The Hindu Business Line : Port reforms sailing well

THE entry of globally-reputed shipping companies into port services, terminals and storage facilities has brought some radical changes to the port sector's working and policies.

Till recently, ports were mere instruments in the hands of the state for better access to market. The policies were not liberal and left little scope for productivity improvements, quality and timely service at competitive prices, and profits in the port sector.

However, the international logistic revolution, increasing containerisation, industry consolidation, environment regulation and the proven financial benefits of private participation in infrastructure development have all provided impetus for fast-track port reforms and a change of role.

But this would require funds, and to minimise and share the risks associated with the huge capital investment, the most powerful and promising partners the port can get are ocean carriers, international terminal operators and global logistics providers.

According to a paper submitted at a recent seminar, port operations involving a variety of ships, extensive terminals and synchronising the rail and road transport network require multi-tasking skills and flexibility of operations.

Today, a port is a sophisticated and integrated system that provides an array of logistics services to the maritime industry. Ship operators are clamouring for expanded, cost-effective services. This requires ports to introduce advanced technologies, innovative concepts and seek new partners.

For instance, IT and automation have increased efficiencies and reduced operational costs. If the newly opened computerised terminal at Pasir Panjang, in Singapore, is able to stack boxes 9-10 high, two-three times higher than the conventional terminals, the Ceres Paragon terminal in Amsterdam loads and unloads boxes from both sides of mega-container ships by using up to nine cranes, instead of five by conventional terminals. This will obviously reduce the ship turnaround time by half.

Another improvement is fast and efficient connections to the hinterland. The increasing containerisation of world trade and the steady rise of multi-modal transportation have radically changed the business environment.

The rapid growth of the multi-modal system has opened new dimensions in containerisation and caused tremendous impact on the organisation, operations and structure of transport industry and foreign trade.

Referring to the Indian situation, the paper suggested that the present tariff and concession regimes should be replaced with a dynamic pricing policy that can guarantee a fair return so as to make the port sector investor-friendly.

For an efficient and innovative global shipping industry that can ensure a relatively stable economic environment, the Indian ports sector has to outgrow its limitations.

The Sagar Mala project can play a crucial role in providing efficient, economical and eco-friendly connections to the hinterland of major ports.

According to a recent Unctad report on maritime transport, container port traffic reached 236.7 million TEUs in 2002 and the most striking aspect is about two-thirds of the general cargo is moving in boxes.

The world container fleet continued to expand in 2002, reaching 2,890 ships with total capacity of 5.89 million TEUs at the beginning of 2003. The world container traffic is consolidated in a cartel of 20 liner operators, which account for 1,933 ships and 4.76 million TEUs, or 61.8 per cent of total capacity.