Wednesday, February 29, 2012

Development of TN ports key to overseas investment: study




Chennai:

The port sector, including the major and minor ports, in Tamil Nadu needs holistic development to boost the confidence of the domestic industry and enhance their competitiveness and make the state a preferred investment destination for domestic and overseas investors. 

The ports may develop capacities, but the problem that has to be addressed will be in the inadequate support infrastructure like road and rail connectivity.

According to a study by the Confederation of Indian Industry (CII), with the support of Deloitte, “by 2020, Tamil Nadu region is envisaged to have a capacity to handle around 333 million tonnes of cargo. The likely traffic to be handled would be around 284 Million tonnes, in comparison with the 98 million tonnes handled by the three major ports, Chennai, Ennore and Tuticorin and 1.6 million tonnes by the minor ports administered by the Tamil Nadu Maritime Board in 2010-11.

Chennai and Tuticorin ports together handled two million TEUs of container traffic, which accounts for a share of around 22 per cent of the overall container traffic in India.   It is projected that the Tamil Nadu region ports, including Puducherry and Karaikal Ports, are likely to handle more than 7 million TEUs by  2020. 

As projected in the `Maritime Agenda 2020’, the corresponding capacity in the region would be more than 11 million TEUs by that time.

N K Ranganath, Chairman, CII Tamil Nadu, said there were several hurdles in reaching this ambitious but possible bulk and container cargo handling traffic in the next eight years. The study highlighting the bottlenecks has made both short-term and long-term measures to break them and called for policy and budgetary interventions, active role for the private sector and manpower development, he said.

Ranganath said, according to the CII study, the major bottlenecks were --  Inadequate back-up and storage transit space provided to the two container terminals, inadequate road facilities to handle the load  equal to the port handling capacity, non-availability of sufficient entry gates and the delay in implementation of connecting roads to the port  and the by-pass road to Ennore-side’’.

The road capacity in Chennai  “can at best support a traffic of not more than 1-1.2 million TEUs a year whereas the terminal capacity is significantly higher than this volume leading to the current problem of severe congestion at the port’’, the study has pointed out.

Among the short-term recommendations are --  Increase the number of gates at the Chennai Port,  move containers to Inland Container Depots (ICDs) by train, expedite the Sriperumbudur dry port project  and speed up the  two projects of widening of the Ennore-Manali highway and the elevated road corridor from Chennai port to Maduravoyal.

As long-term measures the study has recommended-- to create more dry ports outside Chennai, similar to the one proposed in Sriperumbudur, increase the operations through ICDs by providing better rail connectivity, expedite the proposed container related developments (new terminals and infrastructure) in the region with adequate Customs support, and explore the possibility of moving export/ import containers in batches using barges from non-major ports to the two terminals at Chennai port.

The recommendations for policy and regulatory interventions at the Central level include more clarity on the proposed policy and regulatory outlook including the future of TAMP (given MPRA), flexibility of setting independent tariffs (for non-major ports) etc.

The State-level policy interventions include identifying measures to promote coastal shipping, laying down clear guidelines for converting captive port facilities into commercial ones and suitably refining the current Tamil Nadu Minor Port Policy to make it more attractive from the private sector’s perspective. It is also recommended that other industrial development policies (like the TN Industrial policy, TN SEZ policy) should be synergized and aligned with the port-sector policy.

Budgetary interventions are mainly for maintenance and  development of port infrastructure facilities and road and rail  connectivity.

The study says that private sector participation in the port sector would be critical to increase capacities in order to meet the growing traffic and has called for a framework for private sector participation in the State for port-sector needs.

For Manpower development it is suggested that the Tamil Nadu Maritime Academy should closely coordinate with the Indian Maritime University to explore synergies. Further, the scope of such institutions could also be widened to extend support to TNMB and the Port Trusts in their undertaking of key activities.

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