IntroductionPorts have played an important role in the economic development of India and its vast hinterland, and are an important infrastructural resource for the countrys trade. Ports are one of the key infrastructures of the maritime transport of a country (Ghosh and De 2001). Ports are engines of growth and development for the economies they serve. They are thus economic drivers of the entire economies (Monteiro 2007). Ports form a vital link in the overall trading chain and consequently, their level of performance and efficiency determines to a large extent a nations international competitiveness (Tongzon and Ganesalingam 1994). While the financial performance of the ports is improving marginally in value terms, problems of productivity and efficiency affect their operations. At the outset, a port must be distinguished from a harbour. Most ports have poor harbours, and many harbours receive too few ships. Harbour is a physical concept, a safe shelter for ships to moor; port is an economic concept, a centre of land-sea exchange which requires good access to a hinterland even more than a sealinked foreland. The hinterland of a port should be well-developed because the industries, refineries and other productive centres located here are important for export potential. Moreover, since these productive (business) centres also demand imports, this landward access is critical for the survival and sustenance of a port.

Historical Background and Ports of India The maritime sector of the country encompasses, inter alia, ports (major and non-major), shipping (overseas and coastal), inland water transport and navigational aids, besides trained manpower engaged in the operations of the maritime sector, on board and ashore (GoI 2004). The importance of maritime infrastructure in facilitating international trade is well recognised.1 Maritime transportation has been the lifeblood of world trade since time immemorial (Bose 2001). It influences the pace, structure and pattern of development. India is strategically located on the most famous and important east-west trade route of the world. Historically, it has been a famous route for all rulers who came to rule the east. Throughout the ancient and medieval periods, the ports and harbours of India played a crucial role in the expansion of commerce, trade and culture. From the earliest time to the end of the Moghul period, spices, pepper, oils, silk, ivory, precious stones and other luxuries of life went from the ports of India to Alexandria, Rome and other cities of the west Asia and Europe (GoI 1982; Sen 1993). The seaports of India on their part have played a historical role in the development of maritime trade and economy in India. Even today India occupies an important place in the maritime world. There can be no second thought that ports have played an important role in the economic development of India and its vast hinterland. Ports and harbours are an important infrastructural resource for the countrys trade (GoI 2007). The story of rise and fall of Indian ports starts with the advent of industrialisation under the British rule. The growth, modernization and capacity enhancement of Indian ports kept pace with the growth of foreign trade. These, in turn, depended upon the development taking place on account of industrialisation of the country and its vast economic hinterland. At the time of independence there were five ports and as the years rolled by, more ports were opened up in the country to cater to the increasing volume of trade, resulting from extensive progress in industrialisation and planning of the economy on an organised basis since 1951. India has an extensive coastline of 7,517 Kms, spread on the western and eastern shelves of the mainland and also along the islands. Its coast is spread along nine states and four union territories. The nine coastal states of India, namely, Gujarat, Maharashtra, Goa, Karnataka, Kerala (west coast) and Tamil Nadu, Andhra Pradesh, Orissa, West Bengal (east coast) have in all 13 major ports, 200 minor and intermediate ports (often referred to as non-major ports), and a 2.6 million sq km of Exclusive Economic Zone (EEZ).2 The major ports of India are six each on the west coast, namely, Kandla, Mumbai, Jawaharlal Nehru Port ((JNPT) near Mumbai), Mormugao, New Mangalore and Cochin, and on the east coast Tuticorin, Chennai, Visakhapatnam, Paradip, Kolkata, Haldia (though Haldia is a satellite port of Kolkata)3 and Ennore. The Ennore Port Limited (EPL) is a newly constructed port, and is the first corporate major port registered under the Companies Act, 1956. It was commissioned in the year 2001.

Institutional and Organizational Set-up of Ports The entries relating to the development of maritime ports are in the Seventh Schedule of the Constitution and therefore come under the purview of both the centre and the state governments. The 12 major ports of India are placed in the union list of the Constitution and are such statutory bodies (trusts) administered by the Ministry of Shipping under the provisions of the Major Port Trusts Act, 1963 and Indian Ports Act, 1908. The Indian Ports Act (1908) mainly describes the regulatory powers of the port authority. It lays down rules regarding safety of shipping and conservation of ports for the entire port sector and regulates matters pertaining to administration of port duties, pilotage and other charges. Hence, the Act extends automatically to all ports and parts of navigable rivers and channels leading to the ports irrespective of category (i e, major and minor). The Major Port Trusts Act (1963) enables the port to conduct its regulatory as well as commercial functions. It lays down the institutional framework for the major ports in India. Accordingly each major port is governed by a board of trustees appointed by the government from time to time as laid down by the Act. Normally, the term of the board of trustees lasts for three years. The nominated members of the trusts are replaced by new members as and when vacancy arises. The Major Port Trusts Act is restricted to the port proper of the major ports. The non-major ports (minor ports) are placed in the concurrent list of the Constitution and therefore fall within the jurisdiction of the respective state governments and are governed by the Indian Ports Act 1908. The working conditions of port labour are governed by the Dock Workers (Regulation and Employment) Act 1948, which stipulates the terms and conditions of port labour and employment, service rules standards and other welfare issues in the interest of port and dockworkers. The Act is highly protective of workers rights and offers them complete job security. Under this legislation, many ports have set up their respective Dock Labour Boards (DLB) which supply labour to the stevedoring companies and also to the port authorities. The regulatory framework of the ports in India also includes laws like Merchant Shipping Act 1958 and environmental regulations (Environment Protection Act 1986). The latter is administered by the Ministry of Environment and Forests. It earmarks and declares the coastal regulation zones (CRZs) of the country. Under the Act, port projects whether old or new, also attract provisions of other environment-related laws like Wildlife Protection Act 1972, Water (Prevention and Control of Pollution) Act 1974, Forest Conservation Act 1988 and Air (Prevention and Control of Pollution) Act 1981. All these acts are most essential for the smooth functioning of the port sector in India. Further these acts are amended4 from time to time by the Parliament, to fit and incorporate new rules and regulations brought in due to globalisation, privatisation and competition in the economy. Besides, there are also other acts such as: the Inland Vessels Act 1917, the Coasting Vessels Act 1838, the Inland Waterways Authority of India Act 1985, etc. These are also applicable to the ports and maritime transport as a whole at various points of time and they have to be adhered to, so that the ports function as a single unit armed with full powers of an organisation.The remaining ports (non-major, minor, intermediate and private) are under the administrative control of the respective maritime state governments. A few maritime states such as Maharashtra, Gujarat and Tamil Nadu have set up State Maritime Boards for the smooth functioning and management of minor ports in their states. Many other maritime states have not yet set up these boards, but management and control of their minor ports rests under their ports and fisheries departments. The administration of minor ports differs from state to state. For all practical purposes the supervision, control and direction of these minor ports comes from their respective state governments.

Problems Faced by Ports The ports of India are currently facing several problems which have affected their operations and hence the sustainability of some of the terminals in the competitive and globalised environment. Some of the major problems are briefly discussed here:Low Productivity and Efficiency: The ports of India are reeling with inefficiency that has adversely affected their enhanced profitability. This is due to under or over-utilisation of capacities. Excess staffing and labour-intensive methods of handling cargo, outdated cargo handling tools and equipments, etc, is also a major hurdle for their growth. Lack of Connectivity: A busy port needs good all-time connectivity to the hinterland more than the foreland. A network of multi-modal connections to the port is a necessary condition for its success. Transport bottlenecks have led to congestion in Indian ports and in turn increased the waiting and turnaround time of the ships at the ports. For instance, Mumbai is a congested port due to the reasons cited above.Draft Problems: Adequate draft is essential for the smooth operational efficiency of ports as well as of the vessels. A well required draft is important today to attract business and big liners of the world. Hence, the role of Dredging Corporation of India in providing a good draft to the ships is essential.

These problems hinder the provision of services to the agents, stakeholders, shipping companies, traders, demanders of port services and the country as a whole. Development of ports after independence was taken up in a planned manner. Mechanization and modernization of cargo-handling facilities at ports have been a thrust area in recent years, with emphasis on development of dedicated infrastructure. Deepening of ports to receive larger vessels has been another priority area.

Non-Major Ports

List of Non-Major ports of Gujarat, Maharashtra and Andhra PradeshGujaratMaharashtraAndhra Pradesh

1 Mandvi2 Navlakhi3 Bedi4 Sikka5 Jafarabad6 Okha7 Porbandar8 Veraval9 Bhavnagar10 Bharuch11 Magdalla12 Koteshwar13 Mundra(i) GAPL Mundra(ii)Old (Mundra)14 Jakhau15 Jodia16 Salaya17 Pindhara18 Beyt19 Rupen20 Mangrol21 Kotda22 Madhwad23 Navabandar24 Rajpara25 GPPL(Pipavav)26 Mahuva27 Talaja28 Ghogha29 Khambhat30 Dahej31 Bhagwa32 Onjal33 Vansi-Borsi34 Billimora35 Valsad36 Umarsadi37 Kolak38 Maroli39 Umergaon40 Mul-dwarka1 Dahanu2 Tarapur3 Nawapur4 Satpati5 Kellwa-Mahim6 Arnala7 Datiware8 Uttan9 Bassein10 Bhiwandi11 Manori12 Kalyan13 Thane14 Versova15 Bandra16 Trombay17 Ulwa-Belapur18 Panvel20 More21 Mandwa22 Karanja23 Thal24 Rewas24 Alibag25 Dharamtar26 Revdanda27 Borli/Mandla28 Nandgaon29 Murud-Janjira30 Rajpuri31 Mandad32 Kumbharu33 Shriwardhan34 Bankot35 Kelshi36 Harnai37 Dabhol38 Palshet39 Borya40 Jaigad41 Tiwri-Varoda42 Purnagad43 Jaitapur44 Vijaydurg45 Deogad46 Achara47 Malvan48 Niwti49 Vengurla50 Redi51 Kiranpani52 Ratnagiri53 Dighi1 Bhavanapadu2 Calingapatnam3 Bheemunipatnam4 Kakinada(i)Anchorage (Kakinada)(ii)Deep Water5 Narsapur6 Machilipatnam7 Vadarevu8 Nizampatnam9 Krishnapatnam10 Gangavaram11 Mutyalammapalem12 Ravva

The growing importance of non-major portsThe effective cargo handling at the non-major ports has helped in alleviating the congestion at major ports. Four maritime States, viz, Gujarat, Maharashtra, Goa & Andhra Pradesh together accounted for 96% of total cargo traffic handled by the non-major ports in 2008-09. And out of these four non-major ports we are focusing on the three states viz Gujarat, Andhra Pradesh & Maharashtra as these three states have largest number of non-major ports. And these three states are handling greater volume of cargos as compared with the other non-major ports. The collected data reveals the western state of Gujarat, accounted for 72.8 percent of the traffic handled by non-major ports, followed by Andhra Pradesh, at 16.2 percent; and Maharashtra, at 5.6 percent as per 2014. Cumulatively, these three states represented about 95 percent of total volumes routed via non-major cargo hubs during April to September 2014.Hinterland Connectivity: As indicated earlier Ports in India need to improve efficiency in turnaround times and equipment productivity to match global standards. Poor efficiency is also caused by slow evacuation of cargo from ports or slow turnaround of ships. While port capacity is being enhanced, appropriate improvement in road and rail connectivity will be needed. If that does not happen there will be a negative impact on the private investment which is targeted at 73.7 percent of the total investment during the XI Plan. In this area better coordination between road, rail and port authorities is badly needed. Dedicated Freight Corridor is also going to help. The recommendations of the Committee of Secretaries constituted to address hinterland connectivity include construction of a four-lane road as well as double railway line connectivity for each major port, consideration of projects less than minimum prescribed IRR on case to case basis, and consideration of budgetary assistance and also the assistance under VGF scheme for such projects. The Committee further recommended that 10 road projects of value Rs 2036 crore and 8 rail projects of value Rs 2014 crore, which had already been sanctioned, should be completed in a time-bound manner. Proximity of the port to the city and the enormous growth of the urban center, population and city traffic, gradually resulted in rising congestion in the connections of the port with the hinterland by rail and road. Since crude and POL are the main commodities handled in the port, the main mode of hinterland transport is pipeline. A network of sub marine pipelines is used to transfer oil and petroleum products to two oil refineries in the area. For the other cargoes road transport is the main transport mode in spite of the congestion. The relative minor role of the railways in cargo transport results in the lack of railway capacity and the heavy burden of the sub-urban passengers rail traffic.An improvement could be the planned development of a dedicated rail freight corridor (like Wadala Kurla). Consultant recommends to have an additional three dedicated lines constructed. Similarly plans exist to improve the road transport system. Consultant stresses the urgency of the hinterland connections and warns that any substantial delay in the implementation in road implementation projects would have an adverse impact on road traffic and result in major congestion in particular considering new port projects recommended.

Gujarat StateIt has an area of 75,686 sq mi (196,030 km2) with a coastline of 1,600 km. Most of the coast line lies on the Kathiawar peninsula. It has a population in excess of 60 million. The state is bordered by Rajasthan to the north, Maharashtra to the south, Madhya Pradesh to the east and the Arabian Sea as well as the Pakistani province of Sindh on the west. Its capital is Gandhinagar, while its largest city is Ahmedabad. Gujarat's maritime sector is considered to be the most proactive and well developed sectors of India.It is endowed with 1215 km length of coastline which constitutes about one-sixth of the total Indian coastline. Out of 41 ports located along its coastline, 40 are non-major ports while one port, viz. Kandla is a major port. Presently, 20 non-major ports in the state are handling cargo. The overall growth in port cargo traffic in case of Gujarat was 5.9% during 2008-09 compared to 2% for overall cargo growth for India.Objectives of Integrated Port Policy: To increase Gujarats share in the export and import sectors in national and international trade and commerce in pursuance of the policy of liberalization and globalizations To reduce the burden on existing major ports on the western coast of India To provide port facilities to promote export oriented and port based industries which are estimated to contribute 50% of the total industrial investment in Gujarat To take full advantage of the strategic location of Gujarat coast by-(a) Encouraging shipbuilding, ship repairing ad related manufacturing activities and;(b) Providing facilities for coastal shipping and ferrying passengers between Saurashtra and South Gujarat and other destinations To meet Gujarats potential power requirements by-(a) Establishment barge mounted power plants and;(b) Providing exclusive port facilities for importing different kinds of power fuel To attract private investment for the development of minor ports BOOT framework has been envisaged to provide-(a) Timelines of infrastructure creation(b) Efficiency of operation and operational autonomy to the private sector(c) Synchronization with hinterland development(d) Governments role to be maintained only in appropriate areas, and;(e) Government financial liabilities to be kept to a minimum

Maharashtra StatePolicy Initiatives for Port Development Development on BOOST basis. Developers selection on MOU basis or by tender if many investors interested Concession period of 50 years Concessional Whargage Government land on lease, if available, at market valuation. Equity participation by Government/MMB up to a maximum of 11% Road linkage to nearest State Highway to be part funded by the State and rail connectivity by Developer Freedom to fix tariffPolicy Guidelines for Captive Terminals Land and site for jetty will be leased out for a period of 30 years Development on Build, Operate & transfer (BOT) basis No berthing dues from vessels calling at captive jetty Whargage charges as per the prescribed rates notified by the State Government At the end of 30 years, the jetty, superstructure & facilities on jetty will revert back to MMB

Andhra Pradesh

Most operational SEZs: Andhra Pradesh has 38 operational special economic zones (SEZs), higher than any other state in the country. It also has the highest number of IT/ITeS-related SEZs in India. The hi-tech city in Hyderabad is the largest IT facility in India.

Largest ITIR in development: Indias first Information Technology Investment Region (ITIR) will be developed in Andhra Pradesh over an area of 202 sq km. ITIR is likely to attract investments of around US$ 40.4 billion.

Revenues of US$ 10 billion from IT sector Revenue from the IT sector crossed the US$ 10 billion mark over 2012-13.

Worlds largest single deposits of barytes Andhra Pradesh has the largest single deposits of barytes in the world. It has around 70 million tonnes of baryte reserves, accounting for 94 per cent of total baryte reserves in India.

Largest producer and exporter of bulk drugs Andhra Pradesh ranks first in the manufacturing of bulk drugs in India and accounts for around one-third of the national production of bulk drugs.

One of the largest mineral storehouses Andhra Pradesh is the largest producer of barytes and limestone in India. It also has the largest reserves of granites (estimated at 2.4 billion cubic metres) and beach sand (241 million tonnes) in the country.

Largest producer of spices, fruits, eggs The state is the largest producer of spices, fruits and crops, including citrus, papaya, oil palm and tomato, in India. It also ranks first in the production of eggs and third in milk production in the country.

SWOT Analysis

Strengths

Strategic location Hinterland Land availability Ability to handle multiple types of cargo Cost effectiveWeaknesses

Lack of mechanization Restrictions arising from limited draft Sub-optimal utilization of space around the port Shortage of skilled staff Lack of infrastructure to attract containers Customer services IT connectivity Constraints in night navigation Storage area management Lack of uniformity in operational efficiencies Procedural delays. Financial Shortage

Opportunities

New cargo like ro-ro and LNG Revenue potential Sustainability of revenues Resources allocated Growth potential.

Threats

Increasing competition from GMB ports The presence of international players in GMB ports More upcoming private ports.

Market Size

The Indian ports sector received FDI worth US$ 1,637.30 million in the period April 2000November 2014, as per the Department of Industrial Policy and Promotion (DIPP). The ports sector was also awarded 30 projects in FY14, investing over Rs 20,000 crore (US$ 3.24 billion) which is a threefold increase over the preceding year.In FY14, coal cargo traffic grew by 20.6 per cent to 104.5 million tonnes (MT) from 86.7 MT in FY13. With regard to commodities, there was a rise of 25 per cent in handling of fertilizers in April 2014 as against April 2013. Iron ore handling also grew by 16.8 per cent during that period.

Investments

A massive investment into Indias ports and its road sector has been announced by Indian Minister for Shipping, Road Transport and Highways, Mr Nitin Gadkari, which is expected to help boost the countrys economy. According to the Economic Times, the Kolkata Port Trust along with the Indian government is to construct a port in the Sagar Islands at a cost of more than US$ 1.8 billion. Gadkari has also announced additional investments of more than US$ 520 million in the port sector for floating storages and a dry bulk cargo handling terminal. Reliance Industries has signed shipping agreements with one of the worlds largest shipping companies, Mitsui OSK Lines Ltd (MOL), for transporting liquefied ethane from North America to India. MOL will supervise the construction of six Very Large Ethane Carriers (VLECs), ordered by Reliance. MOL will also operate and manage the vessels after these are built and delivered. Jawaharlal Nehru Port Trust would take 60 per cent equity in the Indian company to be formed for developing the Chabahar port in southeastern Iran. Kandla Port Trust (KPT) would hold the remaining equity. The Special Purpose Vehicle (SPV) is likely to be named Indian Ports Global SKIL Ports and Logistics is planning to invest Rs 1,000 crore (US$ 162.17 million) to build a multipurpose terminal at Karanja near here over the next two years. The proposed terminal would be developed on a 200 acre land parcel at Karanja, off the financial capital's eastern coast, and would have a sea frontage of 1,000 metres. Sajjan Jindal, the owner of diversified JSW Group with interests in steel, cement and power, has bought a 10 per cent stake owned by global hedge fund Eton Park Capital in his privately-owned ports company JSW Infrastructure for roughly Rs 600 crore (US$ 97.3 million). The stake sale signals the bright prospect of the Indian ports sector as cargo traffic rises with increase in demand for steel, coal and petroleum products. Hyderabad-based infra player IL&FS Engineering Services has announced that it has secured a port project worth Rs 179.84 crore (US$ 29.18 million) in Maharashtra. "The company has received a letter of award (LOA) from IL&FS Maritime Infrastructure Company Limited (IMICL) on behalf of Dighi Port Limited for engineering, procurement, and construction (EPC) contract for the evelopment of multipurpose berth, backup yard development and utilities of multipurpose terminal berth 5 on the north of Dighi Port, Agardanda in Maharashtra," the company said. According to the company, the project completion period is 545 days from the date of notice to proceed (NTP) and the scope of work includes design and construction of multipurpose berth, reclamation of 50 acres of backup area, among others.

Government Initiatives

The Indian government will develop 10 coastal economic regions as part of plans to revive the countrys Sagarmala (string of ports) project, according to the Daily Shipping Times. The zones will be manufacturing hubs supported by port modernization projects and could cover 300-500km of coastline. The government is also looking to develop the inland waterway sector as an alternative to road and rail transport for getting goods to the nations ports and is hoping to attract private investment into the sector.The Minister of State for Shipping, Mr Pon. Radhakrishnan has informed that following steps have been taken by the Government for capacity expansion of ports: Upto 100 per cent FDI under the automatic route is allowed for port development projects. Income tax incentives are allowed as per Income Tax Act, 1961. Bidding documents like RFQ, RFP and Concession Agreement have been standardized Enhanced delegation of financial powers to Shipping Ministry to accord investment approval for PPP projects. Streamlining of security clearance procedures. Close monitoring of developmental projects in the Major Ports.The Ministry of Shipping has formulated a Perspective Plan for development of the Maritime Sector, namely, The Maritime Agenda (2010-2020). This Plan has estimated the traffic projections and capacity additions at the ports upto the year 2020. Based on the estimated growth, it has projected capacity of 3130 million tonnes by 2019-20.In the Union Budget 201314, the government allocated Rs 11,635 crore (US$ 1.88 billion) for the expansion of the VO Chidambaranar (VOC) Port in Tuticorin. Industry representatives, especially exporters, feel that the enhancement of berthing facilities there will increase exports and result in big savings in freight for manufacturers who have to send their products bound for the west through Colombo in Sri Lanka.The Ministry of Shipping has finalised guidelines which allows Indian companies to register their ships under foreign flags. This follows the governments decision to create a new category of fleet called 1 Indian controlled tonnage. The guidelines will be announced shortly, as per an official.The National Maritime Agenda 20102020 is an initiative of the Ministry of Shipping to outline the framework for the development of the port sector. The agenda also suggests policy-related initiatives to better the operating efficiency and competitiveness of ports in the country.The Minister for Road Transport, Highways and Shipping Mr Nitin Gadkari said that his ministry will coordinate with other ministries of Environment & Forests, Tourism, Power and Water Resources, River Development and Ganga Rejuvenation for developing transport and tourism along the river Ganga.

Road Ahead

Increasing investments and cargo traffic point to a healthy outlook for Indias ports sector. Services benefiting from these investments include operation and maintenance (O&M), pilotage, and harbouring and provision of marine assets like barges and dredgers.The Planning Commission of India in its 12th Five Year Plan projects a total investment of Rs 180,626 crore (US$ 29.31 billion) for this industry. Also, through its Maritime Agenda 20102020, the Ministry of Shipping has set a target capacity of over 3,130 MT by 2020, driven by private sector participation. Over 50 per cent of this capacity is anticipated to be generated at non-major ports.

-----References:Indian Ports Association, Ministry of Shipping, Media Reports, Press Releases.