As per industry estimates, total cargo handling capacity of the major ports may increase to 743 million tonnes by the end of the 11th Five Year Plan, falling short of the target of 1.02 billion tonnes With the global financial crisis slowing down investments in the last 1-2 years, India’s port capacity expansion plans is set to suffer a jolt. The target set for the 12 major ports was a total capacity to handle 1.02 billion tonnes of cargo by the end of the Eleventh Five Year Plan. However, industry experts estimate port capacity to expand to a maximum of 743 million tonnes (mt) by March 31, 2012.
“Going by the estimates, state-owned ports are going to miss their target by quite a distance. But there were genuine factors for the slow growth of the sector. Hit by the recession and the subsequent global demand slump, the port sector had no chance of pushing its growth in the last 1 year or so,” says NS Rathore, proprietor of Indian Overseas Cargo Carriers, a mid-sized logistics firm in New Delhi.
However, analysts opine that now with the global economic scenario gradually improving, it is the right time to make investments in the port sector. In the aftermath of the economic downturn, commodity prices as well as interest rates have dropped sharply, thereby bringing down the cost of port development. Therefore, it is ideal to invest money towards port expansion now.
 Small LSPs hopeful
Besides the major ports, small and mid-sized players engaged in logistics activities at the ports are eagerly hoping for more investment to flow into the port segment. “Unless there is an expansion in capacity, there will be no increase in business. If the ports are not able to take up more consignments, it not only hinders their growth but also ours,” says S Prakash, director of Sterling Shipping Services, a small-sized logistics service provider (LSP) in Bengaluru.
Considering that small logistics players require a continuous flow of cash to sustain business, for expanding their business they need more orders, which can happen only when ports increase their capacity. Prasenjit Das |
