India’s container capacity at 12 ports is less than 1/4th of single Chinese port of Shanghai: ASSOCHAM
Development of non-major ports to spur job creation & investments in Odisha
Bhubaneswar, December 12, 2017: India’s total containerized cargo capacity of 8.75 million TEUs (twenty-foot equivalent units) at all its 12 major ports, a key indicator of a country’s integration with global supply chain for value-added manufactured goods, is less than a quarter of containerized goods handled at China’s single port of Shanghai, making it imperative for us to do a fast catching up, an ASSOCHAM comprehensive study on ports has pointed out.
The study titled ‘Indian ports sector: Challenges of scale and efficient operations,’ was released by ASSOCHAM secretary general, Mr D.S. Rawat along with chief advisor, Dr Arvind Kumar at a press meet held in Bhubaneswar today.
Highlighting the importance of port development, Mr Rawat said, “The Orissa High Court decision to dispose of case pertaining to setting up 13 non-major ports along its 480 kilometre (km)-long coastline will further boost the prospect of port infrastructure, bring in investment, create thousands of jobs and also add to the revenues of the state exchequer.”
Though India’s ports have met in rapidly expanding traffic, handling more than a billion tonne of cargo in 2016-17 and the capacity is expected to increase to 2.5 billion tonnes by 2025, the freight mainly comprises POL (petrol, oil, and lubricant), coal, iron ore and other commodities.
It is only recently that freight in containers, which are easy to load, unload and can be carried to the hinterland through multi-modal transport, is catching up in India. Besides, it is the containerized traffic which reflects the level of manufacturing and value addition a country has achieved for itself in the global market.
“Total containerized cargo volume for the whole of India’s major ports is about 8.5 million TEUs, which is less than a quarter of volume handled by the largest container port in China, Shanghai (36.5 million TEUs). China has four ports which handle more than 20 million TEUs, Shanghai, Shenzhen, Ningbo & Zhoushan and Hong Kong China.”
Even on the parameter of overall cargo, both with or without containerization, India has a fragmented capacity at different ports. In China, there are six cargo ports which can handle over 500 million tonnes cargo per annum and it has another eight ports which handle cargo more than 100 million tonnes up to 500 million tonnes.
Commenting on the infrastructure in India, Mr Rawat said, “The port scaling in China is not only ahead of us, but it over-awes even the major countries. Of the world’s top 20 ports, 14 are in China. No Indian port figures in the world’s top 20.”
“In contrast, India has just two ports which handle beyond 100 MT – Kandla and Mundra. Fragmentation of port capacity in India is demonstrated by the fact that India’s 12 major ports handle cargo far less than Shanghai port. Large productivity gains can be achieved by improving existing ports at a much lower marginal cost,” the study noted.
The ASSOCHAM report said that use of containers is imperative to promote multi modal transportation. These containers can travel across all modes. “Container is a transport unit as well as a logistics unit. Containers save handling costs when freight must be transferred from one mode to another (example – from ships to trucks or truck to rail); this calls for cost effective models with ready infrastructure.”
The study also suggested that it would be appropriate to augment capacity of existing ports to create ports with large capacity of 100 million tonnes (MT) rather than creating new ports and spreading resources thinly.
Noting that for India to remain competitive globally, investment in port capacity is a must, the report stated that industry needs to address how to identify, fund, operate and make targeted infrastructure improvements in key elements of maritime transportation system. “India needs to spend more and better in maritime infrastructure.
It also said that the proposed national ports strategy should include a clear articulation of function and hierarchy of India’s ports within context of a national supply chain.
“A key outcome of ports strategy should lie in determining a hierarchy for India’s container and resource ports which takes into account future growth and potential landside bottlenecks which may impede growth,” said the ASSOCHAM study.
It also recommended the need for India to revisit the Major Ports Trusts Act, 1963 with a view to modernise the institutional structure of major ports and to secure greater operational freedom for ports, in tune with present day requirements.
The study further said that a single-window clearance is required to promote ease of doing business in the ports sector. “Private port operators are already introducing automation and technological advancements, this should be complemented by improvement in customs procedures.”
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations, and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on www.assocham.org