Chasing shadows

A matter of individuality

There are those that believe that individual states should be in charge of putting the projects in place on the ground in India. They point to the rise of privately run minor ports in Gujarat and Andhra Pradesh which have, with supportive regulation and governance, been able to put the major ports to shame, increasing their combined throughput from 120m tonnes in 2004 to 417m tonnes in 2014, accounting for around 60% of India’s overall growth.

But while Drewry’s Nivesh Chaudhary has to admit that “major ports are losing sheen and market share to minor ports”, he is cautious about a blanket conclusion, explaining that this result is down to a few almost incredibly successful facilities rather than being a broad sweep across the board.

India’s clear winners include Pipavav and Mundra. Mundra developed by leveraging other businesses into the port’s activities including power plants, mining and food refineries and then Gautami Adani added rail, road and container depots to the structure at the same time as investing heavily in handling equipment to keep turnaround times to under a day.

On Pipavav’s side has been huge restructuring under APM Terminals which offered discounts to get it on its feet again. It’s done well – container growth has reached 23%, albeit from a low start, and shares have now shot through the roof. Further, Pipavav and Kattupalli may gain from government permissions to handle new car imports.

But Drewry’s Nivesh Chaudhary says their policies are only half the story and in fact, both Pipavav and Mundra benefit from their position in India’s northwest to attract cargo streams from Gujarat’s dense industrial hinterland and overspill from congestion at Mumbai and JPNT – although this could change with JPNT’s coming fourth container terminal, expected to be in operation by 2018.

In reality, a closer look at the numbers tells another story says Mr Chaudhary. While between them Mundra and Pipavav accounted for around three quarters of the minor port traffic during spring and summer last year, there are in fact 187 minor ports (as opposed to just 13 major facilities) so by far the great majority of minor ports are not doing that well especially since India’s clamp down on coal exports.

He says that giving the major ports flexibility will even the score, adding: “It’s high time that the government reformed the public-private project approval process. We need infrastructure support… getting private players into the major ports is going to be the way forward.”