The Hindu Business Line : Absence of board at major ports threatening capacity expansion

Rising traffic
Ports sector to face fresh surge in throughput with rise in the export-import trade.
Currently, capacity utilisation is more than 100 per cent.
Export-import trade may face serious problems unless fresh capacities are added.

Mumbai May 9

Eight of the 12 major ports in the country are functioning without Board of Trustees, which play a significant role in the implementation of expansion and modernisation schemes in their respective ports.

After the term of the eight boards expired in April this year, the new boards have so far not been fully constituted, threatening to throw cold water on the capacity expansion programmes of these ports. In the light of the importance of reconstitution of the boards, the Ministry of Shipping has asked the eight ports to hasten steps to have their new boards in place at the earliest, informed sources told Business Line.

The ports that are at present not having Board of Trustees are Mumbai, Visakhapatnam, Chennai, Paradip, Marmogao, Kandla, Cochin and Kolkata. Only, Visakhapatnam port has initiated steps to reconstitute the board and is close to having a new one in place, according to sources.

Increasing traffic

What is causing some concern is that as the boards have to clear major expansion programmes of the ports, any delay in their re-constitution may affect these programmes.

The concern is understandable in the light of the fact that the ports sector is likely to face a fresh surge in throughput with the increase in the country's export-import trade.

The 12 major ports put together handled a traffic of 423.43 million tonnes (mt) last fiscal, registering a 10 per cent growth from 383.77 mt handled in the previous fiscal.

In fact, the ports are today stretched thin in terms of capacity, with the capacity utilisation being more than 100 per cent.

In other words, unless fresh capacities are added in this sector, India's export-import trade may face serious problems.

Projections are that by 2011-12, the total capacity requirement in the major ports would be in excess of 800 mt, which means an additional capacity of 402 mt would have to be created by that year.

Capacity requirement

The requirement will be more in the container handling system, which has to reach to a level of 134 mt by that year, followed by coal handling (90.35 mt) and iron ore (62.75 mt).

"This is where the importance of port expansion comes. We just cannot brook any more delay on this count," an official of the Ministry of Shipping said.

Expansion plan

The ports have chalked out an elaborate expansion programme through public-private participation models.

Some of the projects being implemented by these eight ports include two offshore container terminals at Mumbai port, four cargo berths at Kandla, second container terminal at Chennai, iron ore and coal berths at Paradip, bunkering terminal at Cochin and general cargo berths at Visakhapatnam port.

The private sector, which has started to play a major role in the port expansion process, feels that private investors should find a place in the board of trustees of major ports.

"The Government should consider board membership for the private investor in the boards of major ports," Mr S.R. Ramakrishnan, Managing Director of PSA-Sical Terminals Ltd, said in a recent presentation in Mumbai.