The Hindu Business Line : GTI challenge: Steering the success story

GTI must gear itself to handle large capacity container carriers in its terminal, preferably upwards of 8,000 TEUs. But there are stumbling blocks along the way.

Santanu Sanyal

Success throws up new challenges. This is what the management of Gateway Terminals India Private Ltd (GTI) is now realising. But first the success story.GTI’s container handling terminal at Jawaharlal Nehru port was commissioned in October 2006 with a designated capacity of 1.3 million TEUs to be achieved by 2013, i.e., the seventh year of operation. But by November 2007, the throughput exceeded 10,00,000 TEUs. At this rate, it is felt that the designated capacity will be achieved in 2008 itself.

GTI is a joint venture between APM Terminals (APMT) belonging to Copenhagen-based AP Moller Group and India’s Container Corporation of India (Concor). APMT holds 74 per cent and Concor the balance 26 per cent of the paid-up equity capital of Rs 320 crore. The licence agreement was signed in August 2004 and the construction of the container handling terminal cost $238 million.

Key plus points

One of the key factors behind the successful operation of GTI’s terminal is that both the partners are strong, each in its own way. APMT operates 50 terminals in 30 countries in five continents, caters to more than 60 shipping lines handling a total throughput of 28.4 million TEUs.

Incorporated in 1988, Concor operates 58 off dock terminals in India, handles two million TEUs and provides multi-modal logistics service to support the containerised trade along with warehousing and repair facilities for the boxes.

Next, the facilities provided by GTI’s terminal, claim the authorities, are world-class. The terminal has a quay length of 712 metres complete with more than 500 reefer plugs, three railway sidings, eight rail mounted quay cranes (Post Panamax type), three rail mounted gantry cranes and 29 rubber-tyred gantry cranes. The automated terminal operation has been made possible by EDI interface, auto steering for RTGC, hand-held wireless terminals and an ERP system for terminal administration from IFS, Denmark.

No wonder, the terminal has to its credit the record handling of 10 trains in a single day and throughput of over 100,000 TEUs every month since July, achieving berth productivity of 143.65 moves (imports/exports) per hour and ICD operation of 96 TEUs in six minutes.

“We’ve set a new standard of efficiency not only in cargo handling but also a whole gamut of operations covering security, environment protection, health and safety of workers and corporate citizenship (28.5 per cent of the total employees of 462 have been recruited from those affected by the project)”, observes a spokesman for the company.

Challenges ahoy

But the GTI management cannot rest on its laurels. In fact, there is a proposal to invest $100 million on capacity addition. But the decision to invest is not easy, not because of financial constraints but due to other considerations such as dredging, model concession agreement and evacuation facilities. The present trend worldwide suggests that GTI must gear itself to handle large capacity container carriers in its terminal, preferably upwards of 8,000 TEUs.

stumbling block

But the biggest stumbling block is the draft. Right now the minimum available draft is 11 metres (12.5 metres in high tide) with the result up to 4500 TEU capacity vessels fully loaded can be handled at the terminal. The higher capacity vessels need higher draft; in this case at least 14.5 metre draft.

Unless dredging is undertaken in the waters adjacent to the berth, 14.5 metre draft will never materialise. Unfortunately, the proposal for dredging at an estimated cost of over Rs 700 crore has been lying with the Union Government for quite some time. Next, the issue of model concession agreement (MCA). The essence of MCA should be to facilitate innovative efficiency enhancement leading to cost-effective and safe operations of world standard. This should also help build port infrastructure on public-private partnership basis. For major ports, it is to be signed between the private terminal operator and the respective port trust. Discussion on MCA has been on for a long time but no decision has been taken as yet.

The views have been invited and discussed and meetings held but no consensus has been reached as yet. An early decision on this should brook no delay, more so when there is a proposal for extension by 330 metres of the existing terminal operated by Jawaharlal Nehru Port Trust and for construction of a fourth terminal adjacent to GTI’s terminal.

Finally, the evacuation issue. Right now GTI’s terminal has three railway sidings which will be inadequate to handle projected increase in throughput. Also, the present state of road connectivity to the terminal leaves much to be desired.

The work on wider roads is in progress and hopefully should be over within the next few months. The present distribution of traffic between rail and road is 30 per cent 70 per cent respectively. But from the long-term perspective, rail should be preferred mode accounting for a much larger number of boxes. This calls for early action on the proposed dedicated freight corridor.

All these factors have led the GTI management to ask: will the proposed investment of $100 million on capacity creation be viable?

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