Non-major ports such as Karaikal and Krishnapatnam, that come under the purview of the State governments, handled over one-third of the country's total maritime freight traffic during 2010-11. However, there was a sharp decline in the growth rate during the year, compared to the previous year.
The growth in cargo handled by non-major ports in 2010-11 was at 8.8 per cent, against a record 35.7 per cent increase in 2009-10 over the previous year. The sharp deceleration in overall growth in India's seaborne cargo traffic in 2010-11 reflected the trends in the economy.
According to Mr K. Ravichandran, Senior Vice-President, ICRA, “the slowdown in non-major ports' growth in 2010-11 can be primarily attributed to the high base effect as growth was very high in the previous fiscal.
That apart, the outlook for cargo growth remains favourable in the near to medium term, which is not expected to be negatively impacted by global slowdown fears, as many of them are focused on domestic commodities such as coal, crude oil and fertilisers. Although container trade might be impacted if the Eurozone crisis were to escalate, overall it should end with healthy growth.
As regards major ports, uncertainty on iron ore exports due to various regulatory issues is a concern; this could mute their cargo growth. Besides, this fiscal should see lower fertiliser raw materials and finished fertilisers because of certain industry-specific reasons,” he said.
Growing importance
Says Mr Shashank Kulkarni, Secretary-General of the Indian Private Ports & Terminals Association, which represents the private ports, the y-o-y cargo growth at major ports during 2010-11 was a mere 1.6 per cent, compared with the previous years' levels, which averaged 8-10 per cent. Even 2009-10 recorded a 6 per cent increase over 2008-09. The trend is, therefore, more or less likely to get reflected at the non-major ports as well.
The really operational non-major ports are a handful. While AMCT/MICT and GPPL primarily handle containers, the ports in South India — Karaikal and Krishnapatnam — are bulk-oriented and have just commenced container operations as well. Container traffic is expected to grow, as predicted, but the bulk traffic, especially coal and iron ore, has taken a hit — coal (imports) because of floods in the supplying nations and iron ore (exports) because of the new restrictive policy.
During 2010-11, the country's eleven major ports, which come under the purview of the Centre, along with non-major ports, handled a total cargo throughput of 884.6 million tonnes. This is a modest increase of 4 per cent over 2010-11, compared to the robust growth spurt of 14.3 per cent in 2009-10, says an update on the port sector compiled by the Shipping Ministry's research wing.
A glimpse of the commodity profile of the cargo handled reflects that Gujarat accounted for about three-fourths (73.4 per cent) of the total traffic handled by the non-major ports, followed by Andhra Pradesh (13.5 per cent), Maharashtra (4.7 per cent) and Goa (4.6 per cent).
Four maritime States — Gujarat, Andhra Pradesh, Goa and Maharashtra — together accounted for 96 per cent of the total cargo traffic handled by the non-major ports in 2010-11.
Maritime agenda
Despite the dip in growth rate, the future could still be bright for the non-major ports, given that the Maritime Agenda 2010-20 has set a target of 3,130 MT port capacity for 2020. Over 50 per cent of this capacity is to be created in the non-major ports, which are expected to play a key role by the year 2020. The traffic handled by these non-major ports is expected to increase to 1,280 MT.
The total proposed investment in Major and Non-Major Ports by 2020 is expected to be around Rs 2,96,000 crore, with most of this investment coming from the private sector.
The States have also identified projects for development of non-major ports at an estimated cost of Rs 1,67,931 crore that would enable the creation of additional capacity of 1,294 MT. It is envisaged that the private sector will fund most of the projects Research predicts that that private sector will meet 96.1 per cent of the cost of development, amounting to Rs 1,61,333 crore. The remaining requirement of Rs 3,678 crore is planned to be contributed by the State Governments.
High growth
A report by ICRA says cargo volumes in India are expected to breach the 1-billion-tonne mark in the current fiscal (2011-12); the 2-billion-tonne mark by 2016-17 (seven-year CAGR of 13 per cent); and touch 2.4 billion tonnes by 2019-20 (10-year CAGR of 11 per cent). Growth at the non-major ports is expected to outpace that at the major ports, with the former commanding a 51 per cent share of the total cargo in a decade's time.
By composition, coal (expected 10-year CAGR of 18 per cent) and containers (expected 10-year CAGR of 15 per cent) are expected to drive much of the growth. Thus, port ventures with a higher exposure to these cargo categories are favourably placed.
Supply-side constraints persist with progress being tardy on proposed developments at major and non-major ports: On the supply side, the port sector has seen certain major milestones being reached in the recent past, including commissioning of the first phase of operations at the International Container Transhipment Terminal, Vallarpadam; solid cargo port terminal, Dahej; coal terminal, Mundra; bulk terminal, Hazira, and a greenfield port at Dhamra.