The Indian Ports Association (IPA) is more than a mere representative body of the country''s ports. It has a direct impact on government port and maritime policies through representations to the Planning Commission, as well its own consultancy arm to oversee port development projects. Gavin van Marle talks with its managing director, Captain A.N.M. Kishore.
In some senses the IPA is also partly responsible for the congestion and lack of efficiency in India's ports. In response Captain Kishore explains: "There are certainly capacity constraints at the moment. Nhava Sheva will eventually have total connectivity by rail, and there were also problems with yard efficiency but those have been smoothed out. The third terminal concession there is to be operated by APM Terminals in a joint-venture with Concor (the state-owned intermodal monopoly operator, Container Corporation of India) which will add another quay to the port and we expect to be full as soon as it opens. Also in Mumbai, Jawahalal Nehru Port Trust (JNPT) is to go ahead with the greenfield construction of a fourth terminal, which is currently in the hands of the port authority.
"Additionally Cochin has just received formal approval from the government for its Vallarpadam island container transhipment terminal, " Kishore continues. "Dubai Ports Authority (DPA) will take over the operation of the (current) Rajiv Gandhi terminal while construction of Vallarpadam is underway, and once Rajiv Gandhi has reached capacity DPA will start-up there as well. And there are certainly other ports looking for more cargo. Vizag is looking for more cargo, it's running at about 50% capacity; Haldia's looking for more, Kandla also has a further development and Mundra's 700-metre quay is already being used as an overflow for JNPT, and there's to be an extension of that."
"But much of the congestion could be solved simply getting the cargo out of the terminals on block trains, and Concor is certainly developing its traffic, with a 15% growth in volumes last year from 1.38m to 1.6m TEUs, " he argues.
However, the problem may get worse before it gets better, in the short term at least, as the demand for container traffic - and rising demand for container cargo - has exceeded expectations, according to Kishore: "India's 10th plan projections look certain to be well exceeded. It runs from 2002-7 and estimated a national throughput of 6m TEUs by the end of that.
Last year we hit 3.9m and saw a growth rate over 2002 of 9.92%. Between AprilAugust this year we grew by over 10% compared with last year. And yet GDP growth has been falling a bit, this year around 7%, last year was 8.9%. Certainly we are still seeing a conversion of cargo from breakbulk to containers. Ideally 65-70% of India's cargo would be containerised, at the moment it's about 60%."
The state of Kerala is also looking to build another transhipment facility at Villinjam, and so far seven private companies have expressed an interest in the BOT scheme for which applications closed on 15 October. "For the first time in six or seven years the Prime Minister attended a recent Planning Commission [in India, these are the forums in which the major policy decisions are made] and said that infrastructure is the priority. That is not to say that the last government did a bad job. One of the advances they made was the improvement of port access roads and the beginnings of the Golden Quadrilateral."
LONG DISTANCE ROAD HAULAGE NOT AN OPTION This latter project is a national highway system which will finally link India's four largest cities - Delhi, Mumbai, Kolkata and Chennai - and push Indian road transport into the modern era. "Connectivity with the hinterland is a crucial aspect in the development of India's port system, " insists Kishore. "It has already improved immensely if you compare it with ten or fifteen years ago. Most of the linkages are by rail, and Concor is opening up new inland container depots (ICD) because there is a lot of congestion at the existing ICDs. In a country of India's size, long distance road haulage is never going to be a real option, so getting the rail infrastructure in and out of the ports is almost as much a priority as developing quays. Nevertheless medium distance road haulage should increase to take some of the burden off rail, and multimodal transport in and around the cities is part of the answer to the congestion issues."
Although he doesn't say so outright, there seems to be some indication that Kishore believes that shippers and other transport operators are somewhat justified in their calls for greater competition in the rail haulage sector. While Concor has a 100% monopoly, many in India have argued that its rail performance will never match that found in other countries, that competition should be introduced to the sector to improve the performance. "There are concerns, I understand those, but I don't know who else will bring in the investment to develop new rail infrastructure, and while Concor continues to provide that I don't realistically see how we can hand the operations over to another party altogether, " he says. However, a consortium of India's east coast ports has petitioned government to green light the construction of dedicated freight tracks to be built parallel to the existing pax-freight tracks, but financed with private money raised through a BOT tender process.
Even if India's policy makers accepted this form of financing - which despite its popularity in its partially reformed port sector, has yet to make its debut in the rail sector - how long would it take until we actually see it out into practice? The world's largest democratic nation is infamous for having a bureaucracy to match its enormous population. Things take a very, very long time to work their way through the system. Somewhat inevitably, given the direction in which all shipping eyes are looking at the moment, the comparison with China comes up. " What the Chinese do is amazing, " Kishore concedes, "but we are a democracy and following the proper process can take more time. Everybody is conscious that this needs to happen and what needs to be done. It is slow, but I believe there has been sufficient progress."
Earlier in May, a new government took charge of India. Led by the Congress - the party of Nehru and Indira Gandhi, and responsible for much of the state's tenacious control of its major industries - along with a loose coalition, there was considerable fear in the business community that it would halt the liberalising measures of the previous encumbants. But after six months in office, most observers see a greater likelihood of further liberalisation as far as freight transport is concerned. New maritime legislation is currently in the making, which the IPA is advising on, and Kishore expects it will solve several of the current problems. "The government is thinking of forming another maritime policy. This month a working group had the first meeting and a policy document was made out which I would describe as more user-friendly for the shipping and ports industries. There are some concessions for coastal cabotage traffic and also for inland waterway traffic, which has historically been very low, far below its potential capacity."
LABOUR A HUGE ISSUE Another huge issue facing the ports business in India is labour. A 10day strike at Chennai's P&O Ports' operated container terminal in the summer crippled ports throughout South India as desperate shippers tried to route export containers through other terminals which were simply not ready for the volume surge. The backlog took two weeks to clear. Kishore however, does not think that this was indicative of any wider labour issue in India's container terminals. "That was between the management and labour over the treatment of some of the workers by the management. It wasn't anything to do with the labour situation itself. There are no moves to change any labour legislation.
We have a payment wages act which increased minimum wages, and an Industrial Relations Bill which improved the atmosphere between management and workers. However, in other port operations it's not quite the same. A national tribunal is looking at rationalisation of the workforce by as much as 50%. It's a continuing process, and an extremely delicate one?" His voice trails off and he looks at his watch.
Which is very likely to be the sort of reaction of a lot of port customers, especially as they wait for their boxes to clear Customs.
Kishore is sympathetic, but powerless: "There are problems there, no question about the fact that it adds to congestion. But there are a number of serious concerns on their part, obviously of terrorism in India is a big issue, and I understand that they feel they have to keep control of what is coming in and out."
While India's Customs have introduced a fledgling 'known shipper' programme, it has yet to be seriously rolled out across exporting industries. Finally, it seems, India's politicians and administrators have woken up to the fact that the development of its industries and economy hinges on its ability to provide adequate infrastructure - which is certainly underway - and just as crucially making sure port operations are as efficient as possible. The latter is perhaps the greater challenge.
