There is no doubt about the economic revival ports can bring to any region. So, it is important to both understand and encourage them; to learn more about the opportunities and threats relating to this sector and to find ways to make the ports sector invigorating. Keeping this in mind, the session titled ‘Economic resurgence through ports’ was organised. This session had names (in alphabetic order) like Rajiv Agarwal, CEO and MD, Essar Ports; Gautam Dey, Senior Deputy Traffic Manager, Mumbai Port Trust; and Sandeep Mehta, President, Adani Ports and SEZ discussing issues relating to ports.
Aegis under different circumstances and different growth plans
Captain Sandeep Mehta, President, Adani Ports and SEZ: Today, the Adani group has built the world’s largest coal import terminal; created the world’s largest single location power generation facility; and have India’s largest container terminal. The group is committed to its vision of building infrastructure for the nation. Our group has an ability to create a world class facility.
For India, good things are happening but slightly late and that too not adequate in scale. My personal belief is that India needs large-scale and world-class infrastructure to be able to achieve the growth which today looks possible, and would then support the improvement in lifestyle which comes from economic growth. This belief is also reflected in the ethos of the group. Indian trade for a long time was suffering intensely from operational and mind set constraint issues at ports.
When we entered the business, we had seen the chronic situation of vessels waiting for berths. Our group took a stand that berths must wait for vessels. We adopted technology, achieved mechanisation efficiency, reached scale and in all this we worked with the local community. Our engagement with the community shows in many ways. The area now resembles an industrial city. From the authorities’ side, some measures like single window clearance, reduced hassles can help in emergence of multiple industrial projects.
Today, the group has presence in Mundra, Dahej, Kandla, Hazira and Goa on the west coast. On the east coast, we are at Ennore (where we commenced operations recently), Kattupalli, Vizag and Dhamra. We are building India’s first transhipment hub at Vizhinjam, close to the edge of India and at the tip of the main global shipping channel. At Mundra, our 2 km airstrip can easily be doubled and we can make an international airport and create other facilities to align it to our plans on defence and airline sectors.
Rajiv Agarwal, CEO and MD, Essar Ports: Our group, which commenced operations from Gujarat, has an industrial background. Essar was the first steel plant in the state. Alongside with our integrated facility, (given the waterfront available) the port came up. There we created a system much different from the prevalent ones. This infrastructure then helped Essar set up its integrated power plant. This was a perfect example of how Gujarat’s waterfront has catalysed industrial development.
Today, we have 170 million tonnes port capacities across five locations in India wherein 58 million tonnes have been given to other operators. Even in Hazira, our agreement stipulates that we can handle merchant cargo and it is not just captive operations. Beyond that, we have created 20 million tonnes capacity in the UK and 10 million tonnes in Canada. We will soon add 20 million tonnes capacity in Mozambique.
Gautam Dey, Senior Deputy Traffic Manager, Mumbai Port Trust: Mumbai Port Trust (MbPT) is the second oldest port in India, constituted in 1872. Being on the west coast, it has traditionally been the gateway to India for all of Europe and the Middle East. Like all port cities – Kolkata, Chennai – it can be said that Mumbai city also substantially owes its growth to the port.
Like all old ports (in the city area), today the primary challenge for MbPT is to re-invent and create a new relevance. When JNPT was developed at the nearby site of Nhava Sheva port, it was clearly chalked out that the new port would outgrow the parent. With proper planning, unlike the operations of MbPT, the new port did not suffer from legacy issues.
Today, compared to three decades ago, we handle three times the traffic and our employee strength today is around 8,000 compared to 46,000 then. So we are also improving. However, we are enveloped on all sides by the city and hence today’s need is that we should contain our spread and confine our growth to benefit the city.
Ports are relevant for India’s growth
Mehta: Today, India is building world-class small cars which are cost efficient than European carmakers. Ports are essential part of this sector’s global growth plan.At our Ennore site, we are focused on improving facilities, to make Ennore a port of choice comparable to Singapore or Colombo. Increased operations would mean more ships here. Thus, would save forex and help the local industry and local community. Like Dubai, Indian ports are also in a good time zone and can handle not only more cargo but also more and better-paying passenger traffic.
At Dhamra, we see the same growth potential as Mundra has shown. The Kolkata port is a riverine one and has its own challenges. We needed a deep-water port with excellent connectivity to Kolkata and Dhamra serves that purpose. We have been able to make the Mundra port, a destination port. Earlier, 90 per cent of our cargo would see transhipment done through Dubai, Colombo or Singapore but now it is around 50 per cent.
Agarwal: Given our GDP growth plan of USD 2.5 trillion to USD 15 trillion in the next 15-20 years, we will have to depend more on ports for higher consumption and movement of goods. Cargo in India today is four times of what it was 15-20 years ago and from here on it will be four times in the next 15-20 years. To handle this massive increment from hereon, ports will have to play a major role. It is simply not possible to build that incremental scale of road or rail infrastructure.
Dey: For MbPT, tourism is now a new focus area. The cargo operations will of course continue, but our growth now must be relevant to the city. Greater passenger traffic (of the right kind) will also help showcase Mumbai as a tourist destination in the way it should be done. For cruises, we expect our count of 40 ship calls to go up to 159 next year. We can have a dedicated terminal of 40,000 square feet for international cruises. We shall handle 3.2 million tourists over the next 25 years, and for that we would need to construct five berths from our current single berth.
System for growth
Dey: Mumbai has always been good for cruise traffic, but the earlier Superstar Libra cruises faced difficulty with the taxation and perhaps the operations too. For coastal tourism, in 2014 we got all stakeholders – customs, port authorities, immigration, CISF, tourism, the state government – and created a focus on ease of doing business. We took pains to develop standard operating procedures.
Finances-wise, we are like the old landowners with lots of land but little in the pocket. But we are working towards improving our position here. In case of tourism, the operations are largely self-sustaining. We would also have access to the public-private partnership route in this case, so land monetisation is not strictly required for that.