The Hindu Business Line : UK Ports Mission sets course for Indian partnerships

A high-power UK Ports Mission recently visited India to meet both public and private sector port interests in Kolkata, New Delhi, Ahmedabad and Mumbai. While some of the Mission members already have large investments in India, others are scouting for opportunities. In an interview to Business Line, Mr John Owens, Chairman of the Mission and also the Managing Director of Portia Management Services Ltd, explains the objective of the Mission and the kind of opportunities its members are looking for.

Excerpts of an interview:

This is not the first Ports Mission from the UK to India...

You're right. The first UK Ports Mission visited India in 1997. In the last 10 years, several such missions have visited this country.

What was the outcome of those visits?

Very good. I must explain that visits do not necessarily lead to concrete business deals immediately. From visits, contacts are established, ultimately leading to the signing of contracts. From visits, the UK companies get to know the opportunities that exist in India and similarly the Indian port sector knows what the British companies have to offer. All this is very useful. I first visited India 10 years ago as part of a Ports Mission. I again came as a member of another Mission. The contacts were established and my company is now active in India's port sector.

In what way is the present mission different from the earlier ones?

The focus this time is more on the security aspect which was not a major issue earlier. Also, for the first time, British companies are looking into opportunities in West Bengal. There is a long history of successful collaboration in port development by Indian and British interests and this visit provides an ideal opportunity to establish new partnerships.

What kind of changes, do you think, have overtaken India's port sector in past 10 years?

A There has been a lot of change, the most significant being the increased participation of the private sector in port projects. The private sector is much more involved in port projects than before. But I also feel that the progress has been slower than most people would like it to be.

Could you explain?

Ports cannot function in isolation. An efficient functioning of a port also presupposes a solid infrastructure support. We've a feeling that the growth of the infrastructure has not kept pace with the growth of the Indian economy.

Would you attribute this to inadequacy of government policies?

Not really. On the whole, the government policy should be to encourage private sector to invest and I must admit that from the policy point of view, the Indian Government is on the right track.

What, then, is the problem?

I've a feeling that there is some amount of bureaucracy in the decision-making process. The private sector, once involved in a project, would like to move fast so that it can earn at the earliest. It is, therefore, important for governments, whether in India or China, to ensure fast-track clearance by the bureaucracy.

One of Britain's major port terminal companies is now owned by a Dubai-based group...

Ever since Mrs Margaret Thatcher started deregulating and privatising the port sector, the change of ownership has become a common thing in the UK. Right now the majority of the ports in the UK are owned by outside groups. Overseas pension funds have huge stakes in the UK port sector presumably because these funds find in port investments strong income streams and solid asset base.

Most of the larger ports are now privately owned and managed giving the UK a distinctive competitive advantage. The change of ownership has in no way diminished the expertise the British companies have acquired over centuries in the operation and management of ports.

Many of world's most sophisticated ports are to be found in Britain — ranging from major all-purpose facilities such as London and Liverpool, to container ports such as Felixstowe or ferry ports like Dover. We are also starting to see a growth in specialised terminals.

Are you looking at greenfield projects or existing ports?

We're open to all kinds of opportunities. It is not correct to look at big projects only. Smaller ports also hold out big promises. For example, the company I represent already has 26 per cent equity stake, through its Mauritius-based investment arm, in Vizag Seaports Ltd owning and operates berths in Visakhapatnam port. We, in partnership with two Indian companies, will also hold equity stake in the Chettinad Coal Terminal, which will build and operate two berths at Ennore mainly to handle coking coal imports.

We're also looking at opportunities in some private ports in Gujarat but the discussion is still at the Expression of Interest level. We also looking at new port projects coming up on both east and west coasts. There is so much of activity, so much of development and so much to do.

Will your members also consider participating infrastructure projects required to support port projects?

Yes and no. Much will depend on the kind of projects, the size of investments and the return on investments in these projects. Our members are all private firms and they will not put in money unless convinced of the returns. Also, the government policy is critical in this matter. Will private roadways or railways be allowed? Normally, the development of the hinterland and the connectivity are matters handled by the government.