Cargo handled every year at Indian ports1 billion tonnes
Proportion of cargo administered at private ports50 percent
India’s need for port capacityJuly 28, 2015
The joint managing director of domestic shipping, logistics and port infrastructure holding company J.M. Baxi Group, Dhruv Kotak, addresses the successes and limitations of the privatisation of Indian ports and explains how further denationalisation can benefit the country’s hydrocarbons industry. J.M. Baxi Group provides transportation services for the local oil and gas industry.
Has the drive to privatise India’s port system been enough of a success?
The privatisation of the India’s port sector started in the late 1990s and has been a success. Out of the 1 billion tonnes of cargo handled every year at Indian ports, 50 percent is administered at private ports. Infrastructure has been improved, modernised and mechanised.
While successful, the privatisation of ports needs to be deepened and additional private facilities must be made available to key industries such as oil and gas. Models based on private facilities have been a success, such as the Kakinada port, where around half of the infrastructure is dedicated to servicing the oil and gas industry.
How can marine support bases at Indian ports be more effectively developed?
The national government needs to enact policies that encourage private players to build port infrastructure that includes a devoted space to service niche requirements such as marine support bases for upstream hydrocarbons.
Marine support bases for the oil and gas industry do not pollute and do not require deep draughts. Even older ports such as Mumbai could accommodate such facilities and provide customs bonding and free trade zones around them to foster development.
What changes are required to further revitalise and develop India’s port sector?
Older ports need to be dedicated to the oil and gas industry, coastal shipping or other niche businesses where a lesser draught is permissible. For other industries requiring bigger, deeper and faster productivity ports, new assets and facilities need to be built to support them.
There should be one policy to maximise the use of existing port infrastructure and a different one to build new infrastructure. Together, a new ecosystem for India’s ports can be nurtured.
What are the key port and marine requirements of India’s oil and gas industry?
The offshore oil and gas industry relies heavily on transportation such as moving modules to offshore platforms. Such activities require significant port capacity to store the modules on land before they are moved offshore.
India must develop a fleet of specialised vessels, such as ones China, Japan or South Korea have, to carry and move modules. India lacks the marine equipment to assist the supply chain in planning for oil and gas projects.
In terms of overall shipping patterns, India is a huge market for LPG ships, as domestic LPG production exceeds demand, leading India to rely on imports. More LNG carriers will also be needed as India moves to secure supply for gas-based industries such as power and fertilisers.
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