Dissertation - Working Draft Final - Redacted PDF

School of Engineering and Mathematical Sciences
Performance of Indian Port Policies:

A comparative approach on regional and central port
policies on private sector participation
by
Astro Jaya Roger Barnabas
A dissertation submitted in partial fulfilment of the requirements for

the degree
MSc in Maritime Operations and Management
12/09/2016
Project Title: Performance of Indian Port Policies: A comparative approach on regional and
central port policies on private sector participation
Student: Astro Jaya Roger Barnabas
Supervisor:
Submission date: 12 September 2016
ABSTRACT
Seaborne trade is experiencing an exponential growth in India as a result ports are
now playing a vital role in being the nodal centre for numerous businesses. The Ports,
a public service offering are finding it hard to tackle with the sudden exponential
growth of the sector in terms of facilities and operations. Which led to other regional
ports such as Colombo, Singapore capitalising on the situation and acting as
transhipment hubs for the Indian ports. Hence the Ministry of shipping has
acknowledged that private sector participation would rejuvenate the ports system by
bringing in the much needed capital and expertise required. Various policies were
adapted by both the central and regional government to promote private sector
participation. However, while the ports belonging to central government are facing a
lot of difficulties in attracting private sector participation, the regional governments
have successfully garnered private sector participation resulting in the share of these
ports increasing over the period of time.
The scope of this project is to identify the reasoning behind the difference in attitude
of private sector participation in terms of port policy and port governance.
Furthermore, the project aims at studying the institutional structure governing these
ports through whom the policies are drafted. Since the Indian port sector consist of
two major groups of port institutions the approach by both these entities are compared
and contrasted to identify areas of strength and weakness between these port
policies. By using identified growth and performance indicators, individual policy areas
are studied to obtain the effectiveness over the period in attracting private
investments. Furthermore, we would be able to identify the policies better suited for
private sector participation in India.
ACKNOWLEDGEMENTS
Foremost I would like express my gratitude to my supervisor
for
his patience to guide me during the process of writing this project. His Knowledge
and guidance were priceless and encourage me to finish the dissertation in such a
short period of time.
I would also like to express my gratitude to my friends and family who gave the
moral support through this period of time.
ii
TABLE OF CONTENTS
1 Introduction................................................................................................................................ 1
1.1 BACKGROUND .................................................................................................................................. 1
1.2 RESEARCH FOCUS AND AIM................................................................................................................. 2
2 Literature review ........................................................................................................................ 3
2.1 PORT GOVERNANCE .......................................................................................................................... 4
2.2 PORT POLICIES ................................................................................................................................. 5
2.2.1 Institutional and Ownership Structure ................................................................................. 5
2.2.2 Planning and Development .................................................................................................. 6
2.2.3 Economic and Market Regulation ........................................................................................ 6
2.2.4 Labour arrangements ........................................................................................................... 7
2.3 INDICATORS TO ASSESS THE PERFORMANCE OF PORT POLICIES................................................................... 7
2.3.1 Port Throughput ................................................................................................................... 8
2.3.2 Capacity Utilisation and Turnaround time............................................................................ 8
2.3.3 Pricing ................................................................................................................................... 9
2.3.4 Competition ........................................................................................................................ 10
2.3.5 Labour productivity............................................................................................................. 11
3 Research methodology ............................................................................................................. 13
3.1 RESEARCH STRATEGY ....................................................................................................................... 13
3.2 DATA COLLECTION .......................................................................................................................... 13
3.3 LIMITATIONS .................................................................................................................................. 14
4 Port Governance and Corresponding Port Policies in India ......................................................... 14
4.1 MAJOR PORTS ................................................................................................................................ 15
4.2 THE BUREAUCRATIC NETWORK .......................................................................................................... 17
4.2.1 Port Sector Organisations ................................................................................................... 18
4.2.1.1 Indian Ports association (IPA) ...................................................................................................... 18
4.2.1.2 Indian Private Ports & Terminals Association(IPPTA) .................................................................. 19
4.2.2 Policy Initiatives for major ports ......................................................................................... 19

4.2.2.1 National Maritime Development Programme(NMDP) ................................................................ 20
4.2.2.2 Model Concession Agreement (MCA) ......................................................................................... 20
4.3 MINOR PORTS ................................................................................................................................ 21

4.3.1 Gujarat Maritime Board ..................................................................................................... 23
5 Findings .................................................................................................................................... 25
5.1 PORT GOVERNANCE ........................................................................................................................ 25
iii
5.2 PERFORMANCE OF THE PORT POLICIES: A COMPARATIVE STUDY .............................................................. 27

5.2.1 Port Throughput ................................................................................................................. 27
5.2.2 Average Turn Around Time and Capacity Utilisation:......................................................... 29
5.2.3 Tariff Regulation & Competition ......................................................................................... 31
5.2.4 Labour Productivity............................................................................................................. 33
6 Conclusion ................................................................................................................................ 34
7 .References ............................................................................................................................... 36
8 Appendices ............................................................................................................................... 39
8.1 FIGURES AND CHARTS ...................................................................................................................... 39
8.2 TABLES:......................................................................................................................................... 41
iv
ABBREVIATIONS
BOOT
Build Own Operate Transfer
BOT
Build Operate and Transfer
BOMT
Build Operate Maintain Transfer
ChPT
Chennai Port Trust
DBFOT -
Design, Build, Finance, Operate, Transfer
DLB
Dock Labour Board
GAPL
Gujarat Adani Ports Ltd
GMB
Gujarat Maritime Board
GPPL
Gujarat Pipavav Port Ltd
HDC
Haldia Dock Complex
JNPT
Jawaharlal Nehru Port Trust
KDS
Kolkata Dock System
KoPT
Kolkata Port Trust
KPT
Kandla Port Trust
MbPT
Mumbai Port Trust
MoPT
Mormugao Port Trust
MoS
Ministry of Shipping
NMPT
New Mangalore Port Trust
NSICT
Nhava Sheva International Container Terminal
OECD
Organisation for Economic Co-operation and Development
PPP
Public Private Partnership
TAMP
Tariff Authority for Major Ports
VOC
V.O. Chidambaranar
VPT
Visakhapatnam Port Trust
LIST OF TABLES
Table 1 : Basic Port Management Models _______________________________________________ 4
Table 2 : Factors Identified as affecting Port Competitiveness ______________________________ 11
Table 3 : List of Policy areas, Instruments and Indicators __________________________________ 12
Table 4 : List of all major ports (state wise) and their Governing body ________________________ 16
Table 5: List of all states with minor ports and their regulatory body & authority _______________ 22
Table 6: Policy Initiatives by Gujarat Maritime Board _____________________________________ 23
Table 7: Project Structures for Privatisation under GMB Port Policy __________________________ 24
Table 8 : Tariff Structure of Gujarat Maritime Board ______________________________________ 25
Table 9 : Growth in Cargo Traffic at Indian Ports _________________________________________ 28
Table 10 : Average turnaround time for container ships in India and other ports in the region_____ 34
Table 11 : Average Turn Round Time (days) of major ports through 1990 - 2015________________ 41
Table 12 : Capacity Utilisation, share of traffic and turnaround time of all major ports ___________ 41
Table 13 : Share of cargo throughput of major ports 2008 - 2016 ____________________________ 41
Table 14 : Capacity Utilisation of major port during 2004 - 2015 ____________________________ 41
Table 15 : Timeline of Capacity addition by GMB in Gujarat Minor Ports ______________________ 42
LIST OF FIGURES
Figure 1: Institutional Structure governing the administration of major ports ................................... 18
Figure 2:Institutional Structure governing the Administration of Gujarat Ports ................................. 24
Figure 3:Share of Major and Minor ports in total port throughput from 1990 to 2015 ...................... 28
Figure 4: Average Capacity Utilisation of Major Ports ......................................................................... 29
Figure 5: Capacity Utilisation of Gujarat Maritime Board Ports ........................................................... 30
Figure 6 : Average Turnaround time of Mundra port in comparison with other major ports ............. 31
Figure 7 : Comparison of Cargo handled by minor ports ..................................................................... 39
Figure 8 : Share of Cargo traffic for major and minor ports ................................................................. 40
Figure 9 : Trend in Capacity Utilisation of Major Ports 2004 - 2015 .................................................... 40
vi
1 Introduction
Recent trends in international trade have led to the increasing importance of ports
being the prime nodes in transportation (De, 2006), which can be largely attributed to
the numeral technical and economic advantages posed by shipping over the
traditional methods of transport. The Maritime Transport carries over nine-tenths of
the tonnage of world international trade and is dominated by private companies which
have made the shipping industry highly competitive by delivering an ever increasing
capacity, higher service levels and declining unit shipping costs. To access and
extract the benefits from this vital resource each nation depends on the performance
of its port sector that stands as an interface between the sea and land transportation
modes.(Bank, 2013)
1.1 Background
India has a coastline of 7,517 km (4,671 mi) which is serviced by 212 ports which
includes 12 major ports and 200 non-major ports (minor or intermediate ports). Over
the years the shipping industry has played a very crucial role in the countrys
economy. During the financial year of 2015 - 2016 approximately 95% of the countrys
trade by volume and 68% by value is moved through sea. The Indian ports have met
a rapidly expanding traffic necessary for the nation trade growth by handling 1072.47
million tonnes as of 2016 with an increase of 1.9% over 2014-15 compared to 105.82
million tonnes handled in 1984. Of the total cargo handled by the ports the share of
the major ports is at 55% and the remainder being handled at the minor ports. Over
the last twenty years the performance of these ports has also improved significantly,
the average vessel turnaround time has reduced by around 50% and berth
productivity has quadrupled contributing mainly towards containerisation, greater
reliance on mechanised systems and improved management through private sector
participation. Though there is a wide variation in performance between them, ports
such as JNPT and Chennai score well on most performance criteria however berth
and crane handling rates at Indian ports are much lower compared to their
international counterparts like Singapore, Jebel Ali, Port Klang. Despite a very
satisfying record of achievement in attaining both volume and performance over the
last couple of years, India ranks 35th in the international logistics performance index
(LPI) rankings and scores 45.8 in the Liner shipping connectivity index1 while
neighbouring seafaring states such as Singapore, Malaysia and UAE have fared
Liner shipping connectivity index, an indicator for the supply of liner shipping services
Page 1 of 49
much better. The general inefficiency of Indian ports has led to higher vessel related
and cargo related charges which in turn have led to operators charging higher freight
rates from India compared to other ports in the region. The underperformance of the
port sector can be related to the following reasons inability to handle the largest of
vessels, poor hinterland connectivity, insufficient private sector participation, failing
port
governance
structures
and
lack
of
proper
legal
& regulatory framework. Furthermore the uncertainty in the container movements in

Indian ports has led to major container operators resist their main line (mother)
vessels being sent to India (Shashikumar, 1998). This turned out to be a great
opportunity for neighbouring ports like that of Colombo, Sri Lanka where 70% of its
volume are transhipments to and from India, East Africa and Bangladesh. Colombo
Commands the largest share of Indias foreign transhipment volume accounting to
about 48%, this is mainly because of the inability of ports on the east coast to cater
ships sized 10,000 TEU or greater, and that of west coast ports with an overburdened
hinterland connection.
The Ministry of Shipping (MoS) has foreseen Private Sector Participation as the
solution to improve the performance of the ports and lead to infrastructure
development through investments. However due to perceived risks such as inability
for economic control of their facilities, Bureaucratic delays, statutory clearance
problems, opposition from local communities and huge labour issues are reluctant in
investments in the major ports. As a result, performance of these ports are still not
able to match those of their competition in the same region. In contrast to that, minor
ports have been garnering a lot of private investments recently. A number of Public
and Private partnerships have been formed in these ports, which has led to the
development of these ports and also in attracting majority of the countrys cargo traffic.
Private Ports such as Mundra, Pipavav, Krishnapatnam and Gangavarm have
exhibited better performance standards and contribute a fair share of the nations
cargo throughput. Private Terminals and Ports alone have handled majority of the
cargo by the minor ports and to that of the countrys total throughput. One of the main
reasons for this difference in scale is that of the governance of these ports lies
between two different administrations and the port policies that bind these port vary
with these administrations too.
1.2 Research Focus and Aim

The economic policy adopted in India has resulted in two different approaches
towards seaports a national model (Major Ports) and a regional model (Minor Ports)
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in terms of control of ports. As a result of that administrative control of these ports are
right now split between the central government and the state governments. This led
to a diversity in the policies governed by the ports as different policies were developed
by both the central government and states government for their respective ports.
These policies reflected the attitude of the administrative authority towards the control
of their ports as a result, ports of the central government are highly centralised and
protective in nature while that of the individual states are highly decentralised and are
market oriented. The nature of these policies led to different approaches in various
policy areas such as port planning and development, port governance, economic and
technical regulation, Labour arrangements etc.
This Project intended to analyse the contrast between these port policies in terms of
control and the range of activities into which it engages. In order to identify the
successful framework and the policy structure in terms of port development the
performance of these policies are weighed against each other using performance
indicators to observe outputs and trends over period. The two policies that are
intended to be compared and analysed are that of the state Government of Gujarat
and that of the central government of India
2 Literature review
Though various literature is available for evaluation of development and performance
of ports with respect to different other factors. Only a few are available for evaluating
port policies to that of the performance of the ports and their development. One of the
key works in relation to the performance of port policies is by Olaf Merk (2013) in
OECDs2 Regional Development Working Papers on the effectiveness of port city
policies where he has identified a number of policy areas and performance indicators
in order to measure the outcomes achieved by the different policy actions This is to
provide a framework to evaluate current policy settings relative to a benchmark of
best practices. Of the identified policy areas is port development its corresponding
outcome indicators are port throughput, Efficiency Index, Growth of throughput,
Maritime connectivity. This literature review gives an overview of all past works related
to port governance and port policies to have a structural idea on the later part of the
study. In order to identify the performance indicators necessary for the comparison of
theses port policies numerous previous works by various authors have been reviewed
to help find the right indicators for individual policy areas.
OECD - The Organisation for Economic Co-operation and Development
Page 3 of 49
2.1 Port Governance

Port Governance Models are vital when it comes to policy making as different models
have a different approach on their policies. The Policies can be centralised as in the
service ports or fully decentralised as in the landlord models. Port administration
models are influenced by a number of factors namely the socio-economic structure of
the country, its historical development, its location the types of cargo it handles. The
distinguishing nature of these models are specific characteristics such as the
provision of service (Public, Private, Mixed), the Orientation (Local, regional or global),
Ownership of Infrastructure & Superstructure and handling equipment and the status
of the port labour and management. Traditionally in line with ownership models, ports
have been classified as state-owned ports, autonomous public trusts, municipal
ownership and private ownership ports. In due course of time four main models
emerged successfully the Service ports, Tool ports, Landlord ports and Private
Service Ports. On these lines, the service and tool ports mainly focus on realising
public interests whereas the landlord ports are fixated in achieving a balance between
the public and private interest. Finally, the fully privatised ports emphasise the
interests of the shareholders. This model of classification mainly concentrates on the
public - private status of port operations and management. However, there is also a
categorization of ports on the basis of public decision making in port operations,
administration and policy wherein a variety of models exist from centrally controlled
ports to ports controlled by local administration and municipal authorities; this also
includes autonomous and corporate ports (World Bank, 2016)
Table 1 : Basic Port Management Models
Type
Public Service Port
Tool Port
Landlord Port
Private Service Port
Infrastructure
Superstructure
Public
Public
Public
Private
Public
Public
Private
Private
Port Labour
Public
Private
Private
Private
Other Functions
Public
Public/Private
Public/Private
Private
Source:(Bichou, 2009)
In ports either controlled centrally or by local administration the decision making in

port operations, management and policy are done by the concerned administration.
This provides a uniform administration and policies to all the ports under it. Countries
like India still function on this system wherein the major ports are controlled by the
Page 4 of 49
central or federal government whereas the regional governments are given control of
all the other ports within the boundaries of the coastal state (Bichou, 2009).
2.2 Port Policies

A Port Policy is an integral part of the overall economic policy of a country, one of the
main reasons for such a perspective is because of the role of ports as an economic
driver that generates benefits and socio-economic wealth through the aggregation of
all the maritime activities. Overall the key function of a port policy is to encourage
sustainable port development to cater to the forecasted growth in volumes while being
efficient, competitive and cost effective to its customers.(Department of Transport,
2012).As Crucial as these policies are they are equivalently complex as there is no
single methodology for designing policies for these port institutions and this is
attributed to the diversity in the administration models of these establishments. Hence
different countries adopt their economic policies towards seaports in terms of control
of the seaports (National, Regional and Local Governments). (R O Goss, 1990)
As Alderton explains , the Key to any maritime policy is the extent to which
governments and public entities are involved in the process of planning , development
and operations ,and in the aspects of technical and economic regulation .The
Regulators are public authorities empowered by legislation to license and monitor the
sectors operators and regulate their activities with regards to labour ,safety ,security
and environmental sustainability .They are also in charge of monitoring competition
and rivalry against market failures, Regulating the negotiation of public-private
partnership (PPP) contracts and concessions, Including prescribing the terms and
conditions of pricing and performance targets and arbitrating disputes that may occur
during and after negotiations.(Alderton, 2008). Typically, any port policy should
address the following attributes of the sector
2.2.1 Institutional and Ownership Structure

Institutional and ownership structure of ports largely depends on the states policy
towards the ports, they can be protective in nature such as the public service ports
and landlord models thereby protecting the state's interest or can enable market
foothold through privatisation and thereby making them more autonomous structures
enabling higher quality of service but this results in state losing its power on the
ownership and operations of the port. In todays market-oriented port business,
private sector participation is a necessity to gain a foothold in liberalised trade and
offer equal footing for the port services in comparison to the international competition.
Page 5 of 49
2.2.2 Planning and Development

Port Planning and development set its objective as to seeking a balance between
shortages in capacity and overcapacity at adequate cost, price and service levels.
The study of port capacity involves two primary components capacity planning and
capacity management. Wherein capacity planning is an economic process of
predicting the required additional capacity that matches the future demand for the port
services, and capacity management is a process of optimising the port operations for
a given capacity while maintaining the costs and services provided by it. Both
Capacity Planning and management are attained through structural and nonstructural measures of port capacity Under the structural measures the focus is
primarily on the expansion of the facility through dredging works (accommodating
bigger ships), Land Reclamation and acquiring new port equipment whereas the nonstructural measures focus on reducing the demand through other means such as
congestion pricing ,traffic diversion and slot auctioning and improvement of
operational and procedural efficiency .
2.2.3 Economic and Market Regulation

Economic and market regulation typically involves intervention in the functioning of
the market in term of setting and controlling tariffs, revenues and profits, controlling
market entry or exit and overseeing that fair and competitive behaviour and practices
are followed within the sector. Thus it Primarily deals with three key policy areas such
as market access, Competition and Pricing.
Port related competition can be categorised as Inter-port competition, Intra-port
competition and Intra-terminal Competition. Inter-port competition arises between two
ports serving the same hinterland, and the scale of Competition depends on the size
of the hinterlands the ports generally serve whereas Intra Port competition is between
two or more terminal operators within the same port who are competing for the same
type of cargo. Inter-terminal competition, in general, is between two companies
providing the same service within a terminal. Encouraging competition is considered
healthy and encouraged by the administrative body to prevent monopolistic market
position leading to higher tariffs for cargo. Competition regulation in some cases takes
the form of tariff regulation.
Depending on the sources of port finance, the structure of port costs and regulation
of port demand the port pricing methods vary broadly from Cost based pricing to
Congestion Pricing and Strategic Pricing. The strategies vary heavily based on the
institutional and ownership structure of the port as a public service model might adapt
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to that of a cost-based pricing as the necessity for recovering the infrastructure costs
is not held as a priority.
2.2.4 Labour arrangements

Labour arrangement is always one of the main issues with port policies this is due to
the evolutionary change in the role of ports and their operations through trade
liberalisation and globalisation. Earlier Ship and handling activities were fairly
straightforward and the labours employed were largely casual and temporary ones
but with advances in ship technology and an increase in port mechanisation and
automation, port operations have become more capital intensive and less dependent
on the labour. This lead to a lot of labour reforms including loss of jobs at larger scale
though this was an unavoidable outcome of modernization of the ports it had achieved
greater productivity of the ports. The only requirement was that of a skilled workforce.
Port Policies are required to include the interests of the labour workforces too in order
to protect them from the highly volatile market and at the same time handle it to give
way for reforms in the development of the industry.
2.3 Indicators to Assess the Performance of Port Policies

Olaf Merk (2013) identifies that port policies are effective in stimulating high port traffic
performance which is characterised by growth in traffic volumes, port efficiency, and
port connectivity as a central and diversified node. Port Policies are aimed at
developing growth at that specific port(s) to identify the effectiveness of these policies
the growth witnessed in these ports should be quantified using indicators that
measure the performance of these ports. UNCTAD describes port performance
indicators as measures of various aspects of the ports operation which are used as
input for negotiations on port congestion surcharges, port development, port tariff
considerations and investment decisions (UN - United Nations, 1976) . Put together
these indicators in a time series forms a vital resource for evaluating a policy and for
modelling a new one based on past performance. Olaf Merk, (2013) using indicators
such as port throughput, Efficiency Index, Growth of throughput, Maritime
connectivity, etc. identified that performance of these policies can evaluate
Many models exist for the identification of the right performance indicators for port
performance Hassan (1993) suggested that complicated, interconnected port
operations are divided into four categories: Ship operations, Cargo handling,
Warehousing, Inland transportation. This sort of a model can be used to evaluate
different performance indicators to perform port improvement analysis, to study port
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expansion possibilities, to estimate future view of the port and economic impact
evaluation. Trujillo and Nombela, (1999) identifies there are many ways of measuring
port performance, which can be broadly reduced to three broad categories: physical
indicators, factor productivity indicators, and economic and financial indicators.
Physical indicators are time measures that are mainly concerned with the ship (e.g.
ship turnaround time, ship waiting time, berth occupancy rate, working hours at berth).
Factor productivity indicators focus on the maritime side of the port; this includes
productivity of labour and capital. Similarly, economic and financial indicators are
usually related to the ports finances and the level of charges to the users this generally
includes a charge per twenty-foot equivalent unit (TEU). Similarly, Thomas and Monie
(2000) suggested that the measures can be divided into four categories also. These
are production, productivity, utilisation and service measures. Rajasekar and Deo,
(2011) used indicators such as cargo handling rate, container traffic, average
turnaround time, average pre-berthing time, etc to evaluate the performance and
growth of major ports. The models for assessing port performance through these
indicators has changed through time owing to globalisation and modernization of the
port industry.
2.3.1 Port Throughput

The effectiveness of port policies is measured directly through port throughput as
these policies are focussed on promoting the volume growth through a wide range of
actions like planning long term strategies, develop activities on port sites, developing
new port functions, modernising port terminals, good labour relations. The collective
benefits of these are realised as higher cargo volumes in these ports (Olaf Merk,
2013). Olaf and Dang also identified that policies with lower scores are usually
associated with lower traffic volumes and that with best practices are associated with
higher growth in traffic volumes.
2.3.2 Capacity Utilisation and Turnaround time

Development of Port Capacity Involves both capacity planning and capacity
management where in capacity planning for port infrastructure essentially involves
establishing the optimal capacity whereby port facilities and services are provided at
the appropriate service time and cost levels, and that of capacity management refers
to optimisation of port operations for the same given capacity while ensuring a balance
between cost-effectiveness and service quality (Bichou, 2009). As Ports are seen as
pivots of regional development infrastructure is built far ahead of demand in order to
promote economic development. According to Jeevan et al. (2015), the provision of
Page 8 of 49
adequate port capacity ensures the port sector moves ahead simultaneously with
globalisation, but the same has been subjected to government regulation and national
policy on infrastructure development.
H.E. Haralambides (2002) discusses that excess capacity is also an operational
necessity as its the only way to provide for a quick turnaround time to ships so that
ports would be able to maintain and increase patronage. Also once a port reaches
70% capacity utilisation, Congestion ensues in terms of high waiting times in todays
shipping standards. Though this establishes the relation between better port efficiency
through lower turnaround times in line with that of the capacity utilisation of the ports.
The addition of Capacity in ports is through policy initiatives like that of Master plans
for ports and Short term strategy plans. While on the other hand, Capacity
management is achieved through best practices in operations. (Meersman et al.,
2008) observes that one of the decisive factors in individual shipping companies
behaviour is their aversion to any potential time loss. Ports with the least amount of
bottlenecks are considered first hence is the importance of having enough freely
available capacity. The product of the available capacity to that of the utilisation factor
is a very useful indicator for future throughput (Primarily applied to container terminals
and ports). The Port Regulator of South Africa identifies that when capacity utilisation
exceeds that of 80% of available capacity, it becomes more expensive to conduct and
handle additional trade through the port. Vessel waiting times and associated costs
generally rise exponentially to point where it becomes unacceptable, and the only
other option is the addition of more capacity(Africa, 2015).Future throughput plays an
augmented role in that of both capacity planning, and capacity management port
policies that reflect practical needs with strategic plans help overcome overutilization
and congestion both in the short term and longer period.
2.3.3 Pricing
Tariff structures such as port dues and cargo handling charges have the tendency to
make or break a port while the right prices would lead to prosperity and growth; the
wrong ones seemed to have the opposite effect. Higher Prices tends to deprive a port
of its patronage and thus a decrease in demand for its services, even in the case of
monopolies higher prices tends to affect the trade that the port serves. On the other
hand, lower port prices bring in more clientele but increases the congestion in these
ports; investments costs cannot be recovered, and an unfair competition exists if in
particular, the lower prices are a result of subsidies. (Bichou, 2009) Identifies that
Depending on the sources of port finance, the structure of port costs, the elasticity
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and regulation of port demand, port objectives and relevant factors, Methods involved
in port pricing vary from marginal cost and average cost pricing to congestion and
strategic port pricing.
Broadly Speaking of the pricing strategies Marginal cost strategy involves charging a
marginal cost on the port infrastructure and resource, on the port users and on the
society than the variable costs involved with it while the port investments are not taken
into account. On the other hand, average cost pricing is used prominently by
regulators to set a limit they are able to charge the user for the service provided. this
strategy sets the price to that of the average costs incurred in providing the services
and facilitates the addition of cost recovery price for the investments. Congestion
Pricing involves adding a surcharge to the users in order to reduce port congestion it
combines both demand based and variable cost strategies to regulate port demand
without increasing the supply. Strategic Pricing pursues a multitude of objectives it
can be used as a tool for competition or can take forms of marginal cost pricing or
average cost pricing or Ramsey pricing or a combination of all of them. Ramsey
Pricing involves some level of discrimination through the type of shipping service, type
of traffic and the value of the cargo.(Bichou, 2009)
2.3.4 Competition
Port Competition is used to reflect the current status of the industry, as they make
their own efforts in maintaining some degree of cargo flow .Through this process,
these entities face ever increasing competition from their neighbours .Upon
Examination of this competition,(R. O. Goss, 1990) lists them in five different forms
competition between whole range of ports ,competition between ports in the various
countries, competition between individual ports in the same country, competition
between the operators or providers of facilities within the same port, competition
among the various modes of transport. The Types of Port Competition are further
simplified into inter-port competition, intermodal transportation competition and intraport competition (UNCTAD, 1992), and this had been further simplified into inter-port
competition and intra-port competition
To maintain the competitiveness of a port, the country stimulates its port industry to
meet the diverse demands through expansion and improvement of its port facilities
and its services. Several Factors affect port competitiveness which is used to compare
with other ports to improve the port's competitive position. With the migration of ports
from service centres to nodal centres for integrated transport and distribution chain
the effective factors have changed from mere port charges to total distribution costs
Page 10 of 49
.A study by (UNCTAD, 1992) identifies three core elements of the total distribution
costs Money , time , risks through which the port that offers the minimalistic value of
the three elements is considered the most competitive one. One of the main factors
considered by ship owners when it comes to choosing the port of call for the ships is
the turnaround time which in turn makes it the major factor that affects the
competitiveness of these ports (UNCTAD, 1992).
In line with port competition availability of capacity is a major factor that attracts new
cargo flows and retains the current flows too. Though port competition is viewed in
respect to specific properties (YEO et al., 2005) realistically it includes twelve
components that attribute to competitiveness. In spite of these number of factors
shipping companies choose a port with the least bottlenecks and congestion. Often
growth is envisaged by shipping companies, and the choice of the port is that one
which allows for that growth too hence this looks into hinterland connectivity, berth
productivity and capacity in whole. (Olaf Merk, 2013) in their OECDs report observe
that Port Competition is found in ports with high levels in traffic volumes, and value
added.
Table 2 : Factors Identified as affecting Port Competitiveness
Effective factors
(Ffrench, 1979)
Terminal Facilities, Tariffs, Port Congestion, Service Level, Connectivity

and Port Operators
(Willingale, 1981)
Location Factor, Operational Factor, Fiscal Factor and Manpower Factor
(Slack, 1985)
Calling Frequencies, Tariffs, Accessibility, Port Congestion, Hinterland

Connectivity
(Peters, 1990)
(Murphy,
Daley
Service Level, Capacity, Port Operation Policy

and
Port Detention, Port Accessibility,Calling Frequency and Port Size
Dalenberg, 1992)
(Kim, 1993)
Port Service Quality, Port Productivity and Price Competition
(Tongzon et al., 2005)
Port (Terminal) Operation Efficiency Level, Port Cargo Handling Charges,

Reliability, Port Selection Preferences of Carriers and Shippers, The Depth
of the Navigation Channel, Adaptability to The Changing Market
Environment, Landside Accessibility, Product Differentiation
2.3.5 Labour productivity

Port Labour and cargo handling activities have been fairly straightforward but with
advances in ship technology and the increases in port mechanisation and automation.
Port operations become more capital intensive and less dependent on the workforce.
With increased privatisation and institutional restructuring, there is an increasing
demand for operational efficiency. The mechanisation of the ports together with that
Page 11 of 49
of growing demand for operational efficiency lead to the demand for more skilled
workers, and the previously unskilled workforce was made redundant. This Transition
has affected labour productivity in ports of many developing countries where the
transition is still taking place. The presence of labour unions in these ports has
compounded these problems as these unions put job security as a priority to that of
the development of ports.
Measurement of labour productivity in ports is different than in other industries as the
amount of cargo handling does not have a regular pattern, and therefore daily
employment varies widely. In this context the productive efficiency of a port and the
dock workers can be judged by looking into the port efficiency, the rate of cargo
handled per gang shift and the labour cost per unit of cargo. Since Port Work consists
essentially of cargo handling operations, the effectiveness of the port can be judged
from how fast the ships are being cleared from port i.e. the turnaround time of the
ship. Though the turnaround time of the ship is determined by a number of factors
labour efficiency is its most important determinant. As an indirect measure, the
turnaround time can be taken as indicative of the trend in labour efficiency in cargo
handling operations. A more direct measure for calculating the labour productivity in
ports is the cargo handled per gang shift or the number of moves per hour for
container terminals.(Johri and Agarwal, 1968)
Table 3 : List of Policy areas, Instruments and Indicators
Policy Areas
Policy instruments
Indicators
Port development
Long term strategic port planning
Port throughput
Port throughput containers
Growth port throughput
Modernisation of port terminals

Port information systems
Industrial development policies on port site
Growth port throughput TEUs
Development of new port functions

Port labour relations
Upgrading port workers skills
Port Planning
Market Access and

Economic Regulation
Capacity Planning
Capacity Utilisation
Capacity Management
Average Turnaround time
Port Pricing Strategies
Berth Productivity
Port Competition
Tariff Regulation
Labour Arrangements
Labour Productivity

Berth Productivity (Cargo
handled per gang shift)
Container moves per hour
Page 12 of 49
3 Research methodology
3.1 Research Strategy
The main objective of this paper is to analyse the performance of these policies
through the performance of the ports and their growth. It follows a case study strategy
through which the port policies of the central government and the regional government
specifically the state of Gujarat is studied, and their performance examined against a
base set of indicators. In order to analyse the performance of these indicators
Statistical data and raw data are collected through a period of time within the
limitations applied.
The study uses both quantitative and qualitative research methodology .Quantitative
research explains phenomena according to the numerical data which can be analysed
by means of mathematically based methods ,in particular, statistics (Yilmaz, 2013).
In Contrast Qualitative research methodology by itself is difficult to define because of
its multi-faceted nature thats underpinned by different paradigms (Hitchcock and
Hughes, 1995). Gay, Mills and Airasian, (2011) define qualitative research as the
collection of extensive data on many variables over an extended period of time, in a
naturalistic setting in order to gain insights not possible using other types of research.
Thus Qualitative analysis uses an overarching category covering a broad range of
approaches and methods found within different research disciplines (Ritchie et al.,
2013). This may include a wide variety of theoretical paradigms, methodologies,
research strategies and methods in qualitative research traditions, ranging from
descriptive study, case study, eld research, ethnography, participant observation,
biographical method, life history, oral history, narrative inquiry to phenomenological
studies, ethnomethodology, symbolic interactionist study, grounded theory and action
research.(Yilmaz, 2013). Though both Quantitative and Qualitative research methods
differ in their approach completely (Creswell and Plano Clark, 2011) argue that a
combination of both these methods may provide a better understanding of research
problems through comprehensive findings , increased confidence in results ,
increased conclusion validity and more insightful understanding of the underlying
phenomenon.(Johnson, Burke & Christensen, 2013).
3.2 Data Collection

Collection of data for the analysing the performances of port policies in areas that had
been identified in the literature review through the specified indicators are mainly
sourced through statistical data obtained from the Ministry of Shipping, Indian Ports
Page 13 of 49
Association, Director general of commercial intelligence and statistics, ministry of

commerce and Annual reports of Individual Port Trusts. Secondary data obtained
from these statistical reports are to be charted and observed for patterns indicating
their effects on various port policies. The Performance of these indicators is plotted in
a time series to be used as an indicator of the performance of their respective policy
areas. The data so obtained forms the basis for the quantitative research method
adopted.
3.3 Limitations
As Statistical reports and Secondary data from Port Organisations, Port authorities
and Ministry of Shipping in India are used for analysing the performance of the ports
the availability of the data is limited in certain areas such as operational details of
those from private ports and operators.
4 Port Governance and Corresponding Port Policies in India

The Port Governance in India is structured by ownership and administration models,
and regulatory frameworks (National Transport Development Committee, 2015) is
much different to models followed in other parts of the world. Much of the functioning
models in India are that of the models followed during the colonial era of the country
as most of the current major ports in India were set up during that period of time and
the system was modelled to replicate that of the successful service port models
followed in the British ports at that period of time and yet this has not been the same
case in the United Kingdom where the ownership structure has drastically changed
with heavy privatisation and their consequential development. In India, there have
been only moderate changes to the port model in the area of private sector
participation which was induced during the year 2000, but this has been limited to
terminal operations as in the case of the major ports. Still, much of the countrys ports
still remain a public service port with adaptation of privatisation limited in few of these
ports. The Protective nature of the countrys policy towards the ports have slowed
down their development as its directly affects the investments in the ports which is
otherwise limited to public funding (the yearly budget as in the case of India).
All the Ports in India are administered under the Indian Ports Act,1908. which lays
down the various regulations on matters pertaining to the jurisdiction of central and
state governments over the ports , rules for the safety of shipping and conservation
of ports , administration of port dues, pilotage fees and other charges (Goverment of
Page 14 of 49
India, 1908). Apart from the above legislation for all Indian ports there is a further
division in legislation for the Port Sector in India.
Port sector is widely divided into two major sectors the major ports and the minor ports
by the Indian Ports Act ,1908 and their corresponding legislation varies accordingly.
The legislation plays a vital role because it decides various aspects of port like the
organisational structure, port development, port planning, port investments and
financing and pricing strategies. While the most of the major Ports still remain under
the central government with that of a public service port model, on the other hand, the
minor ports in India have evolved widely adapting to new market requirements through
privatisation and partnerships
4.1 Major Ports

The Major Ports Sector include 13 Ports as listed in Table 4 across 9 maritime
regions or states .All these Major Ports are structured as trust ports under the Major
Ports Trust Act,1963 which establishes them as semi-autonomous bodies that are
under the administrative control of the ministry of shipping and also they are placed
on the union list of the Indian Constitution which establishes that all law regarding
these bodies are directly drafted by the central government of India, and the Individual
Maritime States would not have any say in that matter.
Under the Major Ports Trust act ,1963 each port is governed by a board of directors
who are nominated by the central government that Includes a chairperson and deputy
if it's deemed necessary for one and other trustees not exceeding seventeen who are
persons representing the labour employed in port , government of the state in which
the port is situated ,Specific Government departments and other interests which the
governments sees fit .The Board is fully controlled by the central government while
their members represent the various interests. The trustees are set to follow the policy
decisions of the government while their financial powers are limited, Port Dues and
Port Terminal Services rates are fixed by TAMP, and there is a ceiling for capital
expenditures above which requires approval from the central government. The Duties
of the Trustees include the development of port facilities, Port Performance, Terminal
Services and Infrastructure.
Though that is the case for most of the major ports one of them namely Ennore which
was corporatized and incorporated in 1999 under the companies act, 1956. Where in
two-thirds of the share of this port are owned by the government of India and onethird by the Chennai port trust. This was run as a pilot project to assess the
Page 15 of 49
performance of the port under a different framework which was later let go for various
reasons. Moreover, the central government of India has the authority to declare any
port in India a major port by notification in the Official gazette. The Major Port Trusts
Act, 1963, empowers the Shipping Ministry to control virtually all aspects of the
development and management of the Major Ports by limiting the power vested to the
boards.
Table 4 : List of all major ports (state wise) and their Governing body
S.No Port State
Port
Governing Body
Tuticorin
Tuticorin Port Trust
Chennai
Chennai Port Trust
Ennore
Ennore Port Limited
Mumbai
Mumbai Port Trust
Jawaharlal Nehru
Tamil Nadu
Maharashtra
5
6
Gujarat
Kandla
Kandla Port Trust
Goa
Marmugao
Mormugao Port Trust
Karnataka
New Mangalore
Kerala
Cochin
Cochin Port Trust
10
Andhra Pradesh
Visakhapatnam
11
Orissa
Paradip
Paradip Port Trust
12
West Bengal
Kolkata
Kolkata Port Trust
Haldia
Haldia Dock Complex
13
Source: Indian Ports Association, Ministry of shipping
Page 16 of 49
4.2 The Bureaucratic Network

All the major ports in India are administered under the ports wing of the department
of shipping, a subsidiary of the Ministry of Shipping, Road transport & Highways. The
Port wing covers all the development and management aspects of the major ports.
This Includes administration of the Indian Ports Act, 1908 and the Major Port Trusts
Act, 1963, Formulation of infrastructure policy for ports, shipping and inland
waterways, Legislation relating to and coordination of the development of Minor and
Major Ports, Formulation of the privatisation policy in the infrastructure areas of ports
The planning of major ports is done by the Ministry of Shipping and Transport on the
basis of plans drawn by port trust and in consultation with other organisations like the
Planning Commission, National Development Council, Ministry of Commerce,
Ministry of Finance, etc. The Department of Economic Affairs in the Ministry of
Finance handles all the port-related issues such as policy related issues in ports,
Examination of investment proposals which require approval, Matters related to
infrastructure financing & promotion, Policy issues related to Public Private
Partnerships, all proposals for Foreign Direct Investment to be approved by FIPB
(Foreign Investment Promotion Board).
The Planning Commission is charged with the responsibility for the assessment of all
resources of the country and formulating plans for the balanced utilisation of
resources and determining priorities. The Planning Commission generally develops
all of the 5-year plans for the country with an emphasis on the development of the
public sector and state industries. The Transport Division of the planning commission
is issued with the following tasks pertaining to ports evaluation of Project Reports /
Feasibility studies, assessing port capacities and traffic requirements of individual
ports, Monitor port, labour and equipment productivity to ensure fulfilment of the
productivity norms, Review of the functioning of the Major Ports with particular
reference to their development programmes, financial resources and traffic forecasts.
Administration
Page 17 of 49
Ministry of Shipping,
Road Transport &
Highways
Department of
Economic Affairs
Planning Commission
Department of Shipping
Individual Port Trusts
Tariff Authority for

major ports
Indian Ports
Association
Port Sector
Organisations
Indian Private Ports &

Terminals Association
Figure 1: Institutional Structure governing the administration of major ports
In addition, the major port sector includes autonomous bodies like that of Tariff
Authority for The Major Ports (TAMP) established in 1997 during the introduction of
private sector participation. This was to prevent the tariff which would be vulnerable
to market monopolies and predatory pricing from the private sector and establish a
critical regulatory element to maintain a uniform standard across both the private and
public entities. Thereby the policy of 1996 laid the guidelines for the establishment of
Tariff Authority for Major Ports (TAMP) to fix and revise port tariffs in order to ensure
that there was no unfair competition between private sector players and the ports.
4.2.1 Port Sector Organisations

The Indian Port sector has two representative Organisations namely the Indian
Ports association (IPA) and the Indian Private Ports & Terminals Association(IPPTA)
4.2.1.1 Indian Ports association (IPA)
The Indian Port Association (IPA) was constituted in 1966 under Societies
Registration Act with the idea of encouraging growth and development in all of the
major ports which are under the supervisory control of the ministry of shipping. IPA3
acts as a consultant and is considered as a think tank for all Indian Major Ports and
for the ministry of shipping on various projects. The IPA deals with all technical,
3
IPA - Indian Ports Association
Page 18 of 49
economic, administrative and labour issues in the major ports. It also provides
technical and logistical support to the ministry for policy related issues that include
drafting new legislation and regulation for ports. IPA also carries out analysis of Port
Performance Indicators, Equipment Utilisation and other Parameters and also
Maintaining the Physical and financial Progress of Various port development projects.
Coordinates between the government and the ports in formulation of five-year plans
for the port sector and also help in preparation of annual plans
In addition to the above function, IPA maintains an enormous data bank related to
shipping and Port activities(Indian Port Association, 2016) .IPA is currently the liaison
agency of the government in the establishment of a Centralised web based port
community system (PCS) covering all the major ports and minor ports alike.
4.2.1.2 Indian Private Ports & Terminals Association(IPPTA)
The Indian Private Ports and terminals Association is a forum of private ports and
terminals operators that operate to define joint strategies for removal of difficulties and
other obstacles in the way of their efficient functioning. It achieves all these objectives
by working in liaison with other central and state government agencies. Though
formed in 2003, IPPTA has been active quite recent years with growing share of cargo
traffic at their terminals and ports which are expected to overtake the other 13 major
ports owned by the government of India in combined cargo throughput.
IPPTA address most of the concerns of private operators regarding tariff regulation,
bidding process limitations and allowance of royalty by actively working with the
government organisation regarding these issues.
4.2.2 Policy Initiatives for major ports

The Department of shipping identifies that a comprehensive policy package is needed
to address the various problems facing ports sector , the infrastructure of these ports
needed to be changed drastically to cater to the enormous growing requirements of
the countrys overseas trade, the growth in seaborne trade requires huge capital
investments in the port sector which have been traditionally done through the state
with its long gestation periods and uncertain returns is no longer viable .Hence a
requirement of private investment is highly needed (Ministry of Shipping, 2016). The
ministry of shipping has come up with various policies for the major ports namely the
National Maritime Development plan and the Model Concession Agreement to
encourage private sector participation to boost the development in the major ports.
Page 19 of 49
4.2.2.1 National Maritime Development Programme(NMDP)

National Maritime Development Programme (NMDP), is a strategic port plan
developed by the Ministry of Shipping, Road Transport and Highways for the major
ports in order to facilitate private investments, improve service quality and promote
competitiveness. It outlines various port capacity improvements and hinterland
connectivity projects across the 13 major ports over a ten-year time frame. As a part
of the NMDP, the ministry has mandated that each of the 13 major ports should
develop a business plan that
States a long-term vision for the port that builds on its core strengths
Establishes the goals to be achieved over the next seven years to satisfy this
vision
Describes the strategy to be followed to achieve these goals
Provides a detailed plan of action to implement the strategy and
Identifies sources of financing for all proposed investments.
The business plan also calls for an annual planning process in order to be able to
adapt periodically to the changing market conditions. Through NMDP an investment
has been envisaged by both the government and the private sector with the majority
of the investment from the private sector. As the programme is implemented through
PPPs, public investments are primarily for common user infrastructure facilities like
deepening and maintenance of port channels, construction of breakwaters, hinterland
connectivity etc while the private investments are allowed in areas of commercial
operations(De, 2009). Further, changes in customs procedures are also 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 decisionmaking and implementation. At the same time, several measures to simplify and
streamline procedure related to security and customs are being initiated.(Department
of Economic Affairs, 2009)
4.2.2.2 Model Concession Agreement (MCA)
Introduced in 2008 when the port sector in India had been witnessing significant
interest from both domestic as well as foreign investors following policy initiatives for
private sector participation. However, the actual inflow of investments was less than
that was expected and hence to safeguard future prospects the adoption of a
comprehensive policy was required. As a result, the model concession agreement
was developed which laid out a precise policy and regulatory framework for building
and operating terminals on DBFOT basis. Though the MCA provides a framework for
Page 20 of 49
PPPs in Building new port terminals at existing ports with some modifications it can
be used for transfer of port terminals from the government to private entities and also
build new ports on DBFOT basis. Under this, the port trust is entitled to approach the
inter-ministerial public-private partnership appraisal committee for final project
approval thereby speeding up the process of inviting bids for new projects.
4.2.2.3 Sagarmala Project
The project has been launched with an objective of modernising the ports along
Indias Coastline and achieving rapid expansion of port capacity and development in
land and coastal navigation. The initiative aims at supporting port led development
through appropriate policy and institutional interventions, port infrastructure
enhancement including modernisation and setting up of new ports and efficient
evacuation to and from hinterland. The work under the project will be done in close
coordination with Maritime States/ UT governments.
4.3 Minor Ports

The Minor Ports Sector include approximately 187 Ports located across thirteen
maritime states or Union Territories. Whereas the minor ports are under the
jurisdiction of the governments of the corresponding maritime state namely
Maharashtra, Gujarat, Goa, Daman and Diu, Karnataka, Kerala, Lakshwadeep,
Tamilnadu, Pondicherry, Andhra Pradesh, Orissa, West Bengal and Andaman &
Nicobar. The responsibility for the development of non-major ports vests with the
concerned government. The Central government interferes with neither the
administration nor the development of policies of these ports which are governed
wholly by the individual states. No Permission is required from the central government
to establish a minor port they are placed in the concurrent list of the constitution and
are governed by the Indian ports act.
Traditionally the minor ports are regulated by the concerned shipping ministry of the
state or a dedicated department for the ports. The ports under the individual state
governments are not regulated by policies developed for major ports by the central
government but rather each state develops its own policy for their regional ports. The
State of Gujarat has been the frontrunner when it comes to maritime policies for the
state it was the first state to divulge the administration of the states ports to a
dedicated maritime board by 1981 from then various maritime states have established
their own maritime boards to control the minor ports in their region. These Maritime
Boards are responsible for the formulation of waterfront development policies and
Page 21 of 49
plans, regulating and oversight of the minor ports, attracting private investments in
the development of such ports, enforcing environmental protection standards, etc.
Though not all the states have followed suit with the establishment of a maritime board
Tamil Nadu, Maharashtra has quickly followed suit with that of Gujarat to encourage
private sector participation and to simplify the administration of the ports reducing the
burden on the concerned state government.
Table 5 shows that still a few of the regional states have the concerned ministry taking
care of port regulation and administration like West Bengal, Pondicherry, Orissa
whereas in the state of Kerala , The Kerala State Maritime Development Corporation
Limited which governs all the minor ports of Kerala is a fully government owned
company (Kerala State Maritime Development Corporation Ltd, 2016). Though the
establishment of maritime boards is proactively encouraged both by the government
and other autonomous organisations. Still few states like west Bengal are reluctant in
adapting to such an administration in view of private sector takeover.
States and
No of
Union Territories
Ports
S.No
Regulatory Authority
Regulatory body
Gujarat
40
Government of Gujarat
Maharashtra
53
Government of Maharashtra
Maharashtra Maritime Board
Goa
Government of Goa
Captain of Ports Department
Karnataka
10
Government of Karnataka
Karnataka Maritime Board
Kerala
13
Government of Kerala
Kerala State Maritime

Development Corporation
Limited
Diu & Daman
Union Territory of Daman &
Marine Department
Diu
7
Lakshadweep
10
Islands
Union Territory of
Department of Port
Lakshadweep
Pondicherry
Government of Pondicherry
Port Department
Tamil Nadu
15
Government of Tamil Nadu
Tamil Nadu Maritime Board
10
Andhra Pradesh
12
Government of Andhra
Department of Port
Pradesh
11
Orissa
Government of Orissa
Directorate of Ports and

Inland Water Transport
12
West Bengal
Government of West Bengal
Department of Ports
13
Andaman & Nicobar
23
Government of Andaman &
Port Management Board,
Nicobar Islands
Andaman & Nicobar Islands
Islands
Source: Collective Information from various governments
Table 5: List of all states with minor ports and their regulatory body & authority
Page 22 of 49
4.3.1 Gujarat Maritime Board

The Gujarat Maritime Board was established through Gujarat Maritime board act,
1981 for the purpose of commercialisation of Gujarat Ports. This was made available
by transferring the administration, ownership and regulation of the minor ports in
Gujarat to the maritime board. Unlike the autonomous port trusts developed through
the major ports trust act the Maritime board is devoid of interference from the state
government in its administration of the ports unless the board defaults on its
functioning. Thus the board has enough freedom over the administration, regulation
and reformation of the ports.(Government of Gujarat, 1981).The Strategy developed
by the Gujarat maritime board during its establishment was to build and operate the
ports under its own ambit. Develop the concepts for privatisation through PPPs for its
port based industries of which it has realised its benefits. The Boards Present and
future strategy involve the development of private ports and landlord ports in its
existing port network, Development of shipbuilding yards, Expansion of its greenfield
ports, Port-Based SEZ, Specialised Bunkering Facilities, Port Mechanisation. The
Gujarat Maritime board realised all of these strategies through many of its policy
initiatives namely Private sector participation policies, BOOT4 framework, Legal
Framework and roadmap for PPP5 projects, Model Concession agreement for the
development of private ports, development of shipbuilding yards and recycling yards
and private participation. The tariff regulation of maritime board provides enough
flexibility for private port operators with interference from the regulatory authority in
case of unfair and monopolistic behaviour.(Gujarat Maritime Board, 1997)
Table 6: Policy Initiatives by Gujarat Maritime Board
1987
Captive Jetty
Allows private companies to operate their own jetties in GMB Ports
1995
Port Policy
Allows public private participation in Gujarat Ports
1997
BOOT Policy
Provides operational flexibility with tariff freedom, low waterfront royalty
1999
GID Law
Gives legal framework & roadmap for PPP
2004
SEZ Act
Paves the way for provision of minor ports and related services in
Special Economic Zones in Gujarat developer to fix and collect Tariff
2008
Captive Jetty
Paves the way for expansion of existing captive jetties
Expansion
2010
Shipbuilding
Allows private companies to develop shipbuilding parks
Policy
2012
4
5
LNG Terminal
Facilitate setting up of new Greenfield LNG Terminals and Floating
Policy
Storage and Re-Gasification Units (FSRUs) in Gujarat
BOOT- Build Operate Own Transfer

PPP Public Private Partnership
Page 23 of 49
Government of Gujarat Ports and

Transportation Department

(GMB)
Ports
GMB
Operated
Ports
Private Ports
Port Activities
Shipbuilding &
Repairs
Ship-recycling
Yard
PPP
Ports/Jetties
Captive Jetties
Private Jetties
Joint Sector
Ports /
Terminals
Figure 2:Institutional Structure governing the Administration of Gujarat Ports
The Gujarat Maritime board has established various privatisation models through
these policy initiatives for Captive Jetties (Build Operate Maintain Transfer), Private
Ports (Build Own Operate Transfer), Private Jetties (Build Operate Transfer), Rail
Linkages, Shipbuilding and repair yards, Private participation in support services. The
Maritime board after its port policy on PPPs successfully attracted private investments
in the green field projects for the first time in India (Swaminathan, Academic
Foundation (New Delhi and Observer Research Foundation., 2008).
Table 7: Project Structures for Privatisation under GMB Port Policy
Privatisation Model
BOMT
BOT
BOOT
Incentives
(Captive Jetties)
(Private Jetties)
(Greenfield Ports)
Tariff Setting
No (Concession in
No (Concession in
Full
Freedom
Wharfage)
port Charges)
Operational
Full
Full
Full
25+yrs
5 25 years
30yrs (Extendable)
Freedom
Period
Source: Gujarat Maritime Board
Page 24 of 49
Tariff Structure and Regulation is much transparent and flexible for private operators
under the ambit of GMB the port policy provides freedom for private ports to fix their
own tariff except for waterfront royalty (WFR). Furthermore, the Indian ports act
provides ceiling rates for all port charges. WFR is the only charge payable by the
developer of a private port to the government of Gujarat is calculated at a
concessional rate till the approved capital cost for the development of the private port
is recovered after which the WFR is paid at full tariffs. As far as the captive jetties are
concerned, rebates are given in Wharfage charges till their capital is recovered .Also,
Captive jetty operators are subjected to lower Wharfage charges .(Comptroller and
auditor general of India, 2014)
Table 8 : Tariff Structure of Gujarat Maritime Board
S.No
Type of
charges
Legislation
Levied by
Main income head
Remarks
Board Charges under the provisions of Indian Ports Act, 1908

1) Port dues
1
Board charges
(BC)
Indian Ports
Act
Gujarat Maritime
Board
2) Pilotage charges
3) Towages
Levied for entry into

the port and specific
service / assistance for
safe berthing
State and Board Charges under the provisions of GMB Act, 1981
1) Wharfage charges
2) Water front royalty
2
State charges
(SC)
GMB Act
Gujarat Maritime
Board on behalf
of the GoG
3) Lighterage levy
4) Other license fees
Mainly cargo and

permission related
charges
5) Water front fees

1) Berth hire charges
2) Mooring fees
3
Board charges
(BC)
GMB Act
Gujarat Maritime
Board
3) Anchorage dues
4) Permit fees
Mainly vessel and

service related
charges
5) Rent
5 Findings
5.1 Port Governance
The Contrast between the port policies may be analysed in terms on the national,
regional or local control (R O Goss, 1990) this holds true to the situation in India . In
terms of Institutional structure, the Indian ports can be classified as central and locally
controlled resulting in a greater degree of devolution in public decision making in port
operations, management and policy. As a result, there is a mixture of port policies
Page 25 of 49
from both the administrations to the end that a number of frameworks exist within the
same country. In terms of ownership, traditionally the ports controlled by both the
administration have been public mostly of service port model with the central
government following the trust port model for its ports.
However, the need for private sector participation to promote port development has
resulted in landlord port model being adopted by both the central and local
administration. This is has led to different policies adopted by both these
administrations to encourage private sector participation. While the central
government has encouraged private sector involvement through PPPs, the regional
administrations have come up with various models ranging from BOOT to BOT
Currently, the major ports in India follow a hybrid format of the service port model and
the landlord model which has resulted in a conflict of interest between the port trusts
and the private sector. Private sector participation has been encouraged through
PPPs for leasing out existing assets of the port, construction of additional assets
(terminals, berths, CFS, handling equipment), leasing of port handling equipment
pilotage and captive facilities for port-based industries. Unlike a Landlord model
where the infrastructure is leased out to the private sector who owns and operates
the superstructure. The model followed by the major ports results in a situation where
both the port trust and the private sector compete for similar services within the same
port leading to intra-port competition which is mostly advantageous to port trust.
Whereas the minor ports have followed a landlord model by encouraging private
sector participation through BOT and BOOT models (as in the case of GMB). As a
result, existing ports facilities were leased out for private sector involvement, and new
ports were developed through BOOT models giving enough autonomy for the private
operators while GMB acts as a landlord with its powers limited to that of a regulatory
board. Privatisation is encouraged in the infrastructure of existing GMB ports,
modernisation of equipment, construction of new infrastructure (Including greenfield
projects), construction of captive jetties and other services (Lighterage, dredging,
piloting and other essential utility services).
Page 26 of 49
5.2 Performance of the Port Policies: A Comparative Study

5.2.1 Port Throughput
Analysing the development of major and minor ports in India through their
corresponding growth in port throughput. Its quite evident from Figure 3 that the share
of port throughput of minor ports has been steadily increasing over the years. A
remarkable development across the minor ports sector as of 2016 around 44.7% of
the countrys traffic is being handled through them. The increased share of the minor
ports can be solely attributed to the role of the maritime boards established by
individual states which brought the much necessary regulatory framework and
policies required for the sector. Out of the 44.7% of cargo handled by the minor ports
more than 72% of the cargo traffic originates from the minor ports of Gujarat. This can
be attributed to the states port policy for PPPs which was developed by the Gujarat
maritime board. As a result, this offered greater flexibility in decision making and the
commitment of the state governments to PPPs. Altogether the process of privatisation
has reached quite an advanced stage here. (Haralambides and Behrens, 2000).
The Minor ports of Gujarat that contribute to 72% of the total traffic of major ports
contribute much of this growth to the throughput obtained mainly from privatised ports
and private jetties. Sikka Port handled the highest cargo tonnage of 124.38 million
tonnes in 2014-15. This port accounted for 37% of the total cargo handled by the nonmajor ports in Gujarat in 2014-15 and has witnessed an increase in the cargo traffic
ever since the commissioning of Reliance Jamnagar maritime terminal facility. The
Gujarat maritime board has currently 4 private ports under operation and 4 more
under development all of these being green field projects developed through PPP
models established by the ports policy. The four ports under operation include Mundra
(Adani ports & SEZ Limited) Indias largest private port handled 105.86 million tonnes
around 31.4% of Gujarats port Throughput in 2014-15 and Pipavav port, the first
private port in the country which was developed by APM terminals under the
BOOT 6Policy of GMB7. The Private ports of Gujarat alone have shown a CAGR of
32.8 over the decade which in itself is an indicator of the success of the BOOT port
policies adopted by the GMB. Through the Privatisation model, promotion and
development of greenfield ports and private jetties have seen a surge of private
investments this can be attributed to various incentives provided by the maritime
Board that includes complete project feasibility study, land acquisition provided by
6
7
BOOT Build, Own, Operate and Transfer

GMB Gujarat Maritime Board
Page 27 of 49
GMB, Freedom for setting tariff, approval of subcontracts for services and complete
operational freedom under its privatisation policy.
1200.00
93.23%
6.77%
92.96%
7.04%
92.23%
7.77%
91.41%
8.59%
89.79%
10.21%
89.91%
10.09%
90.11%
9.89%
87.66%
12.34%
86.87%
13.13%
81.10%
18.90%
76.28%
23.72%
75.07%
24.93%
74.33%
25.67%
74.32%
25.68%
73.70%
26.30%
74.24%
25.76%
71.49%
28.51%
71.56%
28.44%
71.34%
28.66%
66.01%
33.99%
64.38%
35.62%
61.29%
38.71%
58.46%
41.54%
57.12%
42.88%
55.25%
44.75%
58.17%
44.71%
800.00
600.00
400.00
Traffic In Million Tonnes
1000.00
200.00
Major Port
Minor Ports
GMB Ports
2015-16
2014-15
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
1990-91
0.00
Total
Source: Indian Port stastics 2014 -2015 , Current port stastics 2016 , ppp in india report
Figure 3:Share of Major and Minor ports in total port throughput from 1990 to 2015
In Contrast, from Figure 3 it is quite evident that growth of the major ports has been
much lower compared to that of the minor ports over the period of time. The slower
growth in the main ports can be attributed to insufficient port development in these
ports due to lack of sufficient investments from the public sector and the private sector
alike.
Port / Year
Major
2012-13
2013-14
2014-15
-2.56
1.77
4.65
Non Major
9.66
7.49
12.93
All Ports
2.17
4.15
8.20
Table 9 : Growth in Cargo Traffic at Indian Ports
Table 9 Identifies that the growth rate of major ports across 2012 -2015 which is much
lower compared to the higher growth rate in the minor ports. It will be right to point out
that the increase in cargo traffic overall is being absorbed by the minor ports whereas
major ports have been showing less growth comparatively. This growth can be
Page 28 of 49
contributed to the establishment of a number of public-private partnerships over the

last few years.
5.2.2 Average Turn Around Time and Capacity Utilisation:

The capacity utilisation of major ports during the period of 2004 to 2015 is outlined in
the Figure 1. Though the capacity utilisation of the major ports has been very high
(around 90%) during 2009 after which there is a gradual decline of the utilisation rate
similarly the average turnaround time of the vessels have decreased considerably.
1000.00
120.00%
900.00
100.00%
800.00
700.00
80.00%
600.00
500.00
60.00%
400.00
40.00%
300.00
200.00
20.00%
100.00
0.00
0.00%
Traffic
Capacity
Utilisation
Figure 4: Average Capacity Utilisation of Major Ports
Though Figure 4 shows a decline in average utilisation rate of less than 70% for major
ports this has not successfully translated into the required lower turnaround times to
that of international standards as majority of the cargo traffic are still being handled
by few ports namely Kandla, Jawaharlal Nehru, Chennai, Mumbai, Paradip whose
capacity utilisation is still at a higher rate which inturn affects the turn around time at
hese ports. During 2014 2015, In terms of the individual commodity the utilisation
rates are very high in the major ports except for Iron ore indicating that the capacity
has not kept in pace with the cargo traffic.
Commodity
POL
Iron Ore
Thermal Coal
Fertilizer
Other Cargo
Container
Total
Capacity (MT)
305.74
72
74.56
11.3
251.26
156.66
871.52
Utilization (%)
54.51
22.54
158.74
145.13
57.41
76.24
66.7
Page 29 of 49
In terms of Container Traffic, the share of JNPT (47.7%), Chennai (CHPT) (19.5%)
and Chidambaranar (TPT) (7.0%) amounts to 75% of the countrys total share of
container traffic but the ports have been burdened with very high utilisation rates
Port
JNPT
ChPT
TPT
KDS
CPT
Capacity (MT)
71.97
42.5
9.86
12.5
VPT
2.68
Utilisation (%)
95.72
70.54
220.68
82.25
41.97
163.13
One of the main reasons for major ports reeling under such high utilisation levels is
the extremely slow pace of capacity addition in spite of a clear trend in the increase
in cargo throughput through these ports. With the declining share of major ports in the
total cargo throughput, Port Planning through addition of capacity and the
management of existing capacity needs to keep pace to regain the lost share of these
major ports. The average turnaround time of the major ports though have showed
quite a development still are quite high enough compared to international standards
among the major ports Chennai boasts of the lowest turnaround times at 1.8 days for
a container ship.
500
90.00%
450
80.00%
400
70.00%
350
60.00%
300
50.00%
250
40.00%
200
30.00%
150
100
20.00%
50
10.00%
0.00%
Traffic
Capacity
Utilisation
Figure 5: Capacity Utilisation of Gujarat Maritime Board Ports
In contrast the minor ports headed by GMB have done a pretty good job of capacity
addition at the right time which is pretty evident from the utilisation rates of GMB ports
in Figure 5 ,a utilisation rate of just below 80% has been maintained through the last
five years. Addition of capacity in Gujarat minor ports has kept pace with the growing
traffic through various policy initiatives of the GMB. Table 15Error! Reference source
not found. Lists the addition of capacity in Gujarat minor ports through 1989 -2015
where in majority of the addition are from private sector in the form of captive jetties
Page 30 of 49
based on manufacturing industries and private ports. As a result of uniform capacity

addition Gujarat minor ports boasts one of the country lowest in average turnaround
time. Private Ports such as Mundra have shown a strong trend in capacity addition at
a CAGR of 29% from 2010 to 2015 resulting in lower utilisation levels and as a result
they boast of the countrys lowest average turnaround time of 0.6 days for
containerships.
Container
0.6
1.8
2.4
2.7
3.6
1.4
1.5
2.2
2.3
2.6
3.6
4.4
4.9
5.5
7.1
Bulk
MUMBAI
KANDLA
JNPT
VIZAG
MORMUGAO PARADIP
CHENNAI
MUNDRA
Figure 6 : Average Turnaround time of Mundra port in comparison with other major ports
5.2.3 Tariff Regulation & Competition

Pricing is one area of concern that has marred private investments in the major ports
sector. (Haralambides and Gujar, 2011) have identified that the government policies
that were introduced have restrained free competition to allow the public ports gain
market share. The Public sector port operators are allowed to charge fees which do
not cover the capital costs during their start up period which largely benefits the state
owned ports and gives them a dominant market position. The Tariff authority for major
ports acts on behalf of the shipping ministry for fixing tariffs for all major port trust and
the private operators alike the approach taken by the regulator is a cost based pricing
that differs for both the terminals operated by the port trust and the private operators.
For the port trust terminals, the price is calculated based on the annual revenue
requirement (ARR)8, a 16% return on capital employed and the forecasted traffic for
the period upon which the ceiling for scale of rates are set after the approval from
TAMP(Tariff Authority for Major Ports, Ministry of Shipping, 2005). The Scale of rates
8
Annual Revenue Requirement (ARR) which is the average of the sum of Actual Expenditure as per the final
Audited Accounts of the three years plus Return at 16% on Capital Employed including capital work-in-progress
Page 31 of 49
thus proposed by the major ports are subjected to achievement of performance

standards committed by major ports trust. Whereas for private terminal operators in
the terminal the same tariff structure is used while the Performance Linked tariff that
can be proposed is capped at 15% above the indexed reference tariff for the financial
year. The PPP Operator is also required to pay a revenue share at the rate he has
indicated in the concession agreement over the indexed reference tariff or the
performance linked tariff. The payment of revenue share is always fixed at the indexed
reference tariff or notified performance tariff irrespective of what the operator charges
in reality with growing inter-port competition.(Tariff Authority for Major Ports, Ministry
of Shipping, Government of India, 2013). Currently Tariffs are revised on a five-year
period by TAMP while adjustment for inflation in the service rates is fixed at 100% for
Port trust whereas 60% for the private terminals.
As Most of the PPPs awarded are on the basis of the highest revenue share proposed
private operators find it difficult to cope up with this policy of TAMP for the terminals
of ports trusts and terminal ports alike as they are unable to get a return on the capital
invested. Though a marginal cost price approach has been followed by the TAMP for
better revenues the inability of it to recover capital costs in full makes it suitable only
for public service models while the application of the same to PPP models creates
additional problems. TAMP which was formulated by the shipping ministry to regulate
the port sector to prevent monopolies by itself is not an experienced body as a result
there are different tariff structures which have been revised over the period of time
(1998, 2005, 2008 and 2013) since its inception resulting in multiple business
frameworks for similar nature of the projects causing concerns for developers.
Although from the purview of the government the TAMP in regulating tariff is to avoid
monopolies and encourage competition over the period of time this has had a negative
effect on the competitiveness of the major ports leading to a fair share of the traffic
now being handled by the minor ports which are not under the purview of the TAMP.
Competition in major ports sector still remains an area of concern. Though
privatisation was brought about in major ports to foster intra-port competition nothing
much has happened partly due to high utilisation of these ports and the availability of
cargo. Ports like that of JNPT where two private terminal operators function the
competition between them for the cargo is next to negligent as both these operators
enjoy a fair share of cargo throughput with their high capacity utilisation the need for
attracting new cargo is thus limited too. The need for competition areas where intra
port competition would could have been encouraged where missed the privatisation
Page 32 of 49
of the container berths in Chennai (6 berths) was opened for bid as one rather
separately this resulted in one operator acquiring all of them thus effectively reducing
the prospects of intra port competition(Mehta et al., 2006). The tariff ceiling
established by the TAMP also prevents operators from providing more specialised
service to attract more traffic. The Current Institutional Structure of the major ports as
hybrid service ports there in being part landlords and service ports offering terminal
operations in line with private operators is rather discriminatory as there wont be an
equal footing for the private operator as the services has to include recovery costs of
the capital.
Under the BOOT Policy Laid out by the GMB, it provides a higher degree of flexibility
for setting the tariff and Royalty payments are given concessions to recover capital
costs in favour of the private developer. The Developer is given the complete flexibility
in setting and collecting all tariffs and the regulatory body acts on only representations
made to it in the case of monopolistic behaviour relating to tariffs. Waterfront Royalty
is charged on per tonne per type of the cargo through a transparent mechanism
wherein provision of value-added port services is excluded from royalty. Concession
are granted to the Royalty Payment until such a period till its deemed that the total
approved capital costs have been recovered.
5.2.4 Labour Productivity

Lack of Labour reforms is heralded as one of the main obstacles faced by Indian port
sector towards its development. The dock workers (Regulation of employment) act
1948 which provided for regulation of employment through establishment of dock
labour boards is of highly protective nature for the rights of the workers which in its
own accord had led to variety of malpractices such as speed money, over-manning,
low productivity, idle time, etc for
Though the following act the dock workers
(regulation of employment) (inapplicability to major ports) act, 1997 lead to the

dissolution of the dock labour boards but transferred the board's functions to be a part
of the board of the major ports trust act which resulted in the labour unions playing a
vital role in decision making of these board . The Indian port sector, in particular, the
major ports which is envisaging development through private investments, the
presence of strong labour unions representing the board of trustees in these ports
acts as a retarding factor for prospective bidders for private terminal operations. The
requirement for these private operators to function within the existing oversupply of
the workforce is both not fair and not economical from their standpoint.
Page 33 of 49
With respect to labour inefficiency, the difference in manning scales in the major ports
evolved through negotiations with labour unions decade ago and had remained the
same though there has been a paradigm shift from non-unitised cargo handling to the
current majority of unitised cargo which includes modern handling techniques and
lower manning scales. Additionally, the requirement for extensive manpower training
to enhance skills and managerial capabilities makes the current labour structure in
the main ports obsolete.
In terms of labour productivity, vessel turnaround time, container moves per hour and
average output per ship are still indigent in all of the major ports when compared to
international standards. In respect to liner services where labour productivity in terms
of container moves per hour is a major factor that decides the choice of port of call,
the countrys major container ports lack in terms of performance to that of many
international ports in the region. Table 10 shows the contrast in performance between
that of the major ports and the non-major ports in India along with that of other regional
mega ports.
Table 10 : Average turnaround time for container ships in India and other ports in the region
Container moves per hour
Port
2013-14
2014-15
Jawaharlal Nehru Port Trust (JNPT)
23
21.7
Chennai Port Trust (ChPT)
27
37
Chidambarnar Port Trust (TPT)
22
21
Kolkatta Dock System (KDS)
14.7
18.9
Cochin Port Trust (CPT)
42.2
23.4
Vishakhapatnam Port Trust (VPT)
24.3
16.6
48.6
Krishnapatnam Port
Adani Ports Ltd Mundra
40
Jebel Ali
77
Tianjin
70
6 Conclusion
The Current legislative framework for the major ports the Indian ports act,1908
and the major ports act,1963 have their roots from an era where central
economic planning was a widely accepted feature for developing countries.
Such a framework might not be feasible when the country is in another phase
of its socio-economic development. A right framework will be one with the
Page 34 of 49
modern insights in the functioning of a market-oriented economy, and a global

character of the maritime industry would encourage development and growth.
The countrys marine sector is intricately linked to its economic trade activity.
The demand for India's ports and trade infrastructure will continue to mount as
trade diversifies and grows, this makes a compelling case for the rapid and
efficient expansion of Indias port sector.
Though private sector participation has been seen as the way for port
development in India by both the central and state governments the attitude of
the private sector has been indifferent towards the respective governments
owing to their port policies. While the privatisation models of GMB such as
BOOT and BOT have been effective in garnering investments, this can be
attributed to the transparent process adopted by the GMB and minimal
intervention in terms of regulation whereas the major ports under the ministry
of shipping still faces reluctance from private investors which has been mainly
attributed to bureaucracy delays and regulation by ministry in areas of tariff.
The policy areas which were studied through these indicators have identified
that Gujarat maritime boards approach towards policies have been able to
keep up with the pace of growth of the port sector through capacity addition
via the private sector. The resulting private sector participation has led to the
improvement of port performance overall across all ports belonging to GMB.
Whereas the major ports governed by major ports, have been having a lot of
problems in terms of keeping up with the rapid growth of trade. Development
of these ports is burdened by the inability of the government to funnel in
enough capital, and failure to attract enough private sector participation has
led to ports with poor operational efficiency in terms of high capacity utilisation
rates, higher turnaround times and lower labour productivity. Regulation of
tariff and the complicated approach of the ministry in approving private sector
participation have been the root cause for most of these problems.
In order for the major ports to pave the way for development, port reforms in
the form of the deregulation of the government control over the ports need to
be undertaken. Regulation of tariffs which has been impending private sector
Page 35 of 49
participation must be removed to encourage market-oriented tariffs and

increased competition. Administration of the ports needs to be commercialised
with the public sector acting as a regulator away from the current mentality.
Word Count: 12500
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48(2), pp. 311325. doi: 10.1111/ejed.12014.
Page 39 of 49
8 Appendices
8.1 Figures and Charts
Cargo Traffic Handled By Minor Ports

Orissa West Bengal
0%
3%
Tamil Nadu
0%
Kerala
0%
Karnataka
0%
Others
1%
Andhra Pradesh
18%
Goa
0%
Gujarat
72%
Maharashtra
6%
Gujarat
Maharashtra
Goa
Karnataka
Kerala
Tamil Nadu
Andhra Pradesh
Orissa
West Bengal
Others
Figure 7 : Comparison of Cargo handled by minor ports
Total Cargo Handled in the year 2015-2016
Minor Ports
45%
Major Ports
55%
Figure 8 : Share of Cargo traffic for major and minor ports
Page 40 of 49
Kolkata
Haldia
Paradip
Ennore
Chennai
Visakhapatnam
Tuticorin
Cochin
N.Mangalore
Mormugoa
J.L.Nehru
Mumbai
Kandla
Average
200%
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Figure 9 : Trend in Capacity Utilisation of Major Ports 2004 - 2015
8.2 Tables:
Table 11 : Average Turn Round Time (days) of major ports through 1990 - 2015
Port
1990
-91
1995
-96
2000
-01
2005
-06
2006
-07
2007
-08
2008
-09
2009
-10
2010
-11
2011
-12
2012
-13
2013
-14
2014
-15
Major
Ports
8.1
7.7
4.24
3.63
3.81
3.98
4.2
4.63
5.29
4.56
4.29
3.84
3.89
Table 12 : Capacity Utilisation, share of traffic and turnaround time of all major ports
S.no
Name of ports
Capacity
Traffic
Share of traffic
Capacity
utilisation
Turnaround
time
Kolkata Ports of Trust
21.10
16.70
2.75%
79.10%
3.98
Haldia Dock Complex
65.89
33.50
5.52%
50.90%
3.27
Paradip Port Trust
126.94
76.40
12.60%
60.20%
4.50
107.75
57.00
9.40%
52.90%
3.84
Kamarajar Ports Limited
45.00
32.20
5.31%
71.60%
6.53
Chennai Port Trust
93.44
50.10
8.26%
53.60%
2.53
VOC-Chidambaranar Port Trust
59.26
36.80
6.07%
62.20%
3.73
Cochin Port Trust
49.66
22.10
3.64%
44.50%
2.18
77.77
35.60
5.87%
45.80%
2.63
Page 41 of 49
10
Mormugao Port Trust
48.79
20.80
3.43%
42.60%
3.65
11
Mumbai Port Trust
49.33
61.10
10.08%
123.90%
4.58
12
89.37
64.00
10.55%
71.60%
2.44
13
Kandla Port Trust
131.06
100.10
16.51%
76.30%
4.66
Table 13 : Share of cargo throughput of major ports 2008 - 2016

Ports
2009-10
Share
2010-11
Share
2011-12
Share
2012-13
Share
2013-14
Share
2014-15
Share
2015-16
Share
Kolkata
46423
8.27%
47545
8.34%
43248
7.72%
39928
7.32%
41386
7.45%
46293
7.96%
50195
8.28%
Kolkata DS
13045
2.32%
12540
2.20%
12233
2.18%
11844
2.17%
12875
2.32%
15283
2.63%
16688
2.75%
Haldia DC
33378
5.95%
35005
6.14%
31015
5.54%
28084
5.15%
28511
5.13%
31010
5.33%
33507
5.53%
Paradip
57011
10.16%
56038
9.83%
54254
9.68%
56552
10.36%
68003
12.24%
71011
12.21%
76386
12.60%
Vizag
65501
11.67%
68041
11.94%
67420
12.04%
59038
10.82%
58504
10.53%
58004
9.98%
57033
9.41%
Kamarajar
10703
1.91%
11009
1.93%
14956
2.67%
17885
3.28%
27337
4.92%
30251
5.20%
32206
5.31%
Chennai
61057
10.88%
61460
10.78%
55707
9.94%
53404
9.78%
51105
9.20%
52541
9.04%
50058
8.26%
Chidambaranar
23787
4.24%
25727
4.51%
28105
5.02%
28260
5.18%
28642
5.16%
32414
5.58%
36849
6.08%
Cochin
17429
3.11%
17873
3.14%
20090
3.59%
19845
3.64%
20886
3.76%
21595
3.71%
22099
3.64%
New Mangalore
35528
6.33%
31550
5.53%
32941
5.88%
37036
6.79%
39365
7.09%
36566
6.29%
35582
5.87%
Mormugao
48847
8.71%
50060
8.78%
39049
6.97%
17738
3.25%
11739
2.11%
14711
2.53%
20776
3.43%
Mumbai
54541
9.72%
54586
9.58%
56186
10.03%
58038
10.63%
59184
10.65%
61660
10.61%
61110
10.08%
JNPT
60763
10.83%
64317
11.28%
65730
11.73%
64488
11.81%
62333
11.22%
63801
10.97%
64027
10.56%
Kandla
79500
14.17%
81880
14.36%
82501
14.73%
93619
17.15%
87005
15.66%
92497
15.91%
100051
16.50%
All Ports
561090
570086
560187
545831
555489
581344
606372
Table 14 : Capacity Utilisation of major port during 2004 - 2015

Major Ports
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Kolkata
101.53%
85.71%
70.39%
72.09%
61.35%
82.08%
76.70%
71.35%
69.10%
75.09%
72.42%
Haldia
106.33%
100.33%
97.59%
93.34%
89.49%
71.48%
69.05%
61.10%
60.07%
57.31%
62.33%
77.18%
64.42%
68.79%
75.79%
65.37%
74.52%
73.25%
67.56%
55.28%
62.50%
59.27%
101.01%
101.55%
96.39%
105.64%
102.70%
105.19%
104.79%
101.64%
87.68%
65.79%
59.94%
Ennore
79.00%
70.46%
82.38%
88.92%
71.88%
66.88%
35.48%
179.71%
57.69%
88.19%
81.76%
Chennai
104.68%
96.82%
106.82%
107.12%
103.12%
85.61%
77.09%
17.98%
62.40%
59.40%
61.06%
Tuticorin
100.06%
83.41%
87.59%
103.52%
96.49%
100.30%
95.16%
84.28%
84.76%
68.09%
72.75%
90.97%
71.78%
75.73%
55.73%
54.60%
57.39%
43.61%
47.99%
44.44%
42.07%
43.50%
N.Mangalore
111.85%
90.66%
77.58%
82.80%
83.01%
80.38%
69.23%
64.63%
48.24%
50.62%
47.02%
Mormugoa
107.58%
107.42%
114.13%
106.29%
126.11%
131.85%
119.47%
93.20%
48.73%
32.03%
33.62%
J.L.Nehru
99.12%
104.82%
88.49%
102.76%
98.86%
94.94%
100.50%
102.70%
97.89%
94.61%
80.38%
Mumbai
82.03%
101.01%
99.92%
112.50%
104.39%
124.81%
122.59%
126.18%
130.33%
132.90%
138.47%
Kandla
92.33%
99.80%
85.18%
102.24%
92.54%
93.53%
94.21%
90.44%
100.43%
85.04%
76.18%
Average
96.54%
92.85%
89.85%
95.56%
90.57%
90.98%
85.07%
80.42%
73.28%
69.39%
66.70%
Paradip
Visakhapatnam
Cochin
Table 15 : Timeline of Capacity addition by GMB in Gujarat Minor Ports

Year
Development
1989
1991
1993
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2006
2007
Essar Captive Jetty Hazira

Reliance Captive facilities Hazira
Gujarat Ambuja Cement Mul Dwarka
IPCL Captive Jetty Dahej
L & T Pipavav & GACL Mul Dwarka
Pipavav & Mundra
Reliance port terminal Sikka
DHIL Birla Captive Jetty - Dahej
GCPTCL Port Terminal Dahej
Rail connectivity Mundra
Container Terminal Mundra
Petronet LNG Terminal Dahej
Augmentation of Pipavav Port
Expansion of Captive Jetty by Essar Group
Expansion of Mundra Port (T-2 bulk terminal and additional 2 container berth)
Establishment of 1 SPM at Sikka by Reliance Group
Page 42 of 49
Capacity
MMTPA
5
5
1
1
6
10
27
5
2
1.2 M.TEU
5
4
8
8
10
2007
2008
2008
2009
2010
2011
2012
2012
2013
2013
2013
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
Expansion of Pipavav Port

Establishment of 2 SPMs by Reliance Group at Sikka
SPM by BORL at Sikka
Establishment of Pipavav additional terminal and Dredging
Development of Coal Terminal for Ultra Mega Power Plant at Mundra Port
Establishment of SPM at Bhogat by Cairn Energy
Solid Cargo Port Terminal SCPT at Dahej
Second SBM and Crude Oil Terminal COT at Mundra
Terminal III under South Port at Mundra
Bulk General cargo terminal at Hazira
Expansion of LNG handling facilities at Dahej
Development of Mundra Port
Hazira Port Pvt. Ltd (HPPL)
Development of Solid Cargo Port Terminal
Captive jetty by Cairn Energy India Pvt. Ltd. Bhogat Dist. Jamnagar
Captive Jetty by JP Associates Limited Jakhau Port
Captive Jetty by Essar Salaya Bulk Terminal Limited.
Captive Jetty by ABG Cement Ltd
Captive Jetty by M/s. Essar Bulk Terminal Ltd. -1100m (3rd Expansion)
Captive Jetty by M/s Ultra Tech Cement Ltd- Expansion of Captive jetty at
Kovaya
Captive Jetty by M/s Godrej Ro Ro jetty for handling of ODC cargo at Dahej
SEZ
Captive Jetty by M/s ISGEC Ro Ro jetty for handling of ODC cargo at Dahej
SEZ
Page 43 of 49
5
25
12
9
15
7
8
9
8
5
2.5
160
2.5
15
7
3
7
2
25
5
1
1

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School of Engineering and Mathematical Sciences

Performance of Indian Port Policies:

A dissertation submitted in partial fulfilment of the requirements for

MSc in Maritime Operations and Management

4.2.2 Policy Initiatives for major ports ......................................................................................... 19

4.3 MINOR PORTS ................................................................................................................................ 21

5.2 PERFORMANCE OF THE PORT POLICIES: A COMPARATIVE STUDY .............................................................. 27

Build Own Operate Transfer

Build Operate and Transfer

Build Operate Maintain Transfer

Chennai Port Trust

Design, Build, Finance, Operate, Transfer

Dock Labour Board

Gujarat Adani Ports Ltd

Gujarat Maritime Board

Gujarat Pipavav Port Ltd

Haldia Dock Complex

Jawaharlal Nehru Port Trust

Kolkata Dock System

Kolkata Port Trust

Kandla Port Trust

Mumbai Port Trust

Mormugao Port Trust

New Mangalore Port Trust

Nhava Sheva International Container Terminal

Organisation for Economic Co-operation and Development

Public Private Partnership

Tariff Authority for Major Ports

Visakhapatnam Port Trust

& regulatory framework. Furthermore the uncertainty in the container movements in

1.2 Research Focus and Aim

OECD - The Organisation for Economic Co-operation and Development

2.1 Port Governance

In ports either controlled centrally or by local administration the decision making in

2.2 Port Policies

2.2.1 Institutional and Ownership Structure

2.2.2 Planning and Development

2.2.3 Economic and Market Regulation

2.2.4 Labour arrangements

2.3 Indicators to Assess the Performance of Port Policies

2.3.1 Port Throughput

2.3.2 Capacity Utilisation and Turnaround time

Terminal Facilities, Tariffs, Port Congestion, Service Level, Connectivity

Location Factor, Operational Factor, Fiscal Factor and Manpower Factor

Calling Frequencies, Tariffs, Accessibility, Port Congestion, Hinterland

Service Level, Capacity, Port Operation Policy

Port Detention, Port Accessibility,Calling Frequency and Port Size

Port Service Quality, Port Productivity and Price Competition

(Tongzon et al., 2005)

Port (Terminal) Operation Efficiency Level, Port Cargo Handling Charges,

2.3.5 Labour productivity

Long term strategic port planning

Modernisation of port terminals

Growth port throughput TEUs

Development of new port functions

Market Access and

Average Turnaround time

Port Pricing Strategies

Average Turnaround time

3.2 Data Collection

Association, Director general of commercial intelligence and statistics, ministry of

4 Port Governance and Corresponding Port Policies in India

4.1 Major Ports