In India, the ports capacity augmentation and administration is governed both at the federal and at the state level. The federal government through Ministry of Shipping controls 13 major ports while state governments of 8 coastal states oversee the development of respective minor ports.
Extraordinary Growth Rate
We have examined the traffic volume statistics of last 20 years (refer the following table). Over the last two decades, state ports traffic has grown at a CAGR of 19.4%, almost triple the growth rate of major ports. In FY08 major and minor ports traffic stood at 519.2 million tonnes and 203.6 million tonnes respectively. We expect that minor port traffic will overtake major ports volume in another 8-10 years due to their higher growth rates.
Similar growth pattern is seen in telecom sector, where the compounded growth rate in the mobile phones in last 10 years is nearly 67%, much higher than that of landline phones (~6%). Today, as much as 89% of phone users use mobile phones.
Traffic Handled at Indian Ports (million tonnes)
In near future, with the setting up of numerous coastal power plant projects, increasing coastal refinery capacity and several upcoming Greenfield multi-user port projects, minor ports traffic volume is expected to grow significantly. Therefore, it will become more and more imperative to develop integrated port policy/regulations to monitor the development of state ports in order to streamline coastal development, competition, excessive capacity build-up issues etc. The new policy should also take into account the industrial development in the coastal region.
Minor ports due to relaxed regulations, reduced clearance hurdles coupled with returns from SEZs real-estate development and minimal sharing of revenues have made these projects considerably profitable. Historically, the returns witnessed by private parties in the minor ports are significantly higher than the major ports (through the PPP mode). Mundra Port is a grand testimony to this fact.
Minor ports due to relaxed regulations, reduced clearance hurdles coupled with returns from SEZs real-estate development and minimal sharing of revenues have made these projects considerably profitable. Historically, the returns witnessed by private parties in the minor ports are significantly higher than the major ports (through the PPP mode). Mundra Port is a grand testimony to this fact.
Business Opportunities
In the foreseeable future, minor ports are expected to present numerous business opportunities and infrastructure developers and investors may find these ports much more attractive with greater upside than major ports.
We, at i-maritime, firmly believe that minor ports would be the drivers of port capacity expansion in the short and medium term.
If you wish to know more about opportunities in minor ports please contact Sachin Danave (+91 98201 54485) or Ramesh Singhal (+91 98203 40418) or drop a mail at project@imaritime.com.
We, at i-maritime, firmly believe that minor ports would be the drivers of port capacity expansion in the short and medium term.
If you wish to know more about opportunities in minor ports please contact Sachin Danave (+91 98201 54485) or Ramesh Singhal (+91 98203 40418) or drop a mail at project@imaritime.com.
