Container segment to drive growth at Indian Ports : CARE Ratings

NEW DELHI: Container segment is expected to fuel the next stage of growth at Indian ports. Major Ports in the Country are already ramping up container handling capacity despite sluggish global container and freight movement in the past two years.

A report by Care Ratings has pegged the cargo container handling of ports in the Country to reach 25 million TEUs (Twenty Tonne equivalent units) by 2020-21 from the current 13 million TEUs. Non-Major Ports are set to add higher capacities in this segment.

"We expect the same (global container movement) to recover globally over the next 2-3 years. We also expect a pick-up in containerisation of a wider variety of cargo in India, since handling and transportation becomes faster and easier," the report stated.

With the Sagarmala programme aiming to increase the depth of Major Ports so as to cut time on trans-shipping of goods, the ports would be able to handle new generation mega vessels over the next two to three years.

Presently, petroleum and its products account for 25-30 per cent of the import-export volume of the Country. The Government intends to double the petroleum refining capacity to meet the domestic demand and also augment exports. Current refining capacity stands at 230 million tonnes per annum (mtpa). The increased refining capacity is expected to cater to regional demand especially petroleum exports to Countries like Bhutan, Nepal, Myanmar, Bangladesh and Sri Lanka. Petroleum, oil and lubricant (POL) segment is poised to be the major growth segment for the overall growth of cargo capacity handled by ports.

Capacity utilization of six Major Ports on the Eastern Coast was 56.2 per cent in 2016-17, a slide of 3.4 per cent compared with FY17. Similarly, Major Ports on the Western Coast reported capacity utilisation of 65.9 per cent in last fiscal, a slump of 3.3 per cent.

"During 2016-17, Major Ports implemented 100 million tonnes of capacity addition. We expect the capacity utilization to remain stable during the current year. Fall in import of commodities like coal would be compensated by the increased export of iron ore, zinc and steel", the report noted.

During the past three year, technology improvements such as new container terminal projects at JNPT, Kamrajar Port in Tamil Nadu, new cargo terminals, improving rail connectivity and implementation of RFID (Radio Frequency Identification) system across ports has helped improve the efficiency and handling capacity.

Major Ports continued to witness growth in operating surplus backed by the steady increase in operating margins. The 12 Major Ports posted a combined net surplus of Rs 2820 crore in 2016-17 on income of Rs 11,894.5 crore from handling 647.6 million tonnes of cargo.

Source: Dailyshippingtimes.com