Ports, not TAMP, will be in charge of setting their own tariffs

Regulatory and clearance delays may be necessary evils in infrastructure projects, especially those under PPP. But as N Muruganandam, Joint Secretary, Union Ministry of Shipping, elaborates, the government's ambitious plans of port infrastructure development in the coming years may also be accompanied by some ironing out of those issues.

What are the long term goals the Ministry of Shipping has set for the development of ports and allied infrastructure to meet the increasing demand of cargo traffic?
We have set the proactive plan of Maritime Agenda 2020. We have a current capacity of handling around 2,300 million metric tonne per annum (mtpa) of cargo at our ports. The Maritime Agenda has set a target of achieving three times more capacity at Indian ports. The Maritime Agenda 2020 includes both major ports and private ports. Last year we added 136 mt and this year it is our target to add 282 mt.

On the efficiency part, we are focusing on container cargo and there is a phenomenal growth in container terminals. So aiming at developing more container terminals, we have started the process of establishing one at Jawaharlal Nehru Port Trust (JNPT). Similarly, we are going to develop four more container terminals. We will be setting up a container terminal at Diamond Harbour in Kolkata, and are also planning a container terminal in Kandla in Gujarat. We foresee a lot of growth in container cargo.

Coal handling is another key area we plan to focus on. There is a lot of coal import on the west and east coasts. In order to handle bulk coal cargo, we are focusing on setting up coal cargo terminals. In Haldia Docks in Kolkata, we are planning two and similarly we have awarded projects in Ennore, Vizag and Kandla also.

We are planning to increase the capacity across the port facilities and providing a lot of impetus to mechanisation, which will improve handling efficiency at our ports. We are setting up mobile harbour terminals at many ports. We are working on this project in Kandla and Kolkata.

We are also planning to develop deep ports. Currently, most of our ports have a draft of only 12 m, so very big vessels cannot actually come in. The size of the ships is increasing with the time. So we have been planning to increase draft at our ports and are going systematically.

In JNPT, the draft is only 12 m. We have given out a project to increase the draft and will be achieved by March 2014ùin the second phase, the draft will be 17 m. In Ennore, we are working to increase it from 16 m to 18 m. We are also working in Vizag and Kandla to increase draft while the work has completed in Cochin. We aim to have a minimum draft of 14 m at all our ports, while the draft will be 17 m at the bigger ports.

In addition, two major ports, one in Andhra Pradesh and the other in Karnataka, will be completed in the next four years, and will contribute 120 mtpa.

Regulatory issues have not only delayed infrastructure projects, but also increased the cost. How do you see this situation improving?
We have to face three kinds of regulation: environmental clearances, security clearances and tariff regulations.

As ports are developed in the coastal areas, environmental clearance is crucial. No one can play around with those norms. On the other hand, security clearances take time. We are streamlining the issue and have sent a proposal to the Cabinet. And the Cabinet has set a time frame of two or three months and some modifications will be made.

There was a lot of delay from Tariff Authority for Major Ports (TAMP) in the past. Now we are coming out with new guidelines, where we are giving some sort of freedom to the ports and the public-private-partnership (PPP) operators from the control of TAMP. They can fix their own tariff with respect to the market terms. That will certainly ease the time lags.

How is your ministry applying PPP model and incorporating the private players?
We have been following PPP since 1990, and in the last five years it has been our main model. Almost 80 per cent of our port infrastructure is being developed through PPP and only remaining 20 per cent is done through their own resources. In the future, we are going to triple our capacity as mentioned, through PPP, not only in terms of investment, but also its efficiency, management and all related things is being done through the PPP mode.