Benchmarking helps organisations to continuously improve. This applies to India's major ports as well. The Port of Rotterdam, in its report on "Co-ordination of Business Plans for Major Ports in India", has made a comparison of Indian ports with those in Northwest Europe. The Report throws up some interesting facts.
In India there are 12 major ports in the Kandla-Kolkata range, over a coastline of some 7,000 km, while the so-called H-H range (Hamburg-Le Havre) in North-West Europe covers 11 major ports over a coastline of just 1,000 km.
Worldwide, the trend with respect to port infrastructure is that port development takes place in deeper water because of the predominantly large vessels calling at foreign ports. The economy of scale is applied, with the focus on reducing the costs per unit, which allow for larger projects. Industrial clusters are established to obtain synergies and notch up higher efficiency, and logistics clusters are established in or near ports to provide the necessary linkages, especially given the increasing role and needs of the private sector.
It is also clear by now that the trend towards economy of scale fits in well with the Indian situation. However, the availability of natural deep water ports is a problem, though there is room for large-scale industrial and logistics clusters. The Government also promotes the expanding role of the private sector. Hence, the various boundary conditions for Indian ports to be transformed into world-class facilities do exist, but there is still a major effort to be made, the Report says.
The goal of the development of business plans was that Indian ports should be transformed into world-class facilities; one of the important aspects various consultants had to cover in the course of the project was to provide benchmarks.
The Ministry of Shipping, Road Transport and Highways mandated that each of the 12 major ports develop a business plan in a bid "to transform Indian ports into world-class facilities suited to the requirements of the future economy of India." The major exercise was conducted in a year's time. The consultants submitted a kind of "helicopter view" for each port for the years to come, and the Port of Rotterdam provided a "satellite view."
The Indian port sector is quite a peculiar market-the 12 major ports have a market share of some 75 per cent, and therefore form a kind of cartel. Major decisions with respect to tariff-setting and investments to be made in infrastructure, for example, are made in New Delhi. Traffic forecasts are made in Delhi as well. In some ports there is the feeling that these forecasts are a target, or obligation that needs to be fulfilled. The major ports hardly compete with each other, and all or most information is shared, including strategic objectives and goals.
There is a limited level of autonomy. Given the scarcity of port facilities, the port sector is a demand market. This is also reflected in the role of the private sector.
Huge revenue shares are offered to port trusts by players wanting to grab the opportunity to operate within a port. The build, operate and transfer principle, "almost nowhere applied in its purest sense," namely that the private sector invests in all the infrastructure, is applied in India. As such, the port trust has limited investments to make (mostly in dredging) but in return receives high revenue shares from the private sector, the Port of Rotterdam report says.
In general, and at least until recently, the ports in India were "berth-minded". This means that as soon as a port was reaching capacity, the decision was taken to construct (an) extra berth(s). The performance or efficiency at the berths was only rarely taken into account, while here the cheapest and fastest port capacity increase could be achieved.
Minor ports and public ports falling under the States, are sometimes becoming fierce competitors for the major ports. The biggest threat is the development of private ports, not hampered by old infrastructure, bureaucratic procedures and inefficient cargo handling systems. Fortunately, the newest major ports, such as JNPT and Ennore, serve as examples for the other major ports with respect to efficient cargo-handling operations. JNPT has, in fact, already reached the goal of becoming a world-class facility, the Report says.
Ennore, with much of its port area still to be developed, has the potential to become a world-class facility if careful, long-term planning is taken into account.
|
