Port operator not hindered by policy hold up

Hazira terminal Essar Ports' Hazira terminal in Gujarat. Image: Essar Ports
Industry Database

An Indian port operator is supportive of the delayed Major Ports Authorities Bill for its promise of more autonomy to improve operational efficiency.

Essar Ports' Vizag dry bulk terminal in the Port of Visakhapatnam and Paradip dry bulk terminal at Paradip Port fall under the remit of Bill and despite the fact it is yet to be implemented, the Indian government has taken steps to make positive changes to ports, said Rajiv Agarwal, CEO and managing director of Essar Ports.

"We have seen the government actively trying to improve operations, better delegation of authority and powers, improving overall organisation in ports," he stated.

Pending since 2016, the Major Port Authorities Bill aims to improve the efficiency of India’s 12 major ports by enabling decision-making autonomy. The draft bill was approved in 2016, but India’s lower house of parliament has not passed it.

Room for improvement

Under the current 1963 Major Port Trusts Act, large ports are overseen by central-government appointed trustees subject to orders from the Ministry of Shipping, plus tariff regulations. However, over 200 private minor and intermediate ports are administrated by state governments, meaning they do not follow the same tariff regulations and therefore have a business advantage.

Speaking about the government's intentions, Mr Agarwal said: "I think the overall idea is to modernise, improve the efficiency and increase the capacity and facilitate investment and there is also a large blueprint of policy which is working towards having port facilities almost at the doorstep of industries. "

Likewise, Essar Ports is focused on its own growth. In addition to the Vizag and Paradip terminals, it owns the Hazira (bulk) and Salaya (dry bulk) terminals, which are under the authority of Gujarat Maritime Board, the largest port authority in the country.

Part of the Essar Group, which has invested around US1.5bn into its subsidary's activities, Essar Ports has a total capacity of 110m tonnes and aims to diversify its product portfolio and improve its cargo turnaround time. Hazira may diversify into liquid cargo and potentially LNG in the future.

“The challenges are in terms of diversifying our product portfolio. Mostly we are in bulk and we would like to move to some other cargoes. We’re also working on diversifying our customer base," said Mr Agarwal.

Currently 70% of the cargo that the terminals handle comes from the group and 30% from other sources, but Essar Ports would like to swap this ratio around.

Eco-outlook

The company also aim to be more environmentally friendly. The Salaya terminal is in an environmentally sensitive area as it has a marine national park next to it, explained Mr Agarwal. Covered conveyer systems are used to avoid transhipment handing of coal and to prevent, spillage, dust and pollution.

In the future, natural energy sources like solar and wind power may be considered at the terminals to begin replacing fossil fuel usage.

Mr Agarwal said that while the market appears to be slightly subdued, Essar Ports is developing well. He said: "We have seen some good traction in the growth of cargoes in the first quarter. For the year, we are looking at growth of almost 40%, which we hope to achieve."

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