CHAPTERS

CONCLUSION

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During the last three decades, the enormous expansion in international sea borne

trade has been ~~ by unprecedented development and changes in the legal and

technological framework of shipping and related industries. The most notable

technological innovation is unitisation of general cargo. Containerisation, which has

grown out of the concept of unitisation has expanded at an astounding pace and has

established itself as a major mode of carriage of general cargo on shipping routes

connecting the developed and the developing world. The conventional general cargo

vessels are being gradually replaced by newer ranges of larger and specialised vessels in

response to the needs of cargo transfer methods. Improving competitiveness of sea

transport and increasing port efficiency is the aim behind all these endeavors. The

impact on developing countries of these technological changes, in the ·early stages, was

not so severe because the technological innovations in the wake of unitisation by and

large, lent themselves to conventional handling with existing port facilities. Moreover,

the ship owners could still decide which vessels to put on a particular trade route. The

situation has changed radically now. The transfer of unitised forms of carriage is forcing

ship owners to bring sophisticated and specialised new tonnage vessels on trade routes

serving the developing countries. The changing needs of the ship owners are exercising

relentless pressure on port authorities to react quickly and positively to these changes by

providing more and more specialised services. Massive investments are needed to adapt

existing berths or construct new specialised terminals, purchase new equipment and

introduce new operating procedures and practices. The need to find solutions to the new

and complex port management problems, including the development of human

resources is equally pressing. Against this backdrop, it seems necessary to review the

Indian port sector in terms of achievements, problems and prospects.

The Indian Port Scene

On the eve of independence, the Indian ports of Calcutta, Visakhapatnam,

Madras, Cochin, and Mumbai ports together handled about 18 million tonnes of cargo.

The other major ports came up in the subsequent plan periods in the following

chronological order; Kandla, Mormugao, Paradip, New Mangalore, Tuticorin, Haldia

and JNPT. By 1997-98, the sea-borne traffic through all the eleven major ports

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increased to about 251.51 million tonnes, of which over 178.51 million tonnes

accounted for the overseas trade. The average annual growth rate of traffic for all the

major ports between 1950-51 and 1996-97 has been around 5.4 percent but in the last

decade, it has been above 7 percent. The traffic break-up of 1997-98 is as follows:

• 1 04 million tonnes of liquid bulk,

• 88 million tonnes of dry bulk,

• 23 million tonnes of containerised cargo and

• 3 6 million tonnes of other cargo.

• Import and export traffic during 1997-98 were 142.65 and 94.66million tonnes

respectively.

On the domestic front, the picture is quite bright as container traffic is steadily

growing over the years in absolute terms. Also, the share of containerised to general

cargo is steadily growing and has crossed the 50 percent mark. But, on the international

scene, it is quite disheartening to see that no Indian port rank among the top 20

container ports in the world based on TEU throughput. The major Indian ports have

been slow to build facilities for containerised general cargo although significant

progress has been made in recent years in introducing this new technology. Modem

dedicated container terminals are operating in Chennai and JNPT and two new

terminals have opened in early 1992 at Calcutta and Cochin. Despite these major

investments in the four main container-handling ports, hourly and daily output rates are

very low.

In the handling of sea-borne traffic, the role of intermediate and minor ports has

been a complimentary one to the major ports. The minor ports at present handle only

about 10 percent of the total port's traffic. Quite a few of these handle overseas traffic

in which the major import items are foodgrain, fertiliser, etc., while building material,

oil cakes, ores and salt figure in the export list. Among the States, Gujarat has the

largest coastline with the largest number of ports handling about 70 percent of the total

cargo of all minor Ports of India. Gujarat is also the first maritime state in the country to

have constituted a Gujarat Maritime Board (GMB) to administer, control, manage and

develop minor ports of the state. It is also the first State that has developed a deep water

port 'Pipavav' under joint venture partnership.

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Next to Gujarat in terms of length of coast line, comes Tamil Nadu followed by

Andhra Pradesh and Kerala. In Tamil Nadu four minor ports have been declared for the

use of private companies. In Maharashra State also, a Maritime Board has been set up

recently to look into the development of minor ports through private participation. The

different State Governments are proposing to develop minor ports in a phased manner

with or without private sector participation.

India today is encouraging private sector participation and most of the ports are

working out areas for private investments as well as services that are needed to improve

efficiency in the ports. Under the privatistion process, new container terminals are being

built at Cochin, Goa, Vishakhapatnam, Haldia, Calcutta, Tuticorin, New Mangalore,

Kandla and JNPT. Apart from the development of the existing ports, the Government

also has immediate plans to develop four minor ports - Ennore (TN), Gangavaram

(AP), Kakinada(AP) and Gopalpur (Orissa), into major ports soon. The Maharashtra

Maritime Board, which is developing seven intermediate ports - Vadhawan, Dighi,

dabhol, Jaigad, Ratnagiri, Vijaydurg and Redi- has already indicated to investors, that

these ports would have the freedom to levy their own tariffs for all vessel and cargo

related services. Only the passenger services would be regulated by the State Maritime

Board. As a result, Vadhawan could directly complete with two of the major ports in the

vicinity - Mumbai and JNPT. Vadhawan is being developed by P& 0 of Australia.

Similarly, Adani Port, being developed by the Mundhras, would come in direct

competition with Kandla.

Hypotheses Tested

The discussion on the hypotheses tested in this thesis follows:

I. A change in the port-hierarchy is the function of the changes in the factors

affecting functioning and performance of ports.

There has been a positive relationship between port rank and port functioning

and performance. By composite-index ranking method, it has been found out that ports,

which improved in functioning and performance temporally~ also improved in relative

hierarchical position. Similarly, poor performing ports like Calcutta, Cochin and more

recently Murmugao, all have ranked low in the port hierarchy. JNPT's performance has

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improved over the years from the fifth rank to the first rank. Kandla is the next port in

hierarchy after JNPT. New Mangalore has improved its position by three ranks so as to

reach the second position by 1996-97. This improvement in port performance has been

mainly due to addition of oil traffic by the New Mangalore oil refinery. While Tuticorin

has maintained its fourth position over the years, Vishakhapatnam's performance has

improved over time from eighth to fifth position. Paradip follows Visakhapatnam

improving its position to sixth from ninth. While Calcutta has improved marginally,

Cochin's performance remains variable over time. Mumbai's position remains

consistently low. These ports however, occupy the lower rung in the performance level.

But the two ports which have remarkably gone down in position over time are

Murmagao and Chennai. While fall in the former's position is understandable due to

worldwide slump in iron -ore trade. The port, which primarily handles iron-ore, got

adversely affected. The reasons for the latter are different. Chennai is losing

transshipment traffic to other competing ports like Colombo and faces severe

competition from domestic new ports like Tuticorin.

2. Cargo handling capacity of a port is a function of both natural (eg. draught

availability) and man made factors (manpower, capital expenditure etc.).

The basic function of any port is to handle cargo, the nature of which differs

from port to port and from time to time in response to variations in certain natural and

man-made factors. (Refer Chapter 4) Among all the factors affecting the function of a

port, ship berth day output is the most important positive factor while turnaround time is

the most important negative factor affecting cargo traffic in any Indian port. A very

strong positive relationship exists between capital expenditure and ship berthday output

(as in JNPT), traffic and ship berthday output (as in New Mangalore, Cochin, Chennai,

Paradip and Calcutta). An equally strong negative relationship exists between

turnaround time and berthday output (as in Mormugao, Mumbai, New Mangalore,

Visakhapatnam, Calcutta).

Generally, it is observed that a higher pre-berthing detention leads to a higher

turnaround time as in Kandla, Visakhapatnam, Mumbai and to some extent in Cochin.

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Strength of manpower has been detrimental to traffic growth in most ports like in

Cochin, Tuticorin, Chennai, Visakhapatnam, Paradip and Calcutta. But in contrast, in

some ports, as manpower strength increased, traffic too increased as in comparatively

newer ports like JNPT and Haldia where employment opportunities grew with time

concurrent with increase in traffic. The situation is different in the former case where

old established ports like Calcutta, Cochin, Visakhapatnam etc. have the perennial

problem of surplus manpower as these ports are today highly overmanned. The burden

of manpower is obvious in these ports and today the total manpower strength is

declining which is a healthy sign.

3. The internal functioning of an individual port is determined by factor/factors

unique to that particular port.

This hypothesis has been tested against all the major Indian ports over time in

Chapter 4. This exercise has been undertaken with the intention to identify the chief

factor, natural or man-made, that affects individual port functioning. Once identified,

this will help any port planner to suggest improvement in port functioning by

controlling that very factor.

It is interesting to find out that for each individual port, dominant factor or

factors that affect quantum of cargo flow differed and has been unique. For example,

draft availability is the chief factor in Calcutta while capital expenditure emerges as the

dominant factor in JNPT. While pre-berthing detention is the dominant factor in ports of

Kandla and Mumbai that affect port functioning, high idle time at Calcutta deters

efficient port functioning. Manpower is a burden in older ports like Cochin, Mumbai

and Calcutta while newer ports like JNPT have the burden of capital debt.

4. Performance or productivity of a port is a function of the interplay of a number

of variables and is not a matter of chance.

An universally accepted criterion for measuring port efficiency has not yet been

formulated. This is in fact one of the major limitations for estimating port efficiency. In

the present study, port performance has been assessed on the basis of certain selected

indicators, physical and financial. Moreover, each of the selected indicators have their

326

own limitations (Refer Chapter 5). For example, the problem with financial indicators is

that a port can show a good performance on the financial front, but may still be very

inefficient as a transport interface. On the other hand, a port that is very efficient as a

transport interface may not necessarily achieve an adequate financial performance.

Therefore, any statement made about port performance is not final and absolute.

Performance is dependent on productivity and efficiency - both of which vary with

time. Therefore, it is quite likely that the conclusions on port performance that have

been arrived in this study may change over time.

5. The comparative performance of an individual port over time and several ports

viz-a-viz other ports is a function of its age. Newer ports perform better than older

ports.

This hypothesis, tested in Chapter 5, holds true for the Indian major ports. JNPT,

Kandla, Tuticorin and New Mangalore (the newer ports) fare better in terms of port

performance index as compared to Calcutta, Mumbai, Chennai or Cochin (older ports).

6. The financial viabilty of a port is primarily a function of the volume and cargo

mixes it handles.

One indicator of financial viability is operating ratio. It is the ratio between

operating expenditure and operating income. Lower the ratio, better is the financial

health of the port as it indicates less of expenditure and more of income. It is interesting

to note that the port which stands out in this aspect is Kandla whose operating ratio has

never been over 56percent (1991-92). It has managed over the years to keep its ratio

below 50percent on an average, which is undoubtedly a healthy sign. This is mainly

because it primarily handles liquid bulk cargo which requires little manpower and basic

infrastructure and port facilities. Of all commodities, margin on liquid bulk handling is

the maximum with scope for cross- subsidisation and the'refore a port handling liquid

cargo (POL and products mainly) is always make surplus and earns more. Kandla

exemplifies this. (See Table 5.11) On the other hand, Mormugao for example is a

predominantly iron-ore exporting terminal and so operating ratio has always been high

(around 70 percent to 75 percent). Similarly, in Cochin, oil traffic is comparatively less

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and so it is in Paradip and Calcutta. Therefore, ports handling low volume & high value

commodity and products earn more. Financially that port is sound which handles POL

& products as it has scope for cross-subsidisation against other commodities that it

handles. This hypothesis has been tested in Chapter 5.

7. There is a negative relationship between labour intensity and port performance.

It is an acceptable fact that the Indian port sector is heavily overmanned.

Salaries and wages for port employees constitute the largest share of operating

expenditure for any port. Most ports can maintain or even improve their performance or

productivity with less manpower. Over the years, as traffic has increased consistently,

manpower engaged in cargo handling activities has declined so that output per

employee has improved over time as seen in Chapter 5. On the basis of labour

productivity between 1982-1998, ports can be divided into 2 distinct categories - the

older ports like Calcutta, Mumbai and Cochin where labour productivity rates are

lower( as labour intensity is high) as compared to newer ports like New Mangalore,

Kandla, Mormugao and JNPT which have iesser number of workers.

8. Containerisation cannot succeed unless it is accompanied by multi-modal

transport network.

As have been discussed in Chapter 6, containerisation has not picked up in

Indian port sector as compared to other East Asian ports. Containerisation in isolation or

part containerisation does not yield desired results. Containerisation should be closely

followed by multimodal transport network in order to extract full benefits of the former.

So container penetration in our country has remained somewhat superficial because out

of a potential containerisable cargo of about 20 million tonnes, hardly 8 million tonnes

have so far been containerised.

Problems

• One of the problems that the Indian port sector faces today is the mismatch

between traffic and aggregate port capacity. The capacity of the port is the aggregate

capacity of individual berths depending upon the types of commodities handled at that

berth. The cargo-handling capacity of Indian major ports has been increased from 20

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million tonnes in 1952 to 251 million tonnes by 1997-98. But the actual traffic handled

in 1997-98 turned out to be 257 million tonnes, a growth of 10 percent over the

previous year's traffic. So it is clear that there is a long gap between traffic demand and

available capacity. Most of the major ports are operating beyond their capacities and the

rest very near to their saturation limits. The over stretching of the capacities has adverse

effects like high berth occupancies, inadequate maintenance and upkeep of assets.

Performance of the ports also suffers from obsolete equipment, poor draft facilities,

inadequacy of container handling facilities and labour intensive methods of bulk

handling of sensitive commodities like thermal coal and general cargo. Because of these

inefficiencies the country looses colossal money. So India can be competitive in the

global market only if the transport costs are kept to the minimum for quick timely

movement of goods.

As has been the experience in India, there exists a mismatch between the traffic

and aggregate port capacity. There would be a gap of about 168 million tonnes in

capacity in 2005, mostly in the ports of Paradip, Visakhapatnam, Chennai, Tuticorin

and Kandla. At these ports, there are physical limitations and constraints in the creation

of capacities of this magnitude and it may be necessary to build new Outer Harbours

contiguous to the existing ones or develop newer ports at suitable "greenfield" locations

nearby (like Ennore near Chennai), through combined efforts of the Governments and

the Private sector. Major ports account for 95 percent of the cargo traffic handled at all

the ports in the country. The existing port handling capacity is inadequate for dealing

with raising levels of international trade in the coming years.

There is an urgent need therefore, for capacity augmentation. The steady growth

witnessed in the last 50 years will not be enough to meet the forthcoming challenges.

The following facts have to be considered : the total capacity of the major ports at

present is around 215 million tonnes and the overall port capacity required to handle the

projected traffic is estimated to be 540 million tonnes in 2005-2006. This means an

additional capacity of 307.43 million tonnes will have to be added by 2005-06.

In order to increase the capacity of the port sector the MOST has estimated the

fund required in the Ninth Five Year Plan (1997-2002) to the tune of US $ 4.5 billion.

The Government of India has initiated action for policy reforms required for enabling

329

effective participation of private sector in port development. Moreover, the maritime

states have launched ambitious programmes to develop the existing minor ports and

also create new ports through private sector participation. Interest is also being shown

by the potential port users to develop captive facilities. It is hoped that clearer picture

will emerge in due course. A close watch on the developments and closer interaction

with the maritime state governments is also necessary.

• Another key problem is low productivity in the port sector. The major factors

•

•

contributing to this are summarised below:

Operational constraints such as frequent breakdown of cargo handling

equipment due to obsolescence and wrong specification. It should be noted that

the working Group for the Eighth Plan had suggested the formation of a

Standing Committee to periodically review the status of equipment in order to

dispose of the obsolete equipment. The procedure is being followed in some

ports.

Inadequate dredging and container-handling facilities.

Inefficient and non-optimal utilisation of port infrastructure.

Lack of proper co-ordination in the entire logistic chain.

Low level of containerisation is another problem of the Indian port sector .

Containerisation, which brought about a technological revolution in the

transportation world, is still to make an impact in India. Indian ports are costlier

than other ports in the region for handling containers. The additional cost burden

due to use of second and third generation vessels has been estimated at US$ 250

million a year. Container delays at Indian ports cost US$ 70 million a year. 1

Investment on port modernisation is an unattractive proposition for the private

entreprenuers for the following reasons2:

Huge capital cost (anywhere between Rs. 300 to 1000 crores even for the first

phase.

Indian Shipping, Vol. 49, Nos. 1-2, November.

K.V. Natarajan, 'What government can do for port development', Indian Ports, Vol. XXX, No.3, Jan 1999

330

High gestation period for design and execution (5 to 7 years)

More initial investment in the early phases with fewer returns than subsequent

investments in greenfield situations or more pay-back time compared to other

investment propositions.

Low returns necessitating increase in the lease period for viability, increase in

lease period leads to increase in the risk of investment.

Commercially unviable tariff charged for return on investment inclusive of

payback of current capital.

Present rules and regulations are not conducive for private investment.

Risk of being challenged legally during the course of business due to lack of

protective legislation.

The proposal to establish a Free Pore in India is part of the modernisation

process. India has free trade zones and export processing zones but their performance to

attract foreige capital remains far from being satisfactory. It is expected that a free port

with necessary infrastructure and liberal fiscal policy regimes could bring in many

advantages including foreign direct investments, technologies and foreign exchange.

Proposals for establishment of Free Port in Goa and Tuticorin in Tamil Nadu are long

standing.

• Re-adjustment of work-force is another associated problem with modernisation.

The country has a total employed workforce of 150 million. Of this about 50 million

are in the organised industries which are relatively better off as they have access to

resources, institutional finance, research and development facilities. It should be

mentioned that in sectors where the pace of mechanisation is slow and its impact on

the levels of employment less visible, it is accepted willingly because the resultant

increase in productivity brings higher income to labour. Greater effort is needed to

educate the worker not only in the port industry but in other industries too about the

benefits of increased productivity to him, to the employer and to the economy as a

whole. Productivity consciousness in a developing economy like India is a vital

ingredient in the optimum utilisation of scarce resources. Adoption of modern

methods and techniques to step up productivity are infact needed in all fields of

M. Dattatreyulu, 'Establishing a Free Port in India', Indian Ports, October 1993.

331

economic endeavour. Each industry has to adopt rational methods of production to

be able to generate adequate resources for growth and development. The maritime

industry is no exception either. The major focus in the process of port

modernisation in India should be on:

Increasing capacity utilisation and improving productivity;

Enforcing measures for cost reduction;

Strict inventory control; and

A voidance of waste.

Adoption of new technologies and their integration into the port system is not

contingent only on the ability to find adequate financial resources and skilled

manpower. It also requires an analysis and assessment of the impact of such

technological changes on port labour and other interacting agencies such as the customs

and transporters operating in the hinterland. Unless the procedures and practices

currently in operation are streamlined and oriented to the objectives, the gains of new

technologies will remain elusive. Collectively these developments present complex

policy and planning issues, which require a multi disciplinary approach to appreciate

and resolve many problems.

An aggressive march towards modernisation is needed. It has to be a continuous

process and not a one shot measure. Modernisation without retrenchment is difficult to

achieve. This has been the experience the world over. India, which has a huge backlog

of unemployed and underemployed persons exceeding 40 million, retrenchment would

be a formidable problem. However elaborate and imaginative the welfare mechanism

evolved maybe, it can only partially mitigate the hardships of unemployment.

Modernisation may increase the employment opportunities as a whole at macro

level but not for the unskilled and semi-skilled labour. This is the fear. Modernisation

may help widen the base of the economy, and improve the purchasing power of the

people, which will in turn trigger the demand for more industries and generate

additional jobs. But the additional employment which will be created per unit of

investment may not be commensurate with the backlog of the unemployed.

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Prospect

Port development has not proceeded along the expected lines as laid down in the

five-year plans. The major port performance has not been up to the mark because of

surplus labour, poor equipment and other operational constraints. The new economic

policy therefore stresses private investment that can bring in new technology to tone up

efficiency. Private participation is needed to supplement government efforts in raising

resources for port development. The government has also approved the setting up of an

independent regulatory authority in the port sector to fix and revise port tariffs every

three years (TAMP- Tariff Authority for Major Ports). There is at present no uniform

system of tariff fixation at the major ports. Even the accounting and the billing systems

are not uniform. In the absence of a uniform system of tariff fixation in the 11 major

ports, TAMP was established to build a uniform system of tariff fixation in 1997.

TAMP is open to the inclusion of minor ports within its jurisdiction. Such steps would

necessitate certain legislative changes in the Port Trust Act.

The port sector is an illustration of the 'Mixed Economy' policy of the country.

Both the public and private participation co-exists in the industry, though the 'public'

dominates over the 'private'sector. The provision of auxiliary services - stevedoring,

ship agency, dearing and forwarding, etc., is in the domain of the private sector. The

entire construction of marine infrastructures is carried out by the private sector. To face

this stupendous task and to meet the challenge, it is considered necessary to invite and

involve the private sector in this pursuit. It may not be possible for the Port Industry to

raise the enormous resources from internal sources. The Government may provide the

resources with its emphasis on investment in the social sector. Thus, private

participation in the development process is necessary. While the Government may

retain the controlling stakes, privatisation of certain services of ports needs

consideration. Ports perform multifarious activities such as cargo handling, storage,

warehousing, customs clearance, security and administration. Each of these activities

could be considered for commercialisation and private sector participation. It is

advisable to make the ports work as corporate entities with administrative independence

and the freedom to generate resources for their development.

333

The port sector is an illustration of the 'Mixed Economy' policy of the country.

Both the public and private participation co-exists in the industry. The predominance of

'public' over 'private' is evident. The provision of auxiliary services - stevedoring, ship

agency, clearing and forwarding, etc., is in the domain of private sector. The entire

construction of marine infrastructures is carried out by the private sector. The

ownership, the investment for development, the provision of primary services and their

management, the supervision of the construction of the marine structures, employment,

etc., are retained by the public sector. This is the scenario at the Ports in the country.

The country may need by 2020, a port capacity of more than 760 million tonnes

per annum against its resent capacity of less than 250 million tonnes per annum. More

importantly, the Port user demands a better quality service. These demands on the Ports

by their users, warrant building a huge port capacity requiring not less than 400 billion

rupees during the next 25 years and induction of the 'state-of-art' technology,

particularly in cargo transfer systems, to raise the productivity levels to international

standards.

To face this stupendous task and to meet the challenge, it is considered

necessary to invite and involve the private sector in this pursuit. It may not be possible

for the Port Industry to raise the required huge resources from its internal resources. The

Government may provide the resources with its emphasis on investment in the social

sector. Thus, private participation in the development process is envisaged.

Also, the World Bank in its "Strategy Report on Indian Port Sector" voices a

similar opinion though in a different form. It advocates 'Privatisation' to satisfy the

objective for which the Ports are established as 'Trusts'. They, as a Service.1ndustry,

should serve the 'Public Interest'. According to it, this interest is served when Ports put

their economic and human resources to optimum use. It states 'any sub-optimal use

would mean that the trust mandate is not fully executed'. Also, it believes that

privatisation would place the Ports in their proper role- as 'Landlord' and 'Regulator'.

The Inter-governmental Group, constituted in 1991, identified the following

areas of the Port Industry for private participation.

Container Terminal Development and Operation;

Container/Break-bulk cargo handling;

334

Stevedoring and Warehousing;

Liquid bulk handling and storage;

Dry bulk cargo handling;

Lighterage services;

Provision of Tugs, Barges, Cranes and services to vessels;

Maintenance services, including Estate Management;

Dredging Operations and Pilotage; and

Provision of new Berths and captive facilities.

It is expected that privatisation would usher in an era of better performance and

productivity in the following ways :

• Firstly, the association of the private sector, to a greater extent, with the Port

Industry envisages an adequate flow of private investment in building the additional

Port capacity and modernising the present capacity.

• Secondly, the foreign private investment would provide an easy transfer of

technology, particularly in the area of cargo transfer system, including the container

technology and pave the way for technological innovation and higher cargo transfer

rates.

• Thirdly, private participation results in reduction in overheads and rationalisation of

the out of proportion manning scales, which is the bane of the low productivity,

through higher wages, competiveness and sensitive approach to employee-employer

relations.

• Fourthly, professionalisation of the management with induction of properly trained

and skilled personnel at different levels by restructuring and redesigning the

organisation would provide the desired professionalisation of the Industry.

• Lastly, the appearance of new Ports in the private sector would reduce the

monopolistic nature of the Industry and permit competitiveness through which

increased efficiency is ensured.

There are certain modes of privatisation , which find favour with the corporate

world. In case of Port Industry, the preferred method seems to be BOT (Build, Operate

335

and Transfer). The proposals to build and operate Ports at Dhamra and Gopalpur in

Orissa, Krishnapatnam in Andhra Pradesh, Vizhinjam in Kerala, Dhabol, Jaigad,

Vijaydurg, Deogad, Ratnagiri and Redi in Maharashtra and Hazira, Maroli, Simar,

Vansi-Borsi and Muthivirdi in Gujarat will be the trend setters for privte participation in

the Port development.

This trend, particularly participation in a significant way at the major ports, is

expected to gain momentum once guidelines on the subject are cleared by the Govt. of

India. These are some of the important advantages foreseen from private investment and

participation in the Port Industry. Thus, the emergence of the concept of 'Landlord' and

'Terminal Operator' dichotomy, a common system at the Ports in the developed

countries, is anticipated.

Indian ports now need to plan with a 15-20 year perspective. We are far behind

other Asian countries, be it China or a tiny state like Singapore. China's port policy of

1978 targeted for a port to be developed almost at every 50 kms along its coast, whereas

India with its 6000 kms long coastal line has only 11 major ports. Again, the Port of

Singapore, which does not have its own cargo handles 190 million tonnes of container

cargo per annum, whereas India's throughput of container cargo from its 11 major ports

is not even 20 percent of the above. This is despite the fact that India enjoys a

geographically advantageous location to handle transshipment cargo in addition to the

inland cargo. There is, thus, a huge deficiency in the present port infrastructure facilities

in comparison with what the country should have in the context of globalisation and the

recent thrust for export as planned by the Indian Government. Indian ports will have to

upgrade their technology levels to be comparable to international standards.

Therefore, the Port authorities need to take up area rejuvenation programmes.

Indian ports have large tracts of urban land, which could be optimally utilised for

facilitating the required restructuring. The process of restructuring and modernisation

would also involve a shift to better management and change in a worker's job

description. This would require up gradation of the worker's skills in line with new

needs. What therefore needed is an integrated and comprehensive approach and

possibly an appropriate institutional mechanism to give shape to our plans. Some of the

ports must become 'megaports' operating as the warehouse for the Indian subcontinent.

336

It may be advisable to develop at least two ports for this purpose, one each on the east

and west coasts. The world over, a port, which handles cargo of roughly 70 to 100

million tonnes, is considered to be optimal economic size. This is the size we should

target for the 'super' -or 'megaports'.

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