Monday, June 3, 2013

AP has the highest share of Port projects under construction under PPP model


The State of Andhra Pradesh commands the lion’s share of over 46 per cent with three projects worth over Rs. 20,000 crores under construction in the ports sector under the Public-Private Partnership (PPP) model as of April 30, 2013.

 “With three projects worth over Rs. 1,425 crores, 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 the 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, Kerala has the highest share of about 40 per cent in the PPP ports projects under bidding,” highlighted the study that was jointly released by Mr. Ravindra Sannareddy, Chairman of ASSOCHAM Southern Regional Council, and Mr. D. S.  Rawat, National Secretary General, at a Press conference held in Hyderabad.

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

“While 21 PPP projects in the port sector with a share of over 52 per cent worth over Rs. 43,000 crores are under construction, eight projects worth about Rs. 14,000 crores with a share of about 17 per cent are under bidding,” stated Mr. Rawat.

“Of the remaining, one project is in the expression of interest stage (EoI) and one has been cancelled,” he added.

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

With two port projects worth over Rs. 4,100 crores 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 crores 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 and Odisha and the Union Territory of Pondicherry are the other regions with maximum share ranging between 7-16 per cent in the PPP projects worth over Rs. 2,900-Rs. 6,700 crores under construction.

With two projects worth over Rs. 5,500 crores, Kerala has the maximum share of about 40 per cent in the PPP ports projects under bidding. Maharashtra and Karnataka are the 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 Five Year 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 study.

The total capacity of India’s nine maritime states namely – Andhra Pradesh, Goa, Gujarat, Karnataka, Kerala, Maharashtra, Odisha, Pudhucherry 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 only the second State after Gujarat which realized the 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.

Considering that India’s port infrastructure is not on 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 result in higher costs, apart from the turnaround time at ports, the report said.

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 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,” it further said.

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. Hence, ASSOCHAM has suggested to 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 the 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.

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