Privatisation and modernisation plans and projects for Indian ports are moving at a very slow pace. This despite the fact that the government had liberalised the sector and issued guidelines as far back as in 1996 to attract private and foreign direct investment (FDI) to bridge the huge gap between demand and supply.Privatisation has taken place but only in bits and pieces. Two container terminals in Jawaharlal Nehru Port Trust (JNPT) and Tuticorin have privatised to some extent.
In Chennai, one of the container terminal berths has been leased out to a private company. Coal-handling is also being done by a private operator. Chennai Port Trust's plan to modernise its container terminal with financial and technical support from P&O Ports of Australia on BOT basis is facing hurdles from trade unions. The Tamil Nadu government has long been holding talks with the Malaysian government for development of the minor Colachel port under the Tamil Nadu Maritime Board. The Gujarat Maritime Board has been able to develop some of its minor ports with private and foreign investments.
But efforts to corporatise major ports have made little headway. Yet, the new port at Ennore is going to be managed by the Ennore Port Company Ltd and not by a board. However, it may take years before Ennore becomes a full-fledged port. At present, India has 12 major ports, including Ennore, and 139 minor ports under the jurisdiction of the respective state governments.
Privatisation efforts in these ports are insignificant compared to the investment plans and capacity addition envisaged by the ministry of surface transport. The ministry had announced $7.6 billion for 21 projects in the major ports and port capacity increase from the current 215 million tonnes to 850 million tonnes by 2012.
Meanwhile, Harvard University, which has studied port development in Tamil Nadu, has recommended the Chinese model. The development in port infrastructure in the last two decades in China has been amazing. If India could emulate even a small percentage of that achievement, she can be within reach of her targets, it is felt. The Chinese programmes and projects can be a model not only for Tamil Nadu, but for any state, or for that matter, the Centre, the study adds.
China has 235 ports. Of these, 184 were built during the last 20 years, and 30 of them handle 80 per cent of total shipping. The country has more extensive plans for development of its ports, which include building 2,000 coastal ports, 1,200 of them being deep-water ports. Most of these would be built by provincial governments with support from foreign investment. The Harvard study highlights how China has managed to bring about this development.
The most important lesson from China is decentralised policy-making. The port management is handed over to local municipal authorities with very little federal intervention. This makes them more competitive. The study says "comparative research from China and Malaysia has shown that decentralisation of policy-making and greater decision-making powers to provinces is crucial in accelerating investment decisions for foreign investors". China has a maritime policy that is consistent with international standards and the WTO. This includes:
The introduction of parity in port dues for similar vessels and cargo.
Private participation in other port activities like cargo handling, storage, warehousing, packing and unpacking.
Attracting FDI and allowing joint venture for port activities and other construction and modernisation projects. Integrated development of ports and surrounding hinterland for improving port performance. China has done this by providing links to rail roads, riverways, and roads to major ports. Even remote, land-locked interior areas have been provided access to a minor or major port. Major rivers are deepened and developed so that large coastal and river boats can provide link service from ports to interior areas. China made good use of international institutions like Unctad, Escap, the Asian Development Bank and the World Bank to organise short training courses for employees of port authorities and other government and semi-government organisations. Dissemination of such technical training can be useful for exposure to systems in practice the world over. New Chinese ports have been built using the latest software and computer-aided systems to navigate ships. Hence, these have access to the most modern technology. This is imperative if Indian ports are to compete with international ports. Older ports are also determined to be on a par with newer ports in a few years. Constant review of the situation in ports has led to the adoption of an `action plan' which has been implemented in a timely fashion. The Harvard study suggests that it is very useful for port officials to attend major conferences in the world and host some in association with industry associations. Such conferences can be used to attract more shipowners and shipping companies to register their ships and open offices here, the study says. Attracting foreign shipping companies to open offices in Chennai would be a preliminary step towards more direct participation in investment, auxiliary activities and greater trade. Along with the Centre, the states too have to create jurisdictional space for themselves to speed up the process of private investment for developing new ports, or creating additional cargo handling or modernising existing ports.Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
