Even as the UPA government nears its final months in office, it has achieved virtually nothing in the crucial ports sector ? though its national common minimum programme promised to attach the highest priority to the development and expansion of physical infrastructure in the sector along with roads, railways and airports.
While roads, railways and airports have seen some movement under the UPA regime, the port sector has failed to take off, as crucial elements of the policy puzzle have remained under dispute for most of the time. Even when key documents like the Model Concession Agreement (MCA) were worked out after protracted inter-ministerial wrangling earlier this year, the rest of the elements that had been agreed upon ? like request for quotation (RFQ) and the financing plan ? had become redundant by the time.
Even as the Centre is expected to have a fresh look at the financing plan, the UPA?s ambitious Rs 2.76 lakh crore National Maritime Development Programme (NMDP) is nowhere close to starting though it was to be implemented by 2012. The shipping ministry is yet to submit a detailed action plan for the NMDP, over 34 months after the ?revised? deadline.
The progress in the sector has been very tardy with not a single port project being awarded under the public-private partnership (PPP) during 2007-08. Given the state of affairs in the sector, it doesn?t look like the ministry will be able to meet the targets set by it by 2012. Incidentally, all this time, while the sectoral policy framework moved one step forward and two steps back, shipping minister T R Baalu ensured that expansion work in Chennai and Ennore ports continued.
The department of shipping had set a target of awarding 18 berths in 2007-08 but not even one contract could be awarded because of the government?s failure to resolve internal differences.
Of the five projects awarded during 2006-07 against a target of 15, four were at the Ennore port. The fifth one was the container terminal at Chennai port, to be built under public-private partnership. The berths at Ennore would handle marine liquid, iron ore and coal. During 2005-06 only one project, the Kochi container terminal was awarded.
The NMDP, under which the government plans to spend more than Rs 1,00,000 crore for setting up 76 new berths across all the 12 major ports, was to be originally submitted in August 2005, which was revised to October 2005. After that, even the Prime Minister-led Committee on Infrastructure (CoI) stopped revising the date.
Persistent differences between the Planning Commission and the shipping ministry have delayed the awarding of berths in the 12 major ports. The ministry and the Commission have had differences over several issues, but particularly on the MCA and fixation of tariff for the bidding of berths. While it took three years for the duo to arrive at the final MCA, the awarding of berth contracts have also been delayed by a couple of years, sources in the Planning Commission said.
The retirement of Tariff Authority for Major Ports (TAMP) chairman also added to the delay as the secretary (roads) has also been given charge as the part-time chairman of TAMP. ?The tariff parameters have been decided but there has to be a public hearing. With the secretary?s hands full with roads projects, the process of awarding berths has to wait for some time,? a senior official involved in the process told FE .
The MCA, the standard document that defines the duties and responsibilities of the government and the private partner, on the other hand, was finalised only in January this year after a delay of over two years. The document was supposed to be ready by August 2005. The CoI had to revise the deadline at least seven times till September 2007. ?Officials both in the Commission and the shipping ministry are to be blamed for the delays,? an official admitted.
During the current fiscal, the shipping ministry plans to give out 10 berths, four during the third quarter and six during the fourth quarter. Two of these are expected to come up at Paradip for iron ore and coal. Two other berths would come up at Vizag for liquid and dry bulk cargo. But the CoI has pointed that the time-lines submitted by the ministry are not in line with the RFQ and the request for proposal (RFP). Moreover, these contracts too would have to wait till the TAMP chairman finds time.
Furthermore, the CoI at its review meeting held under Planning Commission deputy chairman Montek Singh Ahluwalia said that the 20 year master plan prepared for each major port with inputs from international experts which also talks about the plan for addition of new berths is not in line with the financing plan suggested by the task force headed by Planning Commission member Anwar-ul Hoda. The submission of the master plan to the CoI was delayed by at least 18 months from the ?revised? target date set for it ? November 2006.
Meanwhile, the Hoda task force is thinking of revisiting the financing plan to fine-tune the document in line with the changing times. ?We are planning to take a re-look at the plan as much time has passed by and nothing much has happened (no projects were undertaken) after the plan has been finalised over a year back,? an official said.
The Task Force had suggested that following the success in operating berths at major ports on PPP basis, and aimed at maximising the inflow of private capital, all new berths taken up after June 30, 2006, at major ports would be constructed through PPP mode, with likely investment of Rs 38,079 crore.
With some ports having funds of their own to meet expenditure on dredging, replacement of equipment and other port-specific activities, it is estimated that investment of about Rs 14,175 crore could be funded through the internal resources of Port Trusts.
The shortfall between inflows from all sources and projected outflow can be met out of market borrowings. But these borrowings would be capped by the ability of port trusts to repay. It is estimated that about Rs 2,174 crore could be raised through borrowings by Port Trusts. Where necessary, the feasibility of loans from one Port Trust to another could be explored, on the lines of inter-firm investments.
The current capacity of the major ports like Paradip, Tuticorin and Haldia are 456 mt comprising 62 mt (5.18 million twenty feet equivalent units) for containers, 162 mt for petroleum, oil and lubricants (POL) and 232 mt for other cargo, respectively. In view of the projected traffic and the need to provide for buffer capacity to meet the surge in requirements, as also the possibility of bunching of traffic, it is proposed to increase capacity at major ports to 1002 MT, which means capacity of about 546 MT has to be built between 2006-07 and 2011-12.
