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National Maritime Development Programme . Ravi B. Budhiraja Chairman Indian Ports Association And Jawaharlal Nehru Port Navi Mumbai, India. AIAI Seminar, Mumbai - April 18, 2006. Se ctions. Indian Economy Indian Port Sector Need for Development Plan Guidelines for Privatization

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national maritime development programme

National Maritime Development Programme

Ravi B. Budhiraja


Indian Ports Association


Jawaharlal Nehru Port

Navi Mumbai, India

AIAI Seminar,

Mumbai - April 18, 2006

se ctions
  • Indian Economy
  • Indian Port Sector
  • Need for Development Plan
  • Guidelines for Privatization
  • Maritime Policy – Focus Areas
  • Recent Privatization Initiatives
  • NMDP (National Maritime Development Programme)
  • NMDP for Mumbai’s Ports
  • Sum up
potential india
Potential: India
  • 7thlargest country in the world and 2ndlargest in Asia
  • World’s 4th largest economy in terms of Purchasing Power Parity (PPP) next only to United States, Japan and China
  • GDP growth 7.6%* during financial year 2005-06
  • GDP-composition by sector: Agriculture-21%, Industry- 28%, Services-51%
  • Foreign Direct Investment (FDI) 2005-06: US$ 8 billion*. FDI shows 42.86% rise during 2005-06 compared to last year (2004-05 : US$ 5.6 billion)
  • Reserves of foreign exchange & gold 2005-06 : US$145 billion*

* Provisional

foreign direct investment
Foreign Direct Investment
  • Foreign Direct Investment (FDI) in India has grown 34 fold

Source : RBI Report 2004-05

* Estimated : The Economic Times, April5, 2006








In Million Tonnes







  • 1950-51 and 1980-81 (30 Years)+ 61 Million Tonnes
  • 1980-81 and 1990-91 (10 Years)+ 72 Million Tonnes
  • 1990-91 and 2000-2001 (10 Years ) + 217 Million Tonnes
  • 2000-01 and 2005-06(6 Years)+ 207 Million Tonnes
share of commodities major ports 2005 06
SHARE OF COMMODITIES- Major Ports : 2005-06

Source : IPA Report

* Figures in brackets indicate Traffic in Million Tonnes

traffic projections indian ports
Traffic Projections : Indian Ports

In Million Tonnes


Overall CAGR : 7.70%

Major Ports : 6.99%

Non Major Ports : 9.55%

(2004-05 onwards)



(#) CAGR = Compound Annual Growth Rate between 2000-01 and 2004-05

8.08 % for Major Ports, 10.59 % for Non-Major Ports and Overall 8.69%


Capacity Requirement

(Major & Non Major Ports)

In Million Tonnes

Source : NMDP Report – March 2006


Need For

Development Plan

national maritime policy
National Maritime Policy
  • For the first time, a comprehensive Policy for the Maritime Sector is being formulated :
      • Policy on Ports Sector
          • Public Private Partnership (PPP)
      • Policy on Shipping Sector
          • Including Cruise Shipping, Coastal Shipping

and Shipbuilding

      • Policy on Inland Waterways
policy vision
Policy Vision
  • Modernizing the existing Portsand upgrading their facilities in order to bring them on par with leading ports of the world.
  • Developing New Portsin order to fully utilize the vast coastline of the country and the available draft for deriving maximum economic advantage.
  • Promoting Hinterland Connectivityto ensure least distance access of the country’s cargo to the ports and also offer choice of ports in the region and terminals inside the ports.
  • Fostering Port Specialization and Inter-Port Complementaritiesfor overall optimization of port facilities and efficiency at the ports.
policy objectives
Policy Objectives
  • To ensure Competition and enhance Productivity
    • Second Terminal facilities in the same Port will not be handed over to first Terminal Operator. However if there are two Terminal Operators both can bid for Third Terminal
    • Quay length of 1000 metres in a straight line will be considered wherever possible.
    • The functioning of TAMP would be strengthened so that uniform and transparent norms prevail in matters of tariff fixation
  • To ensure transparency
    • Generally Port Project will be awarded through tender route. However, captive facilities can be given on nomination basis
policy objectives contd
Policy Objectives Contd…
  • To augment capacity
    • Captive facilities for Break Bulk, Dry Bulk and Common User Terminal will be encouraged
    • Setting up of Container Freight Stations in identified areas will be encouraged
    • Possibility of extending financial support for the development of minor ports
  • To enhance connectivity
    • To augment evacuation and handling of cargo, Port Authority will be encouraged to participate in equity of SPVs/Joint Ventures formed to provide hinterland connectivity
    • Port Infrastructure Upgradation Fund to leverage port investment including viability gap funding
policy objectives contd19
Policy Objectives Contd…
  • Participation in Risk Sharing
    • Revenue sharing will be preferred over royalty payment
    • The concerned port may decide whether Minimum Guaranteed Throughput (MGT) will be a pre-requisite
  • To Ensure Welfare
    • Strengthening of independent Traffic Regulator
    • In case of lease of existing facilities, it will be obligatory for lessee that surplus workers are taken over by successful bidder


- Guidelines

  • Guidelines formulated for Private Sector Participation, Joint Venture and Foreign Collaboration in the Major Ports which broadly include :-
      • Two Stage Bidding Process
        • Request for Qualification (RFQ) and
        • Request for Participation (RFP)
      • Automatic Approval up to 100% for FDI
      • Period of lease / BOT licence up to 30 years
      • Bidders to indicate percentage of revenue to be shared
      • Minimum Guaranteed Throughput not required.
port sector
Port Sector
  • Boost to Private Sector Participation
  • Private Sector investment leading to efficiency, competition and cost reduction to users
  • Coastal Shipping to increase from 7% to 15% by 2025
  • Inland Water Traffic to increase from 0.15% to 2% by 2025
  • Promoting Cruise Shipping
  • Private Sector Participation in areas like construction of Breakwater, operation of Berths / Terminals
  • Identifying Projects for Development of Ports with 8 years’ time horizon
ship building
Ship Building
  • Two Public Sector Shipyards
  • Capacity limited
  • Augmentation of existing shipyards underway
  • Two international size shipyards planned
  • Likely investment of Rs. 7,195 Crores
  • FDI preferred – PPP second option
inland water transport
Inland Water Transport
  • 14,500 kms navigable waterways
  • Only 18 Million Tonnes being carried
  • Three National Waterways
  • Proposal to develop three new National Waterways
  • NMDP envisages investment of Rs. 10,500 Crores

Private Sector Participation

- Success so far

  • 17 Private or Captive Projects involving private investments worth Rs. 6,130 Crores have been approved.
    • 13 projects involving investments of about Rs. 2,596 Croresare operational
    • 4 projects involving about Rs. 3,534 Croresare in different phases of implementation.
  • Presence of renowned International Operators
      • P&O Ports (DP World)
      • PSA Corporation
      • Dubai Ports International
      • Maersk A/S

Recent Initiatives


  • Manpower rationalized gradually during last few years from 102,000 in 1999-2000 to 69,000 as on March 31, 2005 at Major Ports.
  • Govt. has approved the proposal for award of contract for Development of International Container Transhipment Terminal at Cochin on BOT. The foundation stone was laid by Hon’ble Prime Minister on Feb. 16, 2005
  • Govt. has approved Sethusamundram Ship Channel Project at an estimated cost of Rs. 2,427.40 Crores. This will result in saving of upto 424 nautical miles distance and time upto 30 hours
  • Third Container Terminal Gateway Terminals India Pvt. Ltd. (GTIPL) at JN Port has started operations on trail basis from March 14, 2006. GTIPL will be operational fully by August 2006. Process has also been initiated of developing Fourth Container Terminal at JN Port
  • First port based Special Economic Zone (SEZ) at Cochin given ‘in principle’ approval through Ministry of Commerce.
  • Feasibility study for a World class Container Terminal at Ennore Port has been completed . Further action in this regard is being taken by the port authorities. Ennore Port is also set to enter Chemical handling operation through private sector participation
  • A project on Deepening for Approach Channel upto 18.7 meters a Paradip Port has been approved
national maritime development programme nmdp
National Maritime Development Programme (NMDP)
  • NMDP Includes projects which are under implementation as on 1st April 2005 or are likely to start till 31st March 2012. The Programme has further been divided into two phases.
    • Phase-I : Comprises of projects
      • Plan works under implementation as on 1st April 2005
      • Plan work expected to be started from 1st April 2005 to 31st March 2007
      • Works which though likely to start after 31st March 2007, but are expected to be completed by 31st March 2009
    • Phase-II : All other projects will be included in Phase-II
port sector focus areas
Port Sector- Focus Areas
  • Capacity
  • Draft
  • Hinterland connectivity
  • Productivity

NMDP has agenda for each one

nmdp requires huge investment ways to invite
NMDP requires huge investment- Ways to invite
  • Investment policy liberalized
  • Private Participation welcomed
  • Public Private Partnership (PPP) in key areas
  • Selective Budgetary Support
scheme of ppp
Scheme of PPP
  • 100% FDI permitted in Port development.
  • Private investment in Infrastructure/ commercial activities like Berths, Terminals, Equipments, etc.
  • Public / Private investment in common user facilities like Dredging, Break-waters, Hinterland Connectivity, etc.
national maritime development programme overview

Indian Major Ports : Proposed Investments – Phase I & II (Rs. In Crores)

compounded annual rate of growth mumbai s ports
Compounded Annual Rate Of Growth - Mumbai’s Ports

In million tonnes

  • *Compounded Annual Rate of Growth (CAGR) between 2004-05 and 2011-12
  • # Actual traffic handled during year 2005-06
to sum up
To sum up
  • Port Capacities as well as supporting Infrastructure in and around Major Ports in India developing rapidly with Private Investment and SPVs
  • We welcome investment in Port Sector
  • Procedure for Private Sector Participation simplified
  • Opportunities for investment in Port Sector are plenty
  • Indian Ports are ready to take Challenges and committed to provide seamless service with adequate Infrastructure in the years to come