Ports and its infrastructure

1. Ports and its infrastructure Roundtable Conference on Coal 28th October 2013 , New Delhi Tamal Roy TM International Logistics Ltd. ( A Tata Steel Subsidiary)

2. Overview of coal import

3. Coal Import Trends CAGR = 22.63 % Inflection Point CAGR = 31.11 % CAGR = 11.63 % Imported Non-Coking Coal is the showstopper

4. Let’s slice the data further... Cargo Break-up in West Coast (MT) Cargo Break-up in East Coast (MT) 80 MT 58 MT Major Origins: • Non-Coking Coal : Indonesia and South Africa • Shorter haulage • Panamax/Supramax • Coking Coal : Australia • Longer haulage • Capesize/Panamax • Lion’s share of Coking Coal import through East Coast Ports due to proximity to Steel Plants • Import through West Coast skewed in favour of Non-Coking Coal

5. Imported Coal Traffic at Select Indian Ports during FY13 Select Major Ports Select Minor Ports Deep-Water Minor Ports Mundra – 26 MT Kandla – 4.3 MT Haldia – 6.5 MT Dhamra – 8 MT Paradip – 12.7 MT Visakhapatnam – 11.8 MT Mumbai– 4.2 MT Gangavaram – 10 MT Kakinada – 4 MT Mormugao – 7.3 MT Krishnapatnam – 16 MT New Mangalore – 4.3 MT Ennore – 6 MT Karaikal – 5 MT Tuticorin - 3 MT

6. Coal Logistics and port infra

7. Imported Coal Logistics Low Value Commodity Logistics Cost – Major Component of Landed Cost Freight Benefits through Economies of Scale Usage of Lager Vessel Import through Deep Water Ports Capable of accommodating Larger Vessels Mechanized Handling System Quick turnaround of vessels Larger Stockyards Holding larger parcels Reliable Evacuation Methods Rake availability / Hinterland Connectivity Port infrastructure plays pivotal role in imported coal logistics

8. Indian Ports – Issues and concerns

9. Inadequate Draft Mundra – 17 mtr Kandla – 12.5 mtr Haldia – 7.2 mtr Dhamra – 18 mtr Paradip – 14 mtr Mumbai– 11 mtr Visakhapatnam – 11 mtr Gangavaram – 16 mtr Kakinada –13 MT Mormugao – 11 mtr Krishnapatnam – 17 mtr New Mangalore – 14 mtr Ennore – 13.5 mtr Karaikal – 15 mtr Tuticorin - 12.5 mtr • No Indian Port is naturally deep drafted • No Major Port equipped to handle large vessels • Importers can’t derive freight benefits • Huge Dredging Requirement • Eating away Port’s profitability

10. Inadequate Infrastructure Limited dedicated coal handling facility at major ports Lower Productivity Semi-mechanised Handling System Higher Pollution Import traffic exceeding capacity Very high capacity utilization leading to Congestion Inefficient Port Operations

11. Hinterland Connectivity Overdependence on Railways Alternates to Railways System • Over utilised - Highly Congested • Track Congestion • Shortage of rakes • Shortage of bottom opening wagons • Zonal capacity constraints • Problems related to Inter-Zone re-deployment of rakes • Direct Conveying • Most efficient mean for importer adjacent to the port • Tata Power – Mundra • RINL – Gangavaram • TNEB - Ennore • High CAPEX – Guaranteed Cargo • Inland Waterways • More than 14500 kms of waterways • 5 National Waterways + State Waterways • Low level of Utilization • Coastal Shipping • 7500 kms long coastline covering 200 ports and 9 states • Safer Mode of transportation • Low level of Utilization Issues with Inland Waterways and Coastal Shipping • Inland Waterways • Poor navigability • Extremely strong seasonal river currents • Theft / River piracy • Coastal Shipping • Limited dedicated berths for coastal vessels • Norms on age, manning and statutory surveys similar to OGVs

12. Implementation Issues in Capacity Augmentation Approval from various agencies Land acquisition issues Credit Crunch Time and Cost Over Runs

13. Way Forward • Integrated approach in Transport & Logistics Infrastructure Planning • Synergy between Major Port Trusts and State Maritime Board • Hub and Spoke Model in Port Development to derive maximum benefit • Rail / Road Connectivity with the Hinterland • Single Window for all regulatory clearances • Incentives for Inland Waterways and Coastal Shipping