Carriers look to further gains from JNPT's terminal privatisation

CONTAINER carriers in trades out of India are hoping to see greater operating advantages at Jawaharlal Nehru Port Trust (JNPT) from a privatisation model being laid out to modernise state-owned marine facilities currently caught up in a growth quagmire due to prolonged underinvestment and heightened competition.

JNPT sports 11 container berths out of five terminals, of which eight berths are operated by private concessionaires - APM Terminals, DP World, and PSA International. Three berths, including a shallow draft facility, are run by the landlord port.



Mirroring a government strategy to monetise stressed port assets, JNPT, at a recent board session, voted to proceed with a long-contemplated plan to upgrade its main two-berth facility - the oldest in the harbour - through private participation on a build-operate-transfer (BOT) basis. Designed with a linear quay length of 680 metres and an annual capacity of 1.5 million TEU, the Jawaharlal Nehru Container Port Terminal (JNPCT) opened in 1989.



Under the revamp programme, the private player is expected to invest INR661 crore (US$90 million) toward terminal assets, while the port plans to spend INR807 crore, in stages, on basic infrastructure improvements, according to port sources.



Current indications are that the port administration will kick off tender activity for the project in mid-2021 and award the contract in the second half of the year, with an early 2022 start timeline.



JNPT was unavailable for comment, reports IHS Media.



The port's move sparked immediate protests from dockworker unions, who decried the privatisation push as an arbitrary and needless approach. Venting their anger, workers held demonstrations in the harbour and leaders vowed to pursue legal options to protect the interest of workers.



On the other side, carriers appear upbeat about the potential of further productivity gains with increased intra-port competition. 'This is indeed a welcome move which, in fact, was long overdue,' said Sunil Vaswani, executive director of the Container Shipping Lines Association (CSLA).



'From the port users' perspective, competition would only help in bringing out the best in terms of service levels, port costs, increased capacity, better equipment, and deeper drafts required for larger vessels to call at these terminals.'



The group noted JNPCT, being a standalone facility, is denuded of the global network leverage to woo high-volume liner clients. Two aspects seem to validate that view: JNPCT has seen weekly calls shrink to just four - three on the intra-Asia lane and one connecting the Middle East - and volumes steadily slipped from 1.53 million TEU in fiscal 2016-17 to some 720,000 TEU in 2019-2020 even as combined port throughput continued to expand at a healthy rate.



Although port sources remain tight-lipped on investor signals, the Adani Group, given its aggressive expansion posture, is believed to be the most likely suitor for JNPCT. 'We do not comment on market speculation,' an Adani official said.


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