India needs to learn lessons from the UAE and develop adequate high quality back up facilities for storage and warehousing to enable the global players do international trade through our ports, Pankaj Modi, Chief Operating Officer, Adani Ports and SEZ, tells Sumantra Das.
Why has India not realised the potential of port SEZs or free zones?
Port-based large SEZs should have world-class infrastructure facilities including road/rail connectivity, adequate back up facilities for storage and warehousing of cargo, etc. However, a majority of our sector-specific SEZs are in IT/ITES, and small in size. Hence, creating some large port-based SEZs have not found the focus.
Railway connectivity to ports has been a major constraint due to limitation of capacity, particularly on the Delhi-Mumbai railway route. Government’s initiatives such as Dedicated Freight Corridors for Delhi-Mumbai and Delhi-Kolkata routes, involvement of private sector in container train operations, and wagon ownership for container cargo traffic will help improve the competitiveness. The private sector needs to work closely with governments to expedite such developments keeping pace with increased cargo traffic.
What can Indian ports learn from their counterparts in the UAE in establishing FZs?
Ports in the UAE have developed large back-up areas, where mainly international trading and warehousing activities are being carried out. The storage facilities are located near to the ports, where storage and warehousing of cargo to and from the UAE is encouraged through hassle-free movements. Because of well-built infrastructure facilities and simpler procedural formalities, the international trade is flourishing in the UAE. This has led to many companies creating their strategic storage facilities in these zones. Moreover, due to good port infrastructure facilities coupled with storage infrastructure, UAE ports have attracted huge transhipment business.
India needs to learn lessons and develop adequate high quality back up facilities for storage and warehousing to enable the global players to do international trade through our ports. Such overseas parties can store the goods in the port back up area and export it to various countries, making Indian port based SEZs as their distribution centre. Further, for a sustained and rapid growth of foreign trade, there is an urgent need for concerted efforts to improve and integrate infrastructure.
Since land is not a big issue for port projects, can port developer own and lease adjoining land to private free zone developer forming a new PPP model?
Ports which have land banks in close proximity can develop free trade zones either by themselves or through PPP model. In certain cases, PPP model will help attracting investments into creation of infrastructure and offer efficiency at competitive cost.
While other port-based SEZs/free zones in the country finding it difficult to sustain, how is your SEZ becoming a success story?
Mundra becomes a natural gateway to the northern and western hinterland of India which contributes almost 65 per cent of India’s GDP.
Ours is the only SEZ which has multimodal connectivity and requisite infrastructure for supporting all types of industries. Due to availability of key infrastructure facilities, it is ideally suited for large industries like heavy engineering, refineries, petrochemicals, defence product manufacturers, steel plants, etc.
The developer has also planned cluster-based development, where various units from a particular sector are accommodated in an earmarked area so that they all get benefit of common infrastructure facilities pertaining to that sector.
Adani Port & SEZ, in Gujarat’s Gulf of Kutch, is connected to the Indian Railway network through a double line network that APSEZ has developed, and well connected through a road network to national and state highways. The attached Mundra port is connected through a dedicated pipeline network extending up to northern India.