The experience of operating berths through PPPs at some of the major ports in India has been quite successful. It has, therefore, been decided to expand the programme and allocate new berths to be constructed through PPPs. A model concession agreement is being formulated for this purpose.

The Government has also decided to empower and enable the 12 major ports to attain world-class standards. To this end, each port is preparing a perspective plan for 20 years and an action plan for seven years. International experts have been engaged for assisting the Ports in this exercise, which is likely to be completed by November, 2006. Recognising that the shipping industry is moving towards large vessels, a plan for capital dredging of channels in major ports has also been formulated

A high level committee has finalised the plan for improving rail-road connectivity of major ports. The plan is to be implemented within a period of three years. Further, changes in customs procedures are being carried out with a view to reducing the dwell time and transaction costs. The government has also delegated powers to the respective Port Trusts for facilitating speedier decision-making and implementation. At the same time, several measures to simplify and streamline procedure related to security and customs are been initiated.

Indian ports handled cargo of 519 million tonnes in 2004-05, a 11.8% increase over 2003-04

70% of the traffic at major ports by volume is dry and liquid bulk, remaining 30% is general cargo, including containers
- Containerised cargo has grown at a rate of about 14% p.a. over the last 5 years

India has 12 major ports and 187 minor ports along 7,517 km long Indian coastline

- Cargo handled by Major Ports has increased by 9.5% p.a. over last 3 years

- Major ports handle nearly 75% of the total traffic

Of the 12 major ports, 11 are run by Port Trusts while the port at Ennore is a corporation under the Central Government. These ports handled 383.75 million tonnes of cargo in 2004-05

2 major Government projects underway:

- Project “Sethusamundram”: Dredging of the Palk Strait, in Southern India to facilitate maritime trade through it

- National Maritime Development Programme for modernisation and expansion of port capacities

Government of India dominated maritime activity in the past. Policy direction is now oriented to encouraging the private sector to take the lead in port development activities and operations

Many Major ports now operate largely as landlord ports - International port operators have been invited to submit competitive bid for BOT terminals on a revenue share basis

Significant investment on BOT basis by foreign players including Maersk (JNPT, Mumbai) and P & O Ports (JNPT, Mumbai and Chennai), Dubai Ports International (Cochin and Vishakhapatnam) and PSA Singapore (Tuticorin)

Minor ports are already being developed by domestic and international private investors: Pipavav Port by Maersk and Mundra Port by Adani Group (with a terminal operated by P & O)

100% FDI under the automatic route is permitted for port development projects

100% income tax exemption is available for a period of 10 years

Tariff Authority for Major Ports (TAMP) regulates the ceiling for tariffs charged by Major ports/port operators (not applicable to minor ports)

A comprehensive National Maritime Policy is being formulated to lay down the vision and strategy for development of the sector till 2025.

Cargo handling at the major ports is projected to grow at 7.7% p.a. (CAGR) till 2011-12

- Traffic estimated to reach 877 million tonnes by 2011-12

- Containerised cargo is expected to grow at 15.5% (CAGR) over the next 7 years

The New Foreign Trade Policy envisages doubling of India’s share in global exports in next five years to $150 billion (Rs.675000 crores)

- A large portion of the foreign trade to be through the maritime route: 95% by volume and 70% by value

Growth in merchandise exports projected at over 13% p.a. underlines the need for large investments in port infrastructure

Investment need of $13.5 billion (Rs.60,750 crores) in the major ports under National Maritime Development Program (NMDP) to boost infrastructure at these ports in the next 7 years

- Under NMDP, 276 projects have been identified for the development of Major ports

- Public–Private partnership is seen by the Government as the key to improve Major and Minor ports

* 64% of the proposed investment in major ports envisaged from private players

The plan proposes an additional port handling capacity of 530 MMTA in Major Ports through:

- Projects related to port development (construction of jetties, berths etc.)

- Procurement, replacement and/or up-gradation of port equipment

- Deepening of channels to improve draft

- Projects related to port connectivity

Investment need of $4.5 billion (Rs.20,250 crores) for improving minor ports