What are the key bottlenecks to increasing our container volumes? The single biggest issue today is the container handling and evacuation capacity in India. Consider the capacity utilisation of the two main container ports in India:
Jawaharlal Nehru Port Trust (JNPT): 100% capacity utilisation of its 4.3 million TEUs capacity
Chennai Port Trust (CPT): ~50% capacity utilisation of its 3 million TEUs capacity
(Ideal capacity utilisation is ~70%)
While JNPT is choked on its terminal handling capacity as well as evacuation capacity, Chennai is completely choked on its evacuation capacity. In fact, liners are levying a congestion surcharge of US$100 per TEU for calling at Chennai.
Privatisation is well accepted in container terminals as it brought much better efficiency to the management of terminals. Today, JNPT’s first container terminal is the only significant terminal managed by a port trust. All the other terminals (including the future planned capacity) are with private operators.
Issues
However, all new privatisation initiatives are facing severe issues, as described below:
The obvious implication of capacity issues is that Indian exports will not be as cost
 competitive (imagine the impact of paying US$100 per TEU due to congestion) and Indian container trade will not grow at its full potential. However, we are witnessing another undesirable consequence of capacity issues. Several ports– which were initially intended as bulk cargo ports– are also now planning to set up container handling infrastructure (CFSs, ICDs, container berths and the like)– to take short-term advantage of the tight situation faced by CPT/ JNPT. Container ports work on scale and large volumes. As volumes grow, the port is able to have high calling frequencies of vessels, allowing traders to manage on tighter inventories and assured delivery times. If we distribute the container handling infrastructure across various ports, we are not permitting scale advantage to any port. Indian ports need more balanced project structuring and a simplified tariff regime, to allow better private participation. We also need accountability at the topmost levels in the government for delays in projects. Most importantly, we need PMO level intervention to clear connectivity issues for ports such as CPT and JNPT. With rising clamour for increased government intervention in giving speed to port projects, we hope Indian trade is allowed to be competitive with appropriate logistics infrastructure.
Neeta Ramnath, Senior Vice President - Transportation Advisory & Engineering Division, Feedback Infrastructure |
Container volumes are a good yardstick for determining the economic and infrastructure development of a country. However, India continues to remain a pygmy as compared to ports such as Singapore, Colombo, Dubai and Shanghai in container volumes.
