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Indian Port Sector

By Hans Ole Madsen – CEO, South Asia for A.P. Moller-Maersk

Port Pipavav

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About A.P. Moller-Maersk

> Established in Svendborg, Denmark in 1904

> More than 110,000 employees in over 125 countries

> Global group turnover of USD 40 Billion

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Main Business Activities

Container Shipping related activities

> Maersk Line and Safmarine are market leaders in global container services

> Network of more than 550 container vessels and 1.4 million TEU

> APM Terminals operates more than 45 terminals

> Multimodal Supply Chain Management services through Maersk Logistics

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Main Business Activities

Other Shipping related activities

> Transport of crude oil, refined products and gas by Maersk Tankers

> Maersk Supply provides supply vessels for anchor-handling, cable laying etc

> Maersk Contractors is involved in mobile production units and drilling rigs

> Over 260 vessels and rigs operated

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Main Business Activities

Energy

> Production and exploration of oil and gas

> Production Activities in Denmark, United Kingdom, Qatar, Algeria and Kazakhstan

> Exploration activities in the North Sea (Denmark, United Kingdom, Norway and Germany), Algeria, Morocco, Angola, Oman, Brazil, Surinam, Colombia and Turkmenistan

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Main Business Activities

Retail and other industry

> Supermarkets and hypermarkets in Europe and UK

> Brands include the Føtex stores, the Netto stores and the Bilka hypermarkets

> Shipyards in Denmark, Germany and the Baltic countries

> Industrial production of plastic products

> Star Air engaged in contract parcel flying in Europe

> 50% ownership of Martinair Holland engaged in air freights and charter service for passenger

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Our Presence in India

> Maersk Line operating in India since 1952

> The leading container shipping line in India

> Nationwide presence through 33 offices

> Employs over 5,500 people in India

> Established the 1st Private CFS in Nhava Sheva in 1994

> Pioneered the back-office (BPO) concept in the maritime industry

> Established the 1st Maritime Training Academy by a foreign shipping line in India

> Among the 1st participants in the privatisation of rail freight in India

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> The 3rd Container Terminal at Nhava Sheva harbour within JNPT

> Converted existing bulk terminal on BOT for 30 years

> Joint Venture with CONCOR

> Handling capacity to be 1.4 mio TEU

> Total quay length 712 metres

> Draft limited to channel draft of 12.5 metres

> Located in Gujarat on the west coast of India to handle containers, bulk and liquid cargo

> Container volumes handled to exceed 250,000 in 2006

> Projected Container terminal capacity of 1.3 mio TEU

> Bulk cargo in 2006 apx 2.5 mio tons

> Total quay length of 725 metres

APM Terminals in India

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Current Scenario

> Growth projections indicate continued demand for capacity

> Encouraging response from both local & international companies for Port development projects in India

> Major international container port operators have a presence in India and are eyeing new projects

Demand Projection

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2006 2007 2008 2009 2010 2011 2012

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Regulatory Environment

> Model Concession Agreement

> Major v/s Minor Ports

> Tariff Regulation

> Major Port Trusts Act

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Financing

> Need for long term financing/debt options

> Current interest rates high thus increasing the overall cost and risk

> Viability gap funding scope to be broadened

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Public Private Partnership in Ports

> Private investment attracted towards port projects with reasonable returns and payback period

> Support infrastructure to be developed by the Government to ensure success of the PPP model

> Government to undertake infrastructural development where payback is commercially unviable but essential for overall development such as capital channel dredging, breakwater, rail/road linkages etc

> PPP to be used as a tool to speed up infrastructure development and not as a replacement of Government spending

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Productivity and Efficiency

> Berth productivity has improved at some Indian ports from 20 moves per hour in the 90’s to 70-80 moves per hour

> The benchmark is now higher

> Emma Maersk, the worlds largest container vessel, had berth productivity of 540 moves per hour at Yantian