Despite various bottlenecks in the container shipping business in India, Julian Bevis, area line and operations manager, South Asia, Maersk Line, feels India is an interesting place to invest and has plans to expand the company's footprint.
"India is a very important market, with a robust democracy, track record of economic growth and immense opportunities, and in the coming years, we look at increasing our focus here," Bevis said.
As containerisation offers cost advantage, it is fast becoming one of the facilitators of economic growth. However, the biggest bottleneck is the growth in infrastructure, which is not happening at the same pace as that of trade, he said.
According to an India Infoline report, the share of container traffic has increased from 11.5 percent to 16 percent in fiscal 2007 and is expected to go up to 23 percent by 2011. This demands a concurrent increase in container terminals, as by 2008 all the terminals are expected to be out of capacity.
The demand for container terminal unveils a great opportunity, which Maersk is all set to grab and is looking at investing in ports and container terminal supply.
The company has short-listed Maharashtra, Gujarat and Tamil Nadu, as these areas are already seeing a deficiency in container terminal supply. Bevis noted that the investment details are being studied and future deployments would be worked out.
Maersk Line operates a container terminal at JNPT and owns and operates a small port at Pipavav in Gujarat. It contributes about 10 percent to the total revenue of Maersk.
Although the status quo on Indian container shipping and port sector is improving, a lot more needs to be done, he said, adding that infrastructure in the form of road and rail connectivity, warehousing facilities also needed to be built. There is a great deal of paperwork required for trade, which also adds to the cost of transport, he said.
Attracting more investors to invest in the container terminal supply is yet another aspect the government needs to look into, he said.
With his experience as the chairman of Container Shipping Lines Association of India, Bevis felt, "Working towards getting the investors their adequate returns could help and eventually ease the shortage."
He said the tariff authorities need to do a balancing act where the investors are getting their returns, while the ports are providing value for money trade.
Apart from terminals, Maersk is set to invest across the board in infrastructure opportunities such as container freight stations (CFS), railway connectivity; back office work and in building seafarer training facilities.
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