JNPT, which is India largest container port, handles about 60% of the country?s container traffic. The port, which now works at a higher-than-average capacity, needs to urgently raise its capacity to reduce the turnaround time for ships docking there. NN Kumar, JNPT?s chairman-in-charge, says the port capacity would be doubled over the next four years, helped by a R9,000-crore container terminal project that is in the bidding process. He tells FE?s
Vaishnavi Bala about the port?s investment plans. Edited excerpts:
JNPT is working at a capacity of 115%, which is way above the utilisation levels abroad. How are you planning to increase capacity?
The deficit is very high as we are working at a higher capacity than most other ports. But we have projects lined up that will double our capacity over the next three-four years. For example, we will increase the capacity to handle container traffic to 10 million TEUs (twenty-foot equivalent units) by 2016-17, from the current 4 million TEUs. Completing the overall expansion plans would make us the 10th biggest port in the world, as against 30th now.
How much are you planning to invest on expansion over the next few years?
The direct and indirect infrastructure of JNPT includes new terminals, new jetties, dredging channels, and road development. In the next four-five years, this will require an investment of R15,000-16,000 crore. Out of this, R1,500 crore for dredging will be put in by JNPT, while the balance will be invested through the public-private partnership model.
JNPT and Kandla are also in talks with Iran for developing the Chabahar port. What is the status now. How much will JNPT invest?
We have earmarked about R200 crore for the first phase of development at Iran?s Chabahar port. The Government of India, Kandla and JNPT have been in talks with Iranian officials for the last one-and-a-half years. We have had two rounds of discussions. Both parties agreed that it will be a special purpose vehicle of JNPT and the Kandla port. Our technical team will go to Iran by December to finalise the details, and by the close of this financial year, we will sign the agreement with Iranian officials.
Coming to the PPP model, do you think that this model has garnered enough interest from private players?
One has to first understand that other than the PPP model, there is no other way we can capture the high capacity deficit that currently exists in this sector. Yes, there were some concerns, but now the PPP framework is working well. Earlier there were issues related to fixing of port tariffs for major ports by the Tariff Authority for Major Ports. But now the government has eased tariff fixing for new projects, and made it more attractive for private players to bid for government projects. Now the industry is waiting for the shipping ministry?s proposal in this regard for old projects. For example, we have got a great response till now for the fourth container terminal project. Eight private companies (Indian and foreign) have shown interest in bidding for the project.
As a major port, what is the biggest challenge that you face?
The biggest challenge is the limited time for the execution of capacity addition. If we are not able to add capacity, then trade will suffer and shift to other near ports in the western side like Mundra, Hazira and Pipavav ports. The competition is big as far as container terminal is concerned.