article in maritime gateway on land policy (2014) for major ports (may- '14 issue)

8/12/2019 Article in Maritime Gateway on Land Policy (2014) for Major Ports (May- '14 issue)

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POLICY

Land Management:Unlocking value

least help the ports utilise the available

vacant land at the ports.

According to a statement issued by

the Ministry of Shipping, Major ports in

India collectively have around 2.65 lakh

acres of land available with them. Out

of this, around 18-20 per cent is not in

use and could be termed surplus. This

reects that roughly 50,000 acres of land

worth several thousand crores is locked

up with the Major ports, most of which

are at premium locations in main Indian

cities. The new land management policy

for Major Ports would facilitate this

surplus land available for commercialdevelopment around ports. This land

can also be used for setting up of special

areas aimed at encouraging industrial

development and port-based industries,

in and around the ports.

As per the earlier version, Land

Management Policy 2010, land inside

custom bound area could be leased for a

maximum of 11 months. Medium-term

lease of up to 10 years to port users

was permissible for setting up of port

related structures such as conveyors,

silos, pipelines and temporary transit

sheds. With the new policy, land can

be leased up to 30 years by a port with

the approval of the board of respectiveports.

he Ministry of Shipping,

Government of India is in the

process to provide exibility

to Major Port Trusts in order

to allow them to react to the marketforces and to encourage them for better

performance. The Ministry has taken

signicant policy initiatives in this

direction. The recent revisions in the

tariff-setting mechanism for Major ports

Draft guidelines for determination

of tariff for Major Port Trusts, 2014

and Land Management Policy for

Major Ports, 2014 are steps in the

right direction for the development of

Indian port sector. Major ports in India

are administered by the Ministry of

Shipping (MoS), Central Governmentand are regulated by the Tariff

Authority for Major Ports (TAMP).

These ports operate in more regulated

environment, compared to the state

ports, particularly private ports, which

enjoy substantial degree of exibility.

Recent policy initiatives are expected to

provide a level-playing eld to Major

ports in India vis--vis the non-Major

privately-owned ports. Major ports in

India collectively accounted for around

58.5 per cent of total sea-borne trade in

2013.

New land-use policy for Major ports

in India is denitely a welcome move.

The proposed policy would not only

allow Major ports in India to expand

their facilities but would also shore up

their revenues and business prospects.

As per the land management Policy

for Major Ports, 2014, all Major ports

would be allowed to take land allocation

decisions for vacant land available with

them. So far, land utilisation in most of

the Major ports is not optimum, which

results in operational and land-useinefciencies. The new policy would at

T

Nivesh ChaudharySr. Research Analyst, Drewry Maritime Advisors

maritime gateway/may 201426

8/12/2019 Article in Maritime Gateway on Land Policy (2014) for Major Ports (May- '14 issue)

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Ennore Port, which isstretched to its fullcapacity, is in processof acquiring 730 acresof governmentowned land.

reduced the discretionary powers

and arbitrariness of individual port

authorities, including the respective

chairmen of port trusts. This would

end the possibility of corrupt practices

because the land allotment wouldnow be through competitive bidding

process, thus bringing transparency and

accountability in the process.

Global practices

Globally, it is an established practice

among the ports to allot available land

to carry out port related and allied

economic activities and harnesses

its economic benets. Many of the

European and Far-East Asian ports have

even focused on non-maritime functions,

such as residential, ofce, or commercialland-uses, on port owned land.

Port of Rotterdam, Amsterdam

and Dalian are some of the successful

global examples where ports have been

able to effectively optimise their land

uses. These ports have also successfully

adopted tools for long-term planning

of port based activities and optimum

utilisation of their land.

Conclusion

Most recent growth trends suggest

that the Government of India needs tointroduce substantial amount of policyinitiatives for developing Indian portsector, particularly Major ports. Trafcat Indian Ports grew at a compoundedannual growth rate (CAGR) of 7 percent during FY2007 to FY2013. Thisgrowth has been primarily driven bynon-Major ports with a CAGR of 16 percent, compared to only 0.71 per cent forMajor ports, for the same period. As aresult, the share of Major ports in thetotal trafc decreased to 58.5 per cent inFY2013, from the level of 71 per cent inFY2008.

In spite of various attempts, growthof Major ports has been slower thanthe expectations. However, recentinitiatives, particularly the newguidelines on tariff-setting for Majorports (Draft guidelines for determinationof tariff for Major Port Trusts, 2014)and the new land management policy, arelikely to open up new growth avenues

for Major ports. The new land policy

would hopefully facilitate cargo growth

and guide overall functioning anddevelopment of the port sector in India.

Immense possibilities

Most of the Major ports have a large

chunk of vacant land available with

them. Mumbai Port Trust (MPT) has

about 740 acres for leasing purposes,

including 70 acres of vacant land;

Jawaharlal Nehru Port Trust (JNPT) has

around 1,975 acres of land outside the

customs bond area. Cochin Port Trust

has approximately 2,350 acres, while

Kolkata Port has got around 4,575 acres

of land. The guidelines approved by

the Ministry of Shipping could create

immense possibilities for Major ports

as this land bank could become highest

source of revenue for them.

The new policy is aimed at all 13

Major ports, including Ennore Port(now ofcially known as Kamarajar

Port) which is a corporatised major port;

however, not all of them would be able

to benet equally from the policy. For

instance, the impact on JNPT would

not be too signicant since its land

use has already been approved earlier,

separately. Mumbai Port is also not

likely to gain from the present form of

the policy, as township areas of Mumbai,

Kolkata and Kandla have been excluded

from it. However, Chennai Port now has

a larger proportion of land available dueto loss in its coal and iron ore business,

after export of iron ore and handling of

coal cargo was banned lately. The port

hopes to recover a large portion of its

losses with the new policy announced.

Ennore Port, which is stretched to its

full capacity, is in process of acquiring

730 acres of government owned land.

The proposed policy would allow

efcient use of ports land and help the

port in maximising its revenue.

Crucial elements

During the land management process,

it is critical to ensure that the port

authorities prepare a detailed land-use

master plan and then lease the available

and identied land only in accordance

with the proposed master plan. Land-

use master plans would allow the port

authorities to rationalise port related

activities by assigning certain strategic

sectors for leasing activities. The master

plan would also help in ensuring that all

assigned sectors are as per future port

development plan. It is also importantthat the port authorities constantly

monitor the land-use pattern and

availability of vacant land and manage

all available lands accordingly.Another key success factor would

be linking the value of available land

resources with the prevailing market

rates. This is important in order to

access real time potential and realise the

optimum value of the available land.

Adopted policy framework should

also be continuously monitored in terms

of its content and technical analysis.

End of discretions

Under the new policy guidelines, landcan be allotted only through licensing

in custom bond areas by inviting

competitive bidding, while leasing of

land outside custom bond areas would

only be possible through tender-cum-

auction. The new policy has, thus,

The new policy guidelines

Land can be allotted only through licensing

in custom bond areas by inviting competitive

bidding, while land outside custom bond areascan be leased through tender-cum-auction.

Leasing of land should be in accordance with a

land-use plan covering all land owned and/or

managed by the Port.

Land outside custom bond areas can also be

licensed, but it is restricted to port related

activities.

The Boards of respective ports can approve

leasing of land for a period up to 30 years.

Leasing of land beyond 30 years and up to 99

years has to be approved by the Empowered

Committee.

may 2014 / maritime gateway 27

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Indias premier maritime business magazine `100

MAY 2014 WWW.MARITIMEGATEWAY.COM

POSTAL REGISTRATION NO: LII/RNP/HD/1137/2013-15RNI NO: APENG/2009/30633

DATE OF PUBLICATION: 26/04/2014

Terminal Scan:

Efficiency, Thy Name is APM

Energy security issues and high spend inexploration and production by privateand government-owned companies havemade India an attractive market foroffshore shipping service providers. If thegovernment is able to support this surge

in demand with policy guidelines, thesegment will grow further.

Offshore industry

On a roll

8/12/2019 Article in Maritime Gateway on Land Policy (2014) for Major Ports (May- '14 issue)

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MAY 2014VOLUME 6 ISSUE 8

News in Brief ............................................ 06

Numbers .................................................. 08

News ........................................................ 09

The MG Diary ............................................66

OTHERSINTERVIEWS

DAIRY LOGISTICS

Mamma Mia! Mother Dairy......................... 42

WAREHOUSING INFRASTRUCTURE

Technology adoption in warehousesremain low in India....................................... 44

The warehousing industry in the country isseeing an unprecedented growth backed bythe retail boom, growth in production andconsumption practice.

SUPPLY CHAINTechnology in SCM firms ............................47

CLASS ROOMAccidents at sea ...........................................50

GEO POLITICS

Russian crisis keeps container shippinglines on guard................................................52

TASK INTEGRATION

Security at sea requires a singleoperational picture.......................................54

Government agencies need to work togetherto build a single operational picture to makeCoastguard operations more efcient.

MARITIME PIRACYDatabase to define piracy trends ............58

CHARTER DISPUTES

Safe port and safe berth ............................60

Disputes between charterers and owners pavesway for a resolution helping owners as they donot need to prove any damage to the ship toclaim that a port is not safe for berthing.

EQUIPMENTRetrofitting harbour crane ........................62

Swedens Port of Gvle has been successful innot only increasing its productivity signicantly,but also cut down demurrage costs to a largeextent, making the port more attractive forshipping lines.

EVENT REVIEWMAPS: CreatingMaritime Awareness ................................... 64

CONNECTIVITY

A modern day Silk Roadbecomes a reality..........................................19

New Silk Road between Asia, Europe as one of

the world's longest rail links.

POLICY

Land Management:Unlocking value.............................................26

INLAND WATER TRANSPORT

RIS system for safe navigation.................29

IWAI proposes to establish River Informationservice System (RIS) along NW1 to supporttrafc and transport management in inland

navigation.

TARIFF TROUBLEShipping lines give a thumbs down toKoPTs increased tariff................................ 32

The Kolkata Port Trusts steep step-up in tariffrates has irked the shipping lines who reckonthe increase is unjustied and not in line withcharges levied by other major ports.

Our vision is to develop four Dry Ports infive years.......................................................25

PSS Prasad,

President,Apollo Logisolutions Ltd

We aim to become a `1,000-crorelogistics player by 2016..............................51

Akash Bansal,Head (logistics),Om Logistics

OFFSHORE INDUSTRY ON A ROLLEnergy security issues and high spend in exploration and production by private andgovernment-owned companies have made India an attractive market for offshore shippingservice providers. If the government is able to support this surge in demand with policyguidelines, the segment will grow further.

COVER STORY p. 20

TERMINAL SCAN

Efficiency Thy Name is APM...................... 34Rajieve Krishnan, Chief Commercial Ofcerat APM Terminals Mumbai and the man incommand has got more than just the formularight. And its all there to see.

PARTNERSHIPShipper-Carrier Relationship:Where Trust is the new mantra................ 36

Globalisation and the prevalent economicambience in each country have allowed both theshippers and carriers to occupy the drivers seatin turns.

SHIPBUILDINGCapability, Competitive Pricing lead to newshipbuilding yards........................................38As shipbuilding nations in South Asia mature,Lloyds Registers new guide provides anoverview of over 80 shipyards and 18 shipdesigners in Bangladesh, India, Indonesia,Malaysia, the Philippines, Singapore, Sri Lanka,Thailand and Vietnam.

maritime gateway/may 201404

Corrigendum

The Jawaharlal Nehru Port Trust is creating a parallel reception

facility and envisages a Multi-Modal Logistics Park to come up in

110 hectares. The area of land was incorrectly printed in the previous

issue. The error is sincerely regretted and MG stays committed to its

standards of quality and accuracy.