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Container Ports – Key Sector Trends. 21 st June 2010. Saurabh Suneja Tel: +91 11 42505163 (D), +91 11 26930117, +91 9910400494(M), +91 11 26842213 (fax) Email: [email protected]. This presentation. Trends: Indian ports, container traffic growth and drivers - PowerPoint PPT Presentation
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Container Ports – Key Sector Trends
Saurabh Suneja
Tel: +91 11 42505163 (D), +91 11 26930117, +91 9910400494(M), +91 11 26842213 (fax)
Email: [email protected]
21st June 2010
2.
This presentation
• Trends: Indian ports, container traffic growth and
drivers
• Capacity outlook: things are looking up
• Constraints: old; more pressing; and some emerging
caution points
3.
Traffic Snapshot (2009-10)
518 530 561
203 202266
0
200
400
600
800
1000
2007-08 2008-09 2009-10Major P orts Minor P orts
• Port Traffic grew at 10%
between 2004-05 and 2009-10
– Traffic at non-major ports grew at by
~7.9% for major ports ~ 14.2%
– Commodities: dominant share of POL,
followed by IO, containers and Coal
– Growth in major and non-major port
traffic since 2004-05 driven by
Containers (@ 15.8%), PO
– Traffic growth for major and non-
major @ 13% between FY 09 and
FY 10
• Capacity utilization levels
peaking for major ports: ~95%
– Minor ports utilization at 68%
Traffic growth
POL
Iron Ore
4.
Container traffic: Recent volatility, but strong growth fundamentals
21.00
22.00
23.00
24.00
25.00
26.00
27.00
28.00
Apr-Jun 09 Jul-Sep 09 Oct-Dec 09 Jan-Mar 10 Apr-June 10
• Recent volatility: Low / flat container traffic in 2009, Q1 2010
• Growth fundamentals continue to remain robust
– Growth in merchandise trade (WB expects merchandise exports to grow @
20% and 17% for FY 11 & FY 12 respectively)
– Growth in containerisation
Quarter wise container traffic (MT)
5.
Container traffic: strong outlook
0.00
50.00
100.00
150.00
200.00
250.00
2008-09 2009-10 (E) 2014-15 (P)
• Expected growth @ 11.2% CAGR to 195 MT by 2014-15
– Although growth not as high as in the past 5 years
• Commodity drivers:
– Imports: capital goods (driven my infrastructure growth)
– Exports: Textiles and food grains
11.2%
Expected container traffic growth (MT)
6.
Recent developments – select projects
Gangavaram: Coal +, 2008
Krishnapatnam: Coal, IO, 2008
Karaikal: Coal +, 2008
Select recent projects
and expected
dominant
commodities
• Recent capacities added to minor ports
•Dominated by bulk capacities on the east
coast
Jaigarh: Bulk (coal +), Gen, Container
7.
Huge capacities planned for non-major, major ports
8.
Select upcoming projects - large capacity expansions
Paradip: Award of IO and coal terminals
• Large capacity expansions underway: projected addition ~ 700 MT (*as of July 09)
– Expected both for major and minor ports
– Key drivers: Container demand, coal imports for power gen
– LNG capacities expected in western ports on the back of improved gas grid
• Confidence wrt. projects coming up
– Projects at major ports are at advanced stages of development
– Many minor ports projects at existing ports and capable developers
Valarpadam: Cont. - dev. by DP World
M’goa: Coal & IO
Mum: Offshore cont. (Gammon +)JNPT: 4th cont. term.
Mundra: Coal; SPM
Dahej: LNG jetty
Ennore: Coal terminal
Krishnapatnam: Phase 2 expDighi: Coal & cont.
Chennai: 2nd cont. terminal (PSA Sical)
CONTAINERSBULK
Dhamra: Coal +
9.
Select upcoming projects – PPPAC approval
Paradip: Multipurpose to handle cargo & containers
Container projects in major ports – recent PPPAC approval obtained
JNPT: Standalone Cont. Handling
New Mangalore: Container terminal
Chennai: Mega Container Terminal
Tuticorin: North cargo berth II
10.
Outlook: Project flow expected to look up
• Investments have been already happening on minor ports
– Strong minor ports capacities in Gujarat; AP and Orissa are catching up
• Projects flow for major ports has been subdued for various
administrative reasons
– Delay in finalization of new MCA
– Time taken for clearing tariffs for new projects as per 2008 TAMP guidelines
• But projects flow is looking up
– Projects under process: JNPT 4 under bidding, Chennai mega container
terminal, Tuticorin berth No. 8
– The PPPAC approved 8 projects during Oct 08 – Nov 09 with expected
project costs of INR ~ 11 thousand crores
– 4 projects for INR 4,179 crores under consideration
11.
Non-major ports: growth in share to continue
• Consistent growth in market share: Traffic share grew from around 27%
in 2005-06 to ~ 32% for 2009-10; 11.5% share of non-major ports in container traffic
• Majority of recent capacities in non-major ports
• Rise in expected share beats past forecasts
64%
36%
Expected share in Capacity at 36% as per 11th Plan
0
200
400
600
800
1000
1200
2008-09 2013-14Major Ports Non-Major Ports
Share in traffic expected to grow to 42.2% for 2013-14
12.
Capacity utilizations to ease
• Overall utilization levels would come down from the present
~85% to ~73%
2008-09 2013-14 (P)
Major ports ~95% ~74%
Non-Major
ports
~68% ~72%
Current and expected capacity utilizations
13.
Minor ports to gain share in container traffic
• Container traffic at non-major ports projected to grow @ 27% against
10.5% at major ports
• Growth in traffic at non-major ports in line with available free capacity –
container capacities coming up at the non-major ports of Pipavav, Hazira,
and Dighi will drive higher growth / share
Container traffic – expected growth (MT)
0.00
50.00
100.00
150.00
200.00
250.00
2008-09 2009-10 (E) 2014-15 (P)
Non-Major
Major
Non-major: 27%
Major: 10.5%
167
43
195 MT
14.
Issues
• Container ports efficiency: Many old constraints remain
– Issues related to mechanisation have been largely resolved in cases of large privately operated terminals
– Congestion issues remain due to very high capacity utilisation (e.g. JNPT)
– Lingering constraints of: Shallow draft at major ports, poor hinterland connectivity
• Delay in development of many announced projects
– delays in environmental clearance, problems with financial closure
• Bringing bankable projects to market still the biggest hurdle
– Reliance on private investment for capacity ports dev. is huge: ~USD 14 Bn
– Poor project preparation, unattractive packaging lead to delays at procurement and post award stages
– Some minor port projects have highlighted systematic gaps in site selection: environmental issues, unfavorable soil conditions etc.
– Administrative, policy change issues
15.
Concerns / Caution points (Observations from recent projects)
• Concerns over traffic
– Merchandise trade growth dependent on health of global economy – not out of
the woods yet
– Key concern for new projects, difficult financial closures for borderline projects
• Differential royalty structure in minor ports adversely impacts the
economics of new port developments
– Operational ports already have a first mover advantage
– May delay investments / reduce competitive position of newer developments
– Are recent bids too aggressive?
16.
Summary
• Traffic flow has started to look up after a brief depression
– Growth fundamentals remain strong
• Trends from traffic and capacity addition expectations
– Trend towards minor ports gaining market share will continue
– Capacity utilisations shall ease, balance in favour of minor ports
• Sector is poised for growth and investments
– Healthy pipeline of under development, awarded, and approved projects
– Many minor ports are sitting on potential for capacity ramp up and have
robust development plans, major ports projects flow will go up
– But hinterland connectivity constraints and some other issues will need
to be managed
17.
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