India?s first corporatised port, the public sector Ennore Port Ltd (EPL), is creating history. In 15 years, it will have the capacity to handle over 80 million tonne of diverse cargo. Investments by the company and the private sector would exceed Rs 5,000 crore. Other major ports took several decades to come close to this level of investment or capacity. Though born only in 2001, EPL has become a model for the development of ports in the country. It has set the course for other major ports? foray into the global business.
Ennore port was proposed to be set up as an extended arm of the Chennai port, mainly to import coal for TNEB?s North Chennai thermal power station. But in tune with the global trend, the proposal was streamlined to create the first corporate port in the country. The cargo profile was extended to the other bulk cargoes like iron ore and chemicals.
To provide the required volume of cargo, to attract private investment and carve out a niche for itself, it was envisaged to develop EPL as a mega port with world-class facilities. It was planned to become the eastern gateway port of India, providing port services of international standards with private sector participation.
EPL has succeeded in this. According to the chairman & managing director of EPL, S Velumani, ?it has facilities to handle coal and a privately owned marine liquid cargo facility. By August 2010, there will be two more terminals ready to handle coal and iron ore. Both are built by private companies. EPL is building a terminal to handle cars and project cargo. Plans are under way for a container terminal as well as an LNG terminal to be built by developers or users without any budgetary support so as not to be a drain on the national exchequer. By 2015, it will have capacities to handle 80 million tonne of cargo comprising coal, iron ore, containers, and LNG.?
EPL was floated with the Union government and the Chennai Port Trust as equity partners. It got liberal credit support from the Asian Development Bank to build the basic infrastructure like break-waters and harbour basin. To begin with, EPL built two coal berths with a capacity to handle 16 million tonne of coal for TNEB. TNEB engaged Sical Logistics to handle the coal and deliver it at its power station through a conveyor system.
In the present socio-political context, Ennore is a model hard to emulate but necessary to survive and succeed against the increasing competition from other far advanced ports in India?s neighbourhood. The liberalisation of world trade and opening up of economies brought in a sea-change in the ownership and operational set up of major ports. By the mid-1990s, close to 90 of the 100 major ports in the world had moved from a service provider model to landlord port system. India is still hesitant in this regard, even a decade after the creation of the first corporate port and witnessing its resounding success. The latest news is that in 2010-11, the government may initiate the process of corporatisation of three major ports, beginning with Mumbai?s Jawaharlal Nehru Port Trust. In a corporate set up, the port authority retains the infrastructure and regulatory functions and the private operators provide the port services. Manpower in the payrolls of the port company will be the very minimum. EPL, for instance, has only about 70 staff, though more than 2,000 people work in the port area.
A wholesale transformation of major ports operating under the Port Trust Act to corporate entities under the Companies Act?with an independent board of directors empowered to hire and fire employees?could meet stiff opposition. The government has to find a way out for the benefit of the nation?s future economic growth. The continuation of the present set up may save the jobs of the existing staff, but there is no guarantee that the trust-controlled ports would be able to stand up to emerging global challenges and competition and create and retain jobs for the next generation.
Unless there is fast-track development in infrastructure and qualitative change in cargo handling and allied services as well as competitive tariffs vis-?-vis other Asian ports, Indian ports would be heading to an uncertain future. Ennore, however, provides the answer to overcome the uncertainties that cloud the horizon.