India Aims to Improve Port Infrastructure and Enhance Nation's Economic Growth

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Researched by Industrial Info Resources (Sugar Land, Texas)--The authorities of the New Mangalore Port Trust (NMPT) (Mangalore, Karnataka) might build a new container terminal themselves after failing to get it done through the build-own-transfer route. NMPT is now likely to build the terminal at an estimated cost of about $63 million and lease it out to a private operator. The project involves the conversion of Berth No. 18 into a container terminal with the capacity to handle almost 400,000 TEU (20-foot equivalent units) per year of container cargo. The dimensions of the proposed terminal are a quay length of 300 meters, a depth of 25 meters and a draft of 15 meters. The terminal is expected to easily handle Panamax container ships, with carrying capacities of more than 2,500 TEU.

The company's earlier call for expressions of interest for the project had received 13 responses; out of that, five consortia were shortlisted for the next stage of request for qualifications. However, when it was time to submit their technical and financial bids in April 2010, none of the five responded. The lack of interest was reportedly because the tariff fixed by the Tariff Authority for Major Ports (Mumbai) was not economically viable for the consortia. The project was to have been developed under a 30-year concession period.

The other projects currently being implemented at the port include the construction of a coal berth on the build-own-transfer model; the mechanization of the iron-ore berth; and the construction of a petroleum, oil and lubricant handling berth. The 3 million-ton-per-year coal berth is scheduled to be commissioned in December this year and will be utilized by the Udupi Power Corporation Limited (UPCL) (Bangalore, Karnataka) to handle the coal imported for its 1,015-MW thermal power plant at Kolachuru in Karnataka's Udupi district. UPCL is a subsidiary of infrastructure major Lanco Infratech Limited (BSE:532778) (Hyderabad, Andhra Pradesh).

The contract for the iron-ore berth project has been awarded to SICAL Logistics Limited (BSE:520086) (Chennai, Tamil Nadu), while the POL berth contract is expected to be awarded in the near future.

During an interview in August 2010, K. Mohandas, India's Secretary of Shipping, said that the nation's port capacity would be tripled within the next 10 years in an effort to improve the existing infrastructure, which is threatening to adversely affect the country's growth. He said that ports were very important for the economic growth of the nation and that the government's 10-year plan included the building of new harbors and selling of stakes in port projects, such that an annual capacity of about 3.2 billion tons could be reached. However, he also said that Indian ports were most likely to be able to handle cargo loads of more 2.5 billion tons per year by 2020. The current capacity of the nation's ports is about 996 million tons per year.

India's $21 billion National Maritime Development Program includes $12 billion that will be spent on ports. The $21 billion plan involves 276 capacity expansion projects. In July 2010, bids worth $5.4 billion for 25 public-private port expansion projects were invited. Contracts for the projects are to be awarded by March 2011, and the expansion projects are expected to be executed in March 2012. About 24 public and private sector participation projects worth about $1.6 billion have been completed, while another 19 such projects worth about $2.8 billion are being implemented.

Concessions for two new terminals at Mumbai's Jawaharlal Nehru Port will be granted by March 2011. One of the terminals will have a capacity to handle more shipments than the existing three terminals. The port may be turned into a corporation before the end of the current fiscal year and become India's first corporate port.

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