Bhalla: Expansion, small ports? performance key to India cargo growth

Bhalla: Expansion, small portsÆ performance key to India cargo growth    India's outgoing shipping minister said the country will rely heavily on contributions from smaller seaports in order to handle the 15 million TEUs expected by 2012.
   In an interview with Indian Infrastructure, A.K. Bhalla, who in May completed his two-year tenure as secretary of the Ministry of Shipping, Road Transport and Highways, said that capacity must double at the country's 12 major ports as well as the remaining 'non-major' ports within five years.
   'Addition of capacity at a much faster pace is the need of the hour and should be the topmost priority,' Bhalla said. 'Non-major ports are going to play a major role in this regard in the next five years.'
   By the ministry's projections, the share of cargo, by metric ton, moving through the nation's smaller ports should increase from 31 percent today to about 38 percent in 2012.
   Bhalla also stressed the reduction of dwell time in Indian cargo terminals as a way to increase latent capacity. India's ports are among the least efficient in Asia in terms of the time it takes for a container to be unloaded from a ship and discharged from the terminal. Among the chief causes are port road and rail infrastructure links between the ports and inland destinations at key cargo gateways like Mumbai and Chennai. Analysts have blamed government bureaucracy for slowing efficiency in ports as well — stymieing the efforts of private terminal operators and providing little modernization in India's state-run terminals.
   Another issue Bhalla addressed was high port tariffs.
   'Vessel-related charges in Indian ports are known to be very high,' Bhalla said. 'Sufficient capacity creation and competition in port-controlled monopolistic services needs to be strived for to make Indian ports more competitive. One of the important issues facing the major ports is the methodology of tariff setting. The present cost-plus-fixed return model is under criticism and efforts are under way to formulate a norm-based tariff-setting mechanism.'
   Lastly, Bhalla said that an online system linking ports, customs, railways, banks and port users should be online by December, enabling paperless ocean transactions.