National Maritime Development Programme

Ravi B. Budhiraja
Chairman Indian Ports Association And Jawaharlal Nehru Port Navi Mumbai, India

AIAI Seminar, Mumbai - April 18, 2006

Sections
Indian Economy Indian Port Sector

Need for Development Plan

Guidelines for Privatization Maritime Policy Focus Areas Recent Privatization Initiatives NMDP (National Maritime Development
Programme)

NMDP for Mumbais Ports

Sum up

Indian Economy:
An overview

Potential : India

7th largest country in the world and 2nd largest in Asia Worlds 4th largest economy in terms of Purchasing Power Parity (PPP) next only to United States, Japan and China GDP growth 7.6%* during financial year 2005-06 GDP-composition by sector: Agriculture-21%, Industry28%, Services-51% Foreign Direct Investment (FDI) 2005-06: US$ 8 billion*. FDI shows 42.86% rise during 2005-06 compared to last year (2004-05 : US$ 5.6 billion) Reserves of foreign exchange & gold 2005-06 : US$ 145 billion*
* Provisional

Increasing Trade Volumes

Trade in Billion US $
200 180 160 140 120 100 80 60 40 20 0
Import Export Total 80-81 16 8 24 89-90 21 17 38 93-94 23 22 45 99-00 50 37 87 '00-01 51 44 95 '01-02 51 44 95 '02-03 61 53 114 '03-04 78 64 142 '04-05 106 80 186 '05-06* 113.1 76.23 189.33

Import

Export

Total

* Provisional

Foreign Direct Investment

Foreign Direct Investment (FDI) in India has grown 34 fold
10 9 8 7

8*

US $ billion

6 5 4 3 2 1 0

5.6

3.4

0.234

0.26

91

98

02

05 04 20 20

90 -

97 -

01 -

19

19

Source : RBI Report 2004-05

20

* Estimated : The Economic Times, April5, 2006

05 -

06

Indian Port Sector

Overview

TOTAL COASTAL LENGTH- 7,517 kms MAJOR PORTS 12

NON MAJOR PORTS - 187

TRAFFIC AT INDIAN PORTS

In Million Tonnes
600
MAJOR PORTS NON-MAJOR PORTS

576
522 458 419 369
88
153

500

384
105 96

138 113 384 345

400 300

281 200 100 19 0 50-51 60-61 70-71 80-81 90-91 00-01 56 80 152

288

314 423

33

01-02 02-03 03-04 '04-05 '05-06

1950-51 and 1980-81 1980-81 and 1990-91 1990-91 and 2000-2001

(30 Years) (10 Years) (10 Years )

+ 61 Million Tonnes + 72 Million Tonnes + 217 Million Tonnes

2000-01 and 2005-06 (6 Years)

+ 207 Million Tonnes

SHARE OF COMMODITIES
- Major Ports : 2005-06
Source : IPA Report * Figures in brackets indicate Traffic in Million Tonnes

Containers (61.83) 15%

Other Cargo (68.98) 16%

POL (142.17) 33%

Coal (59.25) 14%

Fr/FRW (12.20) 3%

Iron Ore (78.99) 19%

TRAFFIC vis--vis CAPACITY at MAJOR PORTS

Traffic 450 400
362.75 389.5 343.95 291.45 271.92 281.11 258.05 287.59 313.55 344.8 397.5 383.75

Capacity

350 300 250 200 150 1999-00 2000-01

2001-02

2002-03

2003-04

2004-05

Traffic Projections : Indian Ports

Major Ports Non Major Ports
Overall CAGR : 7.70% Major Ports : 6.99% Non Major Ports : 9.55% (2004-05 onwards)

In Million Tonnes

877

900 800 700 600

261

522
138

616
153

500 400

616 300 200 100 0 04-05 05-06 11-12 384 423

(#) CAGR = Compound Annual Growth Rate between 2000-01 and 2004-05 8.08 % for Major Ports, 10.59 % for Non-Major Ports and Overall 8.69%

Capacity Requirement (Major & Non Major Ports)In Million Tonnes

Commodity
Projected Traffic All Ports 2011-12 Capacity Required All Ports 2011-12
(30%Surplus)

Projected Capacity Additional Traffic Required Capacity to be Major Major Ports created by Ports 2011-12 Major 2011-12 (30% Surplus) Ports 2011-12 (4) 183.5 ( 5 )=(4)x1.3 238.55 (6) 81.2

Capacity Required for Non Major Ports 2011-12 ( 7 ) = 3-5 138.45

(1)

(2) 290.00

( 3 )=(2)x1.3 377

POL Container: Tonnage

(TEUs In Million)

150.40 (12.50)
121.50 148.00 166.80

195.52 (16.25)
157.95 192.40 216.84

140.40 (11.7)
87.50 103.50 100.80

182.52 (15.21)
113.75 134.55 131.04

134.22 (11.08)
62.75 90.35 38.49

13.00 (1.04)
44.20 57.85 85.80

Iron Ore Coal Other Cargo

Total

876.70

1,139.71

615.70

800.41

402.91

339.30

Source : NMDP Report March 2006

Need For Development Plan

National Maritime Policy

For the first time, a comprehensive Policy for the Maritime

Sector is being formulated :

Policy on Ports Sector Public Private Partnership (PPP) Policy on Shipping Sector Including Cruise Shipping, Coastal Shipping and Shipbuilding Policy on Inland Waterways

Policy Vision
Modernizing the existing Ports and upgrading their facilities in
order to bring them on par with leading ports of the world.

Developing New Ports in order to fully utilize the vast coastline of the
country and the available draft for deriving maximum economic advantage.

Promoting Hinterland Connectivity to ensure least distance access

of the countrys cargo to the ports and also offer choice of ports in the region and terminals inside the ports.

Fostering Port Specialization and Inter-Port Complementarities

for overall optimization of port facilities and efficiency at the ports.

Policy Objectives
To ensure Competition and enhance Productivity
Second Terminal facilities in the same Port will not be handed over to

first Terminal Operator. However if there are two Terminal Operators both
can bid for Third Terminal
Quay length of 1000 metres in a straight line will be considered wherever

possible.
The functioning of TAMP would be

strengthened so that uniform and

transparent norms prevail in matters of tariff fixation

To ensure transparency
Generally Port Project will be awarded through tender route. However,

captive facilities can be given on nomination basis

Policy Objectives

Contd

To augment capacity

Captive facilities for Break Bulk, Dry Bulk and Common User Terminal will be encouraged Setting up of Container Freight Stations in identified areas will be encouraged Possibility of extending financial support for the development of minor ports

To enhance connectivity

To augment evacuation and handling of cargo, Port Authority will be encouraged to participate in equity of SPVs/Joint Ventures formed to provide hinterland connectivity Port Infrastructure Upgradation Fund to leverage port investment including viability gap funding

Policy Objectives

Contd

Participation in Risk Sharing

Revenue sharing will be preferred over royalty payment The concerned port may decide whether Minimum Guaranteed

Throughput (MGT) will be a pre-requisite

To Ensure Welfare

Strengthening of independent Traffic Regulator In case of lease of existing facilities, it will be obligatory for lessee that surplus workers are taken over by successful bidder

Guidelines

for Privatization

PRIVATE SECTOR PARTICIPATION

- Guidelines

Guidelines formulated for Private Sector Participation, Joint Venture and Foreign Collaboration in the Major Ports which

broadly include :

Two Stage Bidding Process

Request Request

for Qualification (RFQ) and for Participation (RFP)

Automatic Approval up to 100% for FDI

Period of lease / BOT licence up to 30 years

Bidders to indicate percentage of revenue to be shared Minimum Guaranteed Throughput not required.

 Maritime Policy : Focus Areas

Port Sector
Boost to Private Sector Participation Private Sector investment leading to efficiency, competition and cost reduction to users Coastal Shipping to increase from 7% to 15% by 2025 Inland Water Traffic to increase from 0.15% to 2% by 2025 Promoting Cruise Shipping Private Sector Participation in areas like construction of Breakwater, operation of Berths / Terminals Identifying Projects for Development of Ports with 8 years time horizon

Ship Building

Two Public Sector Shipyards

Capacity limited
Augmentation of existing shipyards underway Two international size shipyards planned Likely investment of Rs. 7,195 Crores FDI preferred PPP second option

Inland Water Transport

14,500 kms navigable waterways Only 18 Million Tonnes being carried Three National Waterways Proposal to develop three new National Waterways NMDP envisages investment of Rs. 10,500 Crores

Recent Initiatives

Private Sector Participation

- Success so far
17

Private or Captive Projects involving private investments 13 projects involving investments of about Rs. 2,596 Crores are operational 4 projects involving about Rs. 3,534 Crores are in different

worth Rs. 6,130 Crores have been approved.

phases of implementation.
Presence of renowned International Operators
P&O Ports (DP World) PSA Corporation Dubai Ports International Maersk A/S

Recent Initiatives
Includes..
Manpower rationalized gradually during last few years from 102,000 in 19992000 to 69,000 as on March 31, 2005 at Major Ports. Govt. has approved the proposal for award of contract for Development of International Container Transhipment Terminal at Cochin on BOT. The foundation stone was laid by Honble Prime Minister on Feb. 16, 2005 Govt. has approved Sethusamundram Ship Channel Project at an estimated cost of Rs. 2,427.40 Crores. This will result in saving of upto 424 nautical miles distance and time upto 30 hours

Third Container Terminal Gateway Terminals India Pvt. Ltd. (GTIPL) at JN Port has started operations on trail basis from March 14, 2006. GTIPL will be operational fully by August 2006. Process has also been initiated of developing Fourth Container Terminal at JN Port
First port based Special Economic Zone (SEZ) at Cochin given in principle approval through Ministry of Commerce. Feasibility study for a World class Container Terminal at Ennore Port has been completed . Further action in this regard is being taken by the port authorities. Ennore Port is also set to enter Chemical handling operation through private sector participation A project on Deepening for Approach Channel upto 18.7 meters a Paradip Port has been approved

National Maritime Development Programme

(NMDP)

National Maritime Development Programme (NMDP)

NMDP Includes projects which are under implementation as on 1st April 2005 or are likely to start

till 31st March 2012. The Programme has further been

divided into two phases.

Phase-I : Comprises of projects

Plan works under implementation as on 1st April 2005 Plan work expected to be started from 1st April 2005 to 31st March 2007

Works which though likely to start after 31st March 2007, but are
expected to be completed by 31st March 2009

Phase-II : All other projects will be included in Phase-II

Port Sector - Focus Areas

Capacity
Draft Hinterland connectivity

Productivity
NMDP has agenda for each one

NMDP requires huge investment

- Ways to invite

Investment policy liberalized Private Participation welcomed Public Private Partnership (PPP) in key areas Selective Budgetary Support

Public Private Partnership (PPP)

Scheme of PPP

100% FDI permitted in Port development. Private investment in Infrastructure/ commercial activities like Berths, Terminals, Equipments, etc.

Public / Private investment in common user facilities like Dredging, Break-waters, Hinterland Connectivity, etc.

NATIONAL MARITIME DEVELOPMENT PROGRAMME -- Overview

Indian Major Ports : Proposed Investments Phase I & II
(Rs. In Crores)

Existing Capacity as on 31-03-2005

Project Head Deepening of channels/ berths etc. Construction/reconstru ction of berths/jetties etc. Equipments Rail and Road Connectivity Others No. of Projects 25 76

397.50
Budgetary Support 2,731.00 563.00

Proposed Capacity by 2011-12

Internal Support 3,340.00 3,867.33 Private Invest. 185.00 28,083.24 Others 48.00 50.00

800.41
Total 6,304.00 32,563.57

52 45 78

-90.00 225.00 3,609.00

1,427.87 2,232.24 2,904.10 13,771.54

1,075.00 -5,162.10 34,505.34

130.00 3,634.25 55.60 3,917.85

2,632.87 5,956.49 8,346.80 55,803.73

TOTAL

276

Portwise Status Of NMDP Projects

PHASE-I
Sr. No. 1 Name of the Port KOLKATA No. of Projects Estimated Cost (Rs. In Crores)

PHASE-II
No. of Projects Estimated Cost (Rs. In Crores) No. of Projects

TOTAL
Estimated Cost (Rs. In Crores)

447.00

20

4,855.20

25

5,302.20

2
3 4 5 6 7 8 9 10 11 12 13

HALDIA
PARADIP VIZAG ENNORE CHENNAI TUTICORIN COCHIN NEW MANGALORE MORMUGAO MUMBAI JNPT KANDLA

11
11 22 10

392.25
349.53 1,111.00 4,896.00

4
17 16 4

800.00
2,053.30 1,510.00 1,570.00

15
28 38 14

1,192.25
2,402.83 2,621.00 6,466.00

10
17 13 14 9

1,597.14
961.25 7,600.00 4,240.00 573.00

4
7 1 6 3

650.00
3,610.00 320.00 2,908.00 235.00

14
24 14 20 12

2,247.14
4,571.25 7,920.00 7,148.00 808.00

9
27 22

2,228.06
3,738.00 3,837.62

5
5 4

538.00
3,540.00 1,243.38

14
32 26

2,766.06
7,278.00 5,081.00

TOTAL

180

31,970.85

96

23,832.88

276

55,803.73

NMDP for Mumbais

Ports

NATIONAL MARITIME DEVELOPMENT PROGRAMME : MUMBAIs PORTS

Phase I Port Name Category No. of projects 1 2 8 11 5 27 Rupees in Cr. 800.00 1,353.00 290.00 1,159.00 136.00 3,738.00 Phase II No. of projects -1 -2 2 5 Rupees in Cr. -3,053.00 -422.00 65.00 3,540.00 Total No. of projects 1 3 8 13 7 32 Rupees in Cr. 800.00 4,406.00 290.00 1,581.00 201.00 7,278.00

Deepening Berths JNPT Equipment Connectivity Others TOTAL

Deepening Berths MbPT Equipment Connectivity Others TOTAL

-4 4 1 -9

-1,729.00 171.06 328.00 -2,228.06

2 3 ---5

188.00 350.00 ---538.00

2 7 4 1 -14

188.00 2,079.00 171.06 328.00 -2,766.06

Compounded Annual Rate Of Growth - Mumbais Ports

In million tonnes
Port Name Traffic 2005-06

Projected Traffic 2011-12

POL Iron Ore Coal Container
Tonnage TEUs 4.67 0.7 3.5 8.9 63.04 39.6

CARG*

Other Cargo

Total#

JNPT MbPT

37.75 44.19

3.5 22.3

---

---

56.04 8.4

9.78 1.7

Total Major Ports

423.41

183.5

87.5

103.5

140.4

11.7

100.8

615.7

6.99

*Compounded Annual Rate of Growth (CAGR) between 2004-05 and 2011-12 # Actual traffic handled during year 2005-06

Important Projects Under NMDP : Mumbais Ports

Sr. No.
1

Name of the Project Phase-I

Est. Cost (Rs. In Crores)

1,228.00

A) Mumbai Port
Construction of two Off-Shore Container Terminals Development of two Container Berths and related upgradation for handling vessels of 6,000 TEUs capacity

B) JN Port
1 2 Development of Bulk terminal into Container Terminal (GTIPL) Extension of Container quay line towards North by 330 Mtrs 900.00 453.00

3
4

Deepening & Widening of main harbour channel Phase-I

Improvement of road connectivity NH4B and SH54

800.00
357.00

Phase-II

A) Mumbai Port
1 Development of Oil berths and BPX, BPS Berths 350.00

B) JN Port
1 Development of 4th Container Terminal and Marine Chemical Terminal Phase I : Berths and Equipment facilities Alternative Road connecting to Port 3,053.00 350.00

To sum up
Port Capacities as well as supporting Infrastructure in and around Major Ports in India developing rapidly

with Private Investment and SPVs

We welcome investment in Port Sector Procedure for Private Sector Participation simplified Opportunities for investment in Port Sector are plenty

Indian Ports

are ready to take Challenges and

committed to provide seamless service with adequate Infrastructure in the years to come

Thank You