Steep volume drop could propel JNPT self-operated box terminal towards privatisation

A steep fall in volumes handled by the container terminal run by Jawaharlal Nehru Port Trust (JNPT) itself in FY20 could expedite the chances of privatising the only such facility operated by a government-owned port authority across any of the 12 state-owned major ports in India.

J N Port Container Terminal (JNPCT), one of the five container terminals operating at JNPT, handled 720,000 twenty-foot equivalent units (TEUs) in FY20 from 1.04 million TEUs in FY19.

In three years, JNPCT’s volumes have tumbled by more than half from 1.53 million TEUs in FY17 to 1.48 million TEUs in FY18, 1.04 million TEUs in FY19 and 720,000 TEUs in FY20.

JNPCT is an oddity among such facilities at Indian ports where container terminals are run by private specialists in the field, such as PSA International Pte Ltd, D P World Pvt Ltd, A P M Terminals Management B V and Adani Ports and Special Economic Zone Ltd (APSEZ).

D P World runs two separate terminals at JNPT, while PSA International and A P M Terminals operate one each.

“We are looking at the possibility of privatising JNPCT; what can be the most suitable model to improve its efficiency and productivity,” a shipping ministry official said. “Because, the business is shifting to other terminals in JNPT,” he added.

PSA International-run Bharat Mumbai Container Terminals Private Limited (BMCT), the newest of the five terminals at JNPT, benefited the most from such a shift in volumes away from JNPCT.

BMCT handled 800,000 TEUs in FY20 from 503,000 TEUs last year, posting a growth of 55.51 per cent.

“JNPCT has been handling container cargo by default,” said a port consultant. “It had sufficient cargo till JNPT had four terminals. But once PSA started a new terminal with huge capacity, JNPCT was destined to suffer,” he said.

One big handicap

Apart from lack of infrastructure such as modern cranes to load and unload containers and compete with private rivals, JNPCT has one big handicap that is unique to it, compared to private operators. That handicap is its single terminal status with a quay length of 680 metres.

Big guns in the container terminal industry typically leverage their large terminal network presence globally to attract shipping lines, their main clients that bring business.

It is common in the terminal industry for operators to ask a container carrier to call at its facility, say, in JNPT, if it wants a berthing window at any of their terminals elsewhere globally and vice versa.

“JNPCT being a single terminal operator does not have that clout to either retain a line or attract new lines to its terminal,” the port consultant said.

“If JNPT were to privatise the terminal, surely it would attract bidders,” said an executive with one of the top global terminal operating companies. “There will be some social issues, but at least, like elsewhere in the world, privatised ports/terminals do tend to get better results. And, the government will certainly earn more if it is done via revenue-share model,” he said, adding that a sale would also attract more funding into the terminal to boost its performance.

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