AP has highest share of port projects in PPP model: ASSOCHAM

Hyderabad, May 24 : The state of Andhra Pradesh (AP) commands lion’s share of over 46 per cent with three projects worth over Rs 20,000 crore under construction in the ports sector under the public-private partnership (PPP) model as of April 30, 2013, according to a just concluded study by apex industry body ASSOCHAM.

“With three projects worth over Rs 1,425 crore, AP has a share of about six per cent in the PPP port projects under operation and the state has no projects in the ports sector that are under bidding,” according to a just concluded study titled ‘Port Developments in India’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“While, Gujarat accounts for maximum share of over 50 per cent in the total number of completed projects in the ports sector that have been put to service delivery under the PPP model as of April 30, 2013, Kerala has the highest share of about 40 per cent in the PPP ports projects under bidding,” highlighted the ASSOCHAM study that was jointly released by Ravindra Sannareddy, chairman of the ASSOCHAM Southern Region Council and D S Rawat, national secretary general at a press conference held here in Hyderabad today.

“Out of the total 881 PPP projects worth over Rs 5.4 lakh crore taken up under the PPP model across India, 62 projects in the port sector worth over Rs 82,000 crore are in the different stages of implementation,” said Sannareddy.

“While 21 PPP projects in the port sector with a share of over 52 per cent worth over Rs 43,000 crore are under construction, eight projects worth about Rs 14,000 crore with a share of about 17 per cent are under bidding,” said Rawat. “Of the remaining, one project is in the expression of interest stage (EOI) and one has been cancelled.”

Of the total, 31 PPP port projects worth over Rs 24,700 crore are under operation in India as of April 30, 2013, Gujarat accounts for over 50 per cent share with 12 completed PPP projects worth over Rs 12,400 crore, according to the ASSOCHAM study.

With two port projects worth over Rs 4,100 crore completed and put to operation in the PPP mode, Odisha ranks second with a share of about 17 per cent followed by Maharashtra where five projects worth over Rs 3,700 crore are under operation.

Andhra Pradesh and Tamil Nadu each with three projects under operation have garnered a share between 5-6 per cent followed by Kerala (2.8 per cent).

Apart from Andhra Pradesh, the states of Maharashtra, Kerala, Odisha and the Union Territory of Pondicherry are other regions with maximum share ranging between 7-16 per cent in the PPP projects worth over Rs 2,900-Rs 6,700 under construction.

With two projects worth over Rs 5,500 crore, Kerala has the maximum share of about 40 per cent in the PPP ports projects under bidding. Maharashtra and Karnataka are other states with a share of over 37 per cent and 23 per cent in this category.

Besides, with a share of over 53 per cent, Gujarat also tops the list amid nine maritime states as it could create almost double the capacity at the minor ports than was envisaged in the 11th plan.

“Minor ports in Gujarat had a capacity of 182 million tonnes as on March 31, 2007 and the state was expected to add about 56 million tonnes capacity during the XI plan (2007-12), while the state had realised capacity addition to about 283.6 million tonnes up to March 31, 2011 i.e. actual capacity addition of 101.6 million tonnes during the first four years of XI plan,” according to the ASSOCHAM study.

The total capacity of India’s nine maritime states namely – Andhra Pradesh, Goa, Gujarat, Karnataka, Kerala, Maharashtra, Odisha, Pondicherry and Tamil Nadu as on March 31, 2007 was about 228.3 million tonnes which was expected to add about 337.4 million tonnes during 2007-12 and the total capacity realized as on March 31, 2011 was 418.3 million tonnes thereby adding about 190 million tonnes during the first four years of the XI plan.

Odisha is the only the second state after Gujarat which realized actual capacity addition of about 23 million tonnes from zero capacity during the first four years of XI plan thereby by exceeding the expected capacity addition between 2007-12 which was about 13.2 million tonnes.

The ports sector needs policy attention as there not only exist severe capacity constraints and operational inefficiencies, but also certain models on how to address these issues.

Considering that India’s port infrastructure is not at par with the global standards, the inefficient port services pose severe challenges to India’s trade as the inefficiency and non-competitiveness of India’s ports results in higher costs apart from the turnaround time at ports.

“There is an urgent need to modernize India’s ports as the existing ports are plagued with a plethora of problems like congestion, poor connectivity, accessibility and lack of adequate facilities,” highlighted the ASSOCHAM study. “There is a huge scope for investments in development of port infrastructure which needs to develop fast and the capacity utilization must also be improved.”

The XII Plan objective of attracting more than one lakh crore private investments for developing non-major ports turns out to be an ambitious target unless and otherwise their XI Plan performances are evaluated in proper spirit. The concerned states must seriously consider incorporating the success strategies of others for better fulfillment of the plan objectives, suggested the apex chamber.

India’s merchandise trade has increasingly been affected by its deficient port infrastructure, ASSOCHAM has thus suggested the government to quickly revamp its ports development strategy to attract maximum private resources into the country.

According to the ASSOCHAM study, there is a need to expand the existing framework to attract private sector participation for development of infrastructure facilities and other related activities.

Private investment can be a huge bonus in areas like road infrastructure, coastal shipping and inland waterways with port connectivity apart from ship-repairs and ship-building. INN