REGISTRAR OF NEWSPAPERS OF INDIA
NO: DELENG / 2017 / 70663
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NITIN GADKARI : “SHIPPING SECTOR MADE A PROFIT OF RS 6K CRORE, FIRST TIME IN INDIA'S HISTORY”
By SEA AND COAST | 03/05/2017

Nitin Gadkari, BJP stalwart and Union Minister of Shipping and Road Transport & Highways, is among the best performing ministers of Modi-led Union Government. Always on the toes, he is known to be a tireless man, earning praise even from the opposition parties. He speaks to Shitanshu Shekhar Shukla at his residence in spite of a punishing schedule since previous day, literally left with little time to catch a breath. Yet, such huge confidence of people does he enjoy that the crowd waiting for him at lawn or outside is much assured.

 

Q. Half of your tenure down the line, what is the visible impact of your leadership and vision in the shipping sector?

A. Our 12 major ports and 3 flagship organisations – Kochin Shipyard Limited, Shipping Corporation of India and Dredging Corporation of India –for the first time have posted an impressive profit for two consecutive financial years. In 2016-17 our cumulative profit has registered an increase of 21% as compared with the previous year. Our growth is faster than the private ports in the country.

This has been possible by our government's priority to reducing the turnaround time of ships and adding various non-core commo-dities to its freight basket.

The profit of all shipping corpo-rations will be much more as the numbers for Shipping Corporation of India BSE 7.61 % and Dredging Corporation of India BSE 1.47 % are yet to be reported. Let me tell you our success story in details. There is more to this historic turn around than just the profit.

In 2016-17, Goa's Mormugao port posted a growth of 60%, the highest ever recorded by any port in the country.  On the other hand, JNPT reported the highest-ever profit of Rs 1,303 crore.

Major ports have shown significant growth since 2014 as the volume growth increased from 555 million tonnes to 648 million tonnes in 2016-17.

You will be surprised to know that the traffic at major ports has been steadily growing.

It reached a record level of 647 million tonnes during Fy17. Also, let me tell you that we are building two smart cities at Paradip port and Kandla port.

The shipping ministry's focus in the current financial year will be to add capacity of 103 million tonnes and develop Mumbai port as the country's hub for cruise tourism.

I give full marks to my team in the Shipping Ministry as well as all those managing our ports and other undertakings with dedi-cation. Our efficiency, discipline, innovation, mechanization and modernization of ports have ignited the latent potential into a success story.

We have already started working on port-led development, port-led connectivity which has, if realized, the potential to make money to the tune of Rs 1 lakh crore. Some of them are covered either by Sagarmala project or by the ports. The sector is moving very fast. JNPT is the first major port to raise Foreign Denominated Loan of US $400 mn. Kamarajar Port Limited [Ennore] (KPL) is also in the process of raising USD $100 million foreign currency loan.

This mode of financing at low interest rates and natural hedging has been followed in the Major ports for their infrastructure development for the first time. We are now planning to develop inland waterways. We have already passed the bill for making 111 river waterways. Our objective this year is to complete 10 waterways. We will complete that.

Q. Our magazine extensively covered Sagarmala project in February issue. It is being touted as a sort of panacea to the static inertia holding the movement of cargo across the ports. How close will the Sagarmala project take the country to the port-led prosperity?

A. We got a study completed by an international consultant. We expect an investment to the tune of Rs 12 lakh crores in the port-led development with the industrial clusters. It will be a coastal economic zone, abound with petroleum sector, automobile sector, chemicals etc spurring export and hence creating employment opportunities. I reckon that the Sagarmala project will catalyse the port sector. We are already moving at 22 kms road a day in road sector. Our target is to create and give employment to 5 crore youths of the country.

So the sector is moving. The port sector and road sector alone will contribute 3 % of growth rate to our GDP.  The maiden Maritime India Summit, 2016 was held on 14–16 April 2016 at Mumbai.  141 Business Agreements amounting Rs. 83000 crores (approx.) were signed during the Summit. While 24 MOUs/Business Agreements have been completed during 2016-17 amounting Rs. 10411crores (approx.), 100 MOUs/Business Agreements with an investment worth Rs. 75,714.13 crores are under implementation.

Q. Iran ambassador to India Gholam Reza Ansari said last month, “in coming months we will be inaugurating first phase of Chabahar port” and wanted India to increase its cooperation in the project. He is concerned that India is not fast enough. How do you look at it?

A. Actually, we are moving very fast and in a transparent manner in Chabahar Port Development. Purchase of Equipment for Chabahar Port Development is under process.  MEA released Rs. 100 crs  to IPGL.  RFQ uploaded for selection of SPV partner at Chabahar.

Q. Kindly tell us about the Port rail connectivity projects and how they are being funded?

A. A new Special Purpose Vehicle, namely Indian Port Rail Corpo-ration Limited has been set up as a public limited company to undertake last mile connectivity projects in Major Ports so as to improve their handling capacity and efficiency.

We will raise funds for the Indian Port Rail Corporation through external commercial borrowings (ECB) mode in USD terms for every $4,000 crore, and there will be no requirement for hedge for an ECB upto $50,000 crore. JN Port was the first port to raise fund through ECB mode for its infrastructure development, and similarly all major ports will have to raise funds through ECB, and some part of which will be spent on port connectivity projects.

Indian Railways is funding 50 per cent of the project cost for the Indore Manmad-Dhule rail linkage, and remaining 50 per cent funding is supposed to be funded by the state governments of Maharashtra and Madhya Pradesh, which is now funded by JN Port since 47,000 containers are coming from Indore to JN Port.

Currently, due to congestion in Ahmadabad and Mumbai rail corridor, it takes 12-15 days for container rails to cover the distance.

Hence, we are contem-plating Indore-Manmad-Dhule rail linkage as an alternate rail route for container rails coming from northern regions like Punjab, Haryana, Uttar Pradesh and Delhi.

Q. Modern maritime trade is demanding new strategy and new ideas. Is it not time the major ports were run by professionals?

A. True. We need the major ports to be professionally managed and run. We have 12 major ports now and decided to develop six more major ports. So we need people with good managerial skill and rich experience in international maritime sector.

We stress a lot on imparting training and port officials are now visiting ports in Europe and other parts of the world. In recent times the efficiency of some major ports has improved as compared to private ports.

Q. Could you share the plans, if at all, to help shore up the profits of Shipping Corporation of India and Dredging Corporation of India?

A. We have taken several decisions about these two organisations. We are also going to convert debt by SCI into long-term foreign currency loans, besides trying to get more business from Ministry of Petroleum. Some administrative reforms are also on the anvil.

 

MILESTONES

  • The traffic in the Major Ports has been steadily growing. It reached a record level of 647.63 Million tonnes during 2016-17 with an annual growth rate of 6.79% as against 4.32 % in 2015-16.
  • Kandla Port retained its top position in cargo handling among all the Major Ports. Kandla Port handled 105.44 Million tonnes (+ 5.39%), followed by Paradip Port 88.95 Million tonnes (+16.45%) and Mumbai Port 63.05 Million tonnes(+3.17%).
  • JNPT recorded highest ever handling of 4.50 million TEUs during 2016-17. The Port owned terminal, JNPCT, achieved highest ever handling of 1.53 million TEUs during 2016-17 registered a growth rate of 7.33%.
  • Among commodities handled, iron-ore traffic picked up again attaining the highest growth rate of 163.67%. Other miscellaneous and General Cargo grew by 18.53% and POL products by 8.16%.
  • The Major Ports have achieved the highest ever operating surplus during 2016-17.
  • JNPT net surplus has crossed Rs. 1300 crores (as against Rs. 1091 crores of 2015-16).
  • Kandla Port posted its highest ever net surplus of Rs. 651 crores during   2016-17, an increase of 54.4% over last year profit of Rs 422 crores.
  • Highest ever capacity addition of 100.37 Million tonnes (MT) in Major Ports was recorded during 2016-17. Major Ports capacity during 2015-16 was 965.36 MTPA. This crossed 1065 MTPA during 2016-17.
  • In respect of development of Port infrastructure, 56 projects have been awarded with a capacity of 103.52 MTPA against a target of 102 MTPA with an investment of Rs. 9490.51 crs. during 2016-17.
  • Efficiency indicators in Major Ports are steadily improving.  During 2016-17, total turn-around time came down to 3.44 days as against 3.64 days during last year.  Likewise, Average Output Per Ship Berthday has gone up to 14583 tonnes as against 13748 tonnes during last year.
  • Major Ports have been benchmarked to international standards. 116 initiatives were identified. Out of these, 70 initiatives have been implemented and remaining will be implemented by 2019. This has resulted in unlocking 80 MTPA capacity. Implementation of these initiatives would further improve the efficiency & productivity of the Major Ports.

 

POLICY REFORMS INITIATED BY THE MINISTRY INCLUDE

1.  New Captive Policy guidelines were issued in July, 2016 to ensure uniformity and transparency in the procedure for awarding captive facilities in the Ports. This will allow concessionaire to handle non captive cargo upto 30% of the designed capacity of the berth.

2.  New Berthing Policy came into effect from August, 2016.  This policy provides standardized framework for calculation of norms, specific to the commodity handled and infrastructure available on the berth. This will improve the efficiency at ports and productivity norms across ports.

3.  New Stevedoring Policy has been implemented since July, 2016. This will improve productivity, efficiency and safety in the ports.

4.  The existing Model Concession Agreement of 2008 is under process of revision which will address the concerns of PPP projects and prevent them from getting stressed.

 

LEGISLATIVE REFORMS

  • Major Port Authorities Bill has been introduced in the Lok Sabha in December, 2016 to modernize the institutional structure of the ports to usher in professional governance in the ports.
  • Dredging of Mumbai Channel and JNPT Channel phase – II has been awarded to increase draft upto 15 meters at an estimated cost of Rs.  1963.17 crore.
  • Smart Port Industrial Cities are being developed at Paradip and Kandla. Master Plans have been finalised.
  • Multi Modal Logistic Park is being set up in Paradip.
  • Mumbai Port has become Home Port for cruise tourism.  The Asia's largest passenger ship 'Genting Dream' with a capacity of 3,400 guests anchored at Mumbai Port on 29th October, 2016.  The ship also ferried 1,900 passengers from Mumbai to Singapore via Colombo. 51 cruise vessels have called at Mumbai Port during 2016-17. A total number of 158 Cruise vessels anchored at 5 Major Ports during 2016-17 registering an increase of 23% over 2015-16.
  • Towards facilitating 'Ease of Doing Business', Ministry of Shipping had identified 10 parameters, which include elimination of Form 11&13, Accommodation for laboratories to Participating Government agencies (PGAs), Direct Port Delivery, installation of container scanners, E-delivery orders; RFID based Gate-automation System, etc. These initiatives have already been implemented at JNPT and being taken up in other Major Ports.
  • In addition, 42 action points were identified for reduction of dwell time, transaction costs and ease of doing business, specifying responsibility of concerned stakeholders/agency which were closely monitored. 35 action points have been achieved. Direct Port Entry increased to 74% in March, 2017 from less than 60% in September, 2016. Direct Port Delivery  increased to 18% in March, 2017 from less than 3% in September, 2016. This has reduced dwell time for imports from 58 hrs in 2015-16 to 44 hrs in 2016-17 hrs and export dwell time from 88 hrs in 2015-16 to 78 hrs in 2016-17.
  • JNPT has been the first port to start Direct Port Delivery and Direct Port Entry. This has also been initiated at other Major Ports handling EXIM containers.
  • 6 Major Ports have implemented Radio Frequency Identification System (RFID) which has reduced dwell time, transaction time and eased congestion. The remaining Major Ports are in the process of operationalising RFID and would to be completed during 2017-18.
  • To promote clean fuelled vessels, regulations for LNG vessel and bunkering facilities is being formulated by PNG and Shipping regulators.
  • Non conventional energy - The 24.32 MW projects commissioned at various Major Ports in 2016-17 for solar and wind energy projects.
  • Swachh Bharat Abhiyan - All Major Ports have adopted and implemented 22 Point Agenda under Swachh Bharat Abhiyan and 12 Point Agenda as per IMO guidelines under Green Port Initiatives. All the Major Ports have been inter-se ranked in terms of implementation of Swachh Bharat programme. Green Port plan, including reuse of water (STP) is being drawn up for all ports.
  • Chennai Port and Pondicherry Port has signed an MOU on 14.3.2017 for converting Pondicherry Port as Satellite Port to Chennai Port.  This agreement will help to revive the commercial operations of Pondicherry Port as there is a huge potential for coastal movement of  EXIM cargo especially container cargo from the Pondicherry port hinterland.
  • 98% Cashless transactions have already been achieved in Major Ports. More than 98% pension payments have been linked with Aadhar.
  • Digitisation of land records has been completed in all Major Ports.
  • To maintain transparency in the tendering/procurement as per the CVC guidelines, e-tendering process has been introduced in land allotment.
  • Independent External Monitors are in position at all the Major Ports for improving the oversight mechanism of contracts.



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