Expanding port capacities

Updated: Jul 31 2006, 05:30am hrs
A massive 59 mt capacity addition in the 13 major ports last year more than double the capacity addition in any of the previous three years has pushed up total capacity to 456 mt, just a little short of the targets for the next year. And it is not just a blip, as trends indicate that the capacity expansions have more than matched the buoyant external trade volumes. Though the additions have helped increase the overall unutilised capacity at the major ports to 7%, there is still serious mismatch between demand and supply at some of the larger ports. Five of the major portsMormugao, JNPT, Vizag, Mumbai and Haldiacontinue to operate above full capacity, and Kandla and Chennai ports also run close to full capacity. In contrast, Paradip, with the largest capacity addition of 12.4 mt last year, has been only able to utilise two-thirds of its potential. Idle capacity at Kochi and Ennore ports are more than a quarter.

The congested ports have pulled down the overall performance indicators. Average pre-berthing time has almost doubled in the past three years, to close to 10 days. At Mormugao, Kandla and Haldia, the waiting time runs up to 30 days. In contrast, pre-berthing time at Kolkota, Chennai and Ennore ports were less than a day. Though deterioration in the average turnaround time was only marginal, it still averaged 3.5 days, double that of much larger ports like Hong Kong. The worst affected were Kandla, Mormugao, Mumbai, Kolkata, Vizag and Haldia, with turnaround time exceeding four days. The lowest was at JNPT, at less than half these levels.

There are also problems related to low cost efficiency that plague Indian ports. The ratio of freight payments to trade value is double that in developed countries. This is a major constraint for our exporters, who are also handicapped by an excessive large lead time of 22 days, compared to seven days in China and just three in Korea. Only a more streamlined approach and larger investments will help Indian ports to emerge as a regional hub, like Singapore, Colombo or Dubai. Regulatory issues also remain unresolved. And, the port authority is both a regulator and an operator with commercial responsibilities. Efforts to bestow a corporate structure and help the ports retain greater autonomy have been slow, with only one port having been corporatised. Reforms in the sector have to be continued with greater vigour.