We will invest R50k cr in new projects up to 2020

Written by Vaishnavi Bala | MG Arun | Updated: Dec 6 2012, 09:45am hrs
Indias largest container port, Jawaharlal Nehru Port Trust, is on a capacity expansion spree. The government-owned port plans to increase its capacity five times in the next ten years. Also, the port is now planning to float two tenders worth Rs 4,000 crore each in February for its new container terminal. The ports chairman L Radhakrishnan tells Vaishnavi Bala and MG Arun that the port plans to spend R55,000 crore on various projects during the rest of the decade as it has a slew of projects lined up. Edited excerpts:

JNPT is looking to increase its capacity. What is the ports target

At the moment, we are doing 4.5 million TEUs (twenty foot equivalent units), but our capacity is only 4 million TEUs. From 4, we are going to 10.5 million TEUs, and then to 20.5 million TEUs in two stages. Since our port is operating beyond capacity, if some ship gets delayed, there would be a chain reaction. We have given windows to ships in such a close formation. From a hand-to-mouth situation, we will be moving to a more efficient situation.

The fourth container terminal, which awarded the project to the Port of Singapore with an Indian partner, has been scrapped. Whats the way forward for the project

The investment in the fourth terminal was pegged at R8,500 crore. But we are hoping to reduce it to around R4,000 crore each. We will float tenders by February next year. There will be two bids for the two different projects, both done simultaneously, instead of the projects being taken one after the other. Whatever time has been lost in the previous bid, we will regain by adopting this method.

What are the projects that the port is now involved in

We have a 2,700 acre SEZ in the pipeline, of which the land development for first phase of 700 acres will be executed in 2013. We also have the Dedicated Freight Corridor coming inside our port by March 2017.

We propose to have a logistics park hopefully by the time the freight corridor is completed.

At present, we are ranked 26th in container ports in the world and expect to be close to 15 by 2020.

Since the company is raising capacity and getting into new projects, what kinds of spending are you looking at

We are already spending about R1,500 crore for dredging from our own reserves. The next stage (to be done as a public-private partnership project) will require R9,500 crore as estimated now. The channel is being designed for a depth of 17 metres, according to the international requirement for deep-draft mother ships. The largest ships in the world now require 16-17 metres of draft and that is what we will provide. We need to conserve our scarce resources for that expenditure and for reclaiming /acquiring land and for future expansions.

For the rest of the decade, we expect an investment of over R55,000 crore on these projects. Its a massive investment, because in the last 23 years of JNPT, we had only two container terminals coming in on a PPP basis and one relatively small liquid berth.

The government had been wanting to corporatise JNPT. What is the status on that

Yes, the government was aiming for corporatisation of JNPT. But this has become an industrial dispute, which is pending before the Central Labour Commissioner. The parties are not just our unions, but unions of all the major ports in India. They want to prevent corporatisation. That has become a policy or even a political issue. If we are corporatised (and Im sure the process can be done if agreed by all, in six months or so) we will become a Navratna company at once as we are eligible to become one in terms of our profitability and scale of operations.

How is the policy on Tariff Authority for Major Ports (TAMP) affecting the company

Our profit before tax last year was around R900 crore. This year it would have been around half of that, but we are trying to see that this does not happen. Apart from the reduction in income, the throughput is being reduced by our private terminal partners because they dont want to do business making losses.This is clearly a policy that is causing a lot of damage to major ports.

The inter-ministerial committee of the Planning Commission has decided in May 2012 for a change of guidelines and/or the TAMP itself.

The port is also looking at renewable sources of energy. Can you tell us more on that. We are a green port. We are planning to generate half of our energy requirements from renewable sources. We have contracted certain government agencies for helping us procure wind energy projects. Initially, we are going in for 7 MW capacity, but we may have to go in for 40-50MW as the SEZ comes.