity so that even if some ship is coming late, as there has been some problem, we should be able to accommodate it. It is like hotel rooms. If there is 100 per cent occupancy, customer satisfaction may fall due to non-availability when needed.

About 8,000-10,000 container lorries leave my port daily. That is going to double or triple in 3-5 years.We are trying to divert as much as possible from roads to rail to reduce fuel costs, damage to environment and accidents on the road.

How else will you be gearing up for the Dedicated Freight Corridor (DFC) in terms of your port itself?
We are going in for a JV with DFC Corporation for a logistics park and they are working on it. DFCC have engaged a consultant to advise on this. In our few meetings, we are considering to offer 100 acres of land, while DFCC will provide the funds/technology. We can also put in money if required.We plan to have a logistics park that will be one of the best in the world. 

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