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Port Project Delays: A Setback to Indian Port Sector
Prof Sham Choughule, Visiting Faculty, Mumbai University Member, Port and Logistics Committee Maharashtra Chambers of Commerce & Industry Shipping Ministry of India has been in the doldrums for quite some time now because of huge delays in implementation of port projects. Main reasons for delays in port projects are security clearance, complicated bidding process, poor response of developers and court matters. Th is article reviews the current status of various port projects and tracks causes of delay of the same. Th e total capacity of 22.2 Million TEU of these projects has been stuck up since last fi ve years.

The mega container terminal of Chennai, 4th container terminal of JNPT, Vizhinjam port project of Kerala, Rewas port of Maharashtra and Offshore container terminal of Mumbai port are delayed. The security clearance, complicated bidding process, poor response of developers and court matters are considered as major reasons for the delay. Consequently, India has not been able to achieve the target of its capacity expansion. The capacity of ports is not keeping pace with growth of trade and some of the ports are heading towards congestion.

Therefore, shipping ministry has decided to ensure time-bound implementation of port projects worth 35,000 crore and a capacity addition of 244 million tonnes in this financial year. According to the experts, this is an unrealistic target. There were 42 projects in pipe line in port sector. All these projects are supposed to be awarded by March 2013. But actually three has been awarded yet, and the targets remain on paper. Most public private partnership projects have just not taken off due to approvals and security and environment clearances.

Sagarmala Project
Sagarmala project was announced by the then Prime Minister A B Vajpayee in August 2003 when Shatrughan Sinha was the Shipping Minister. The project targeted an investment of 1,00,000 crore. However, with the change in government in Delhi, the Sagarmala project was later renamed National Maritime Development Programme (NMDP) in August 2004. NMDP had fixed a budget of 55,803 crore for creating the additional capacity of 434 Million Tonnes (MT) in five years over-and-above the existing 574.77 MT. On completion of NMDP, an addition of 402.91 MT capacity is envisaged by 2011- 12, and overall capacity of major ports is expected to reach 800.41 million tonnes. Again in May 2012, the PM announced a capacity addition of 244 MT and an investment of 35,000 crore.

4th Container Terminal of JNPT : Bidder Abandoned Project?
A consortium of PSA and local firm ABG Ports Ltd was awarded the project on 26 September 2011 after it emerged the successful bidder in a public auction. PSA is the lead partner in the consortium with a 74 per cent stake with ABG holding the balance. One of the most ambitious port projects, the 6,700 crore fourth container terminal at the Jawaharlal Nehru Port Trust (Navi Mumbai), awarded to a consortium led by the Port of Singapore Authority (PSA), is still in limbo with the company refusing to pay 50 crore stamp duty. JN Port had asked the firm to sign the concession agreement which ended on 10 September 2012. But till today, it has not been signed. This project is delayed for seven years and still there is uncertainty. Meanwhile, the port handled 4.32 million standard containers ending financial year March 2012. This is more than its designed capacity of 3.6 million TEU a year.

Mega Problem of Mega Container TML –Chennai
Mega container terminal project of Chennai is delayed for five years and still the port authority is in search of a developer. Actual length of Mega Container terminal is 2 KM. But Chennai port has passed on the responsibility to construct break waters of 4.48 KM to the developer. The construction cost of break waters is more than the cost of original project of the container terminal. Again, the life of breakwaters is 100 years and that of the Terminal project is BOT 30 years. This is a case of mismatch. According to the experts, this project will not be economically viable. Therefore, there is less response to this project, and the port is floating global tender again and again.

330 metres standalone container terminal of JNPT is also not coming up after five years. Reliance Rewas port in Maharashtra is also too delayed and is encountering many problems. Ennore container terminal is in troubled waters and the port management is about to re-float the tender for the new developer. Many ports projects are not coming up and the projects under construction are delayed. This is a set back to Indian port sector. All the above projects are time over run and cost over run.

Other Projects
There are other PPP projects that the government aims to award this year. Amongst these is construction of six riverine jetties at Kolkata Port at a cost of 300 crore with 4.5 million tonnes capacity. Besides, in Paradip Port Trust, the new coal terminal is still in limbo due to certain clearances, which are yet to come. Some of the projects awaiting security clearance include Conversion of berth No 8 as Containers Terminal at V O Chidambaranar (Tuticorin) Port, oil jetty at Haldia in Kolkata Port Trust - which has been in suspended animation since 2010-11.

Security Clearance
Adani Port and Punj Lloyd have been denied security clearance for the coal import terminal at the Government-controlled Mormugao Port in Goa; Lanco Infratech has been denied Container terminal projects permission for the cargo berth facility at Tuticorin Port. Now, new guidelines have been issued to streamline security clearance proposals to remove bottlenecks in award of port development projects.

Vizhinjam Port Project
The blue print of this project was conceived way back in 1995. The concrete step in this direction was taken only in 1999, when the Government signed BOT agreement with Hydrabad-based Kumar Energy Corporation. This agreement was terminated in 2002 due to non-performance of the company. Subsequently, the Kerala Government had planned this project again in 2003. Accordingly, Techno-Commercial Feasibility Report was prepared by L&T Ramboll Consulting Engineering Ltd in February 2005. The 1st global tender was floated in July 2007.

Many a time biding date had been extended. At last only five bidders were selected for the RFQ stage, and they submitted the offer on 31 Jan 2008. The RFP project was then allowed to Lanco Infratech. Therefore, Zoom Developer went in court of law against Kerala Government. After that no developer came forward for this project. When the Government floated tender for the 2nd time, only Mundra Port, SEZ Ltd and Welspun Infratech Limited were in the fray. Welspun Infratech was the only bidder left in the fray after the Union Ministry of Home Affairs denied security clearance to Adani Ports and SEZ. It is understood that Kerala Government is planning to re tender this project once again.

Off Shore Container Terminal of Mumbai Port
As per JAICA-Japan International Consultancy Agency, Mumbai port had undertaken this project. BOT contract was awarded to Gammon India and Dragons of Spain in 2007. Now Dragons has quit the consortium and only Gammon India remains to handle the project. Even after four and a half years, only 75 per cent of the project work is completed.

Hub Port Problem
Shipping ministry has also planned four hub ports — two on each coast. This project is proceeding at a very sluggish pace. Meanwhile, the Government plans to set up one major port in each maritime state. All the maritime states have been asked by the ministry to give possible options for the construction of the port. Only four maritime states have been suggested the site. But there is no sign to set up the major port due to various reasons.

Summary
According to industry players, apart from the issue of clearances, there are other inadequacies with the Public- Private-Partnership (PPP) model. The risk allocation in PPP is completely against the private parties and the government is not sharing any part of it. The Ministry plans to award projects to create a capacity of 244 million tonne during 2012-13. This is spread across 42 projects at an estimated cost of ` 14,500 crore. The Ministry has also given targets to all the ports for the dredging work so that 12 m draft can be provided to bring in bigger vessels. But presently many projects are not coming up as per schedule.