Stuck in this bottleneck: 5,000 cr

As the private terminal—Nhava Sheva International Container Terminal (NSICT), owned by Australian port major P&O—slugs it out with the state-run port, India’s much-touted ports story is in jeopardy.

Ask Rajesh Kakani, who is living an export manager’s nightmare.

For the last 45 days, Balkrishna Industries Ltd has 150 containers filled with rubber tyres parked at JNPT. Apart from incurring a cost of Rs 50 lakh a month on detention and demurrage charges, what Kakani really dreads is a call from clients in Europe and the US.

‘‘We are now getting warning signals that our order will be cancelled. We have cut down on production and exports by 20 per cent. That’s a loss of Rs 6 crore per month,’’ says Kakani.

Uttam Guin, a logistics manager with India’s largest exporter, Reliance Industries, adds, ‘‘Our exports will get hit if this (congestion) continues.’’

According to the latest Economic Survey, JNPT’s average turnaround time — time taken for a vessel to arrive in port, unload, reload, and depart — is a relatively healthy 37 hours (national average: 3.5 days). The average container vessal turnaround time in Singapore is 12 hours, the international benchmark is 24 hours.

But as things stand now, there are no bets on the turnaround time at JNPT, which accounts for over half of India’s container traffic.

‘‘You have to come here to believe the mess the government has created,’’ fumes Jimmy Sarbh, Chairman of NSICT, whose landlord and main competitor JNPT operates the other terminal. ‘‘The roads are clogged just outside our terminal. The container freight stations are bursting to the seams and we are losing crores as we are unable to cater to growing export traffic.’’

In short, busy catering to a surge in imports and unable to meet the October-February peak demand of exports, NSICT’s terminal — which used to have a 21-hour turnaround time — is hit. ‘‘We have set up task forces between JNPT and NSCIT for better coordination,’’ says JNPT Chairman Ravi Buddhiraja.

Joining the blame game is the Container Corporation of India (Concor), which says NSICT’s infrastructure cannot match the increase in capacity. ‘‘There is no co-ordination between both JNPT and NSICT. We can only provide the wagons, the number of lines are the same,’’ says A K Kohli, Concor’s managing director.

Just four months ago, in the Economic Survey, the government highlighted the ‘‘impressive’’ rate of progress in India’s ports sector. Attention was lavished on the NSICT-JNPT experience. Set up in 1999 at a cost of Rs 900 crore, NSICT handled 12.3 lakh TEUs of containers in 2003-04 — double of its minimum commitment in 2004-05.

Ports handle 90 per cent of India’s exports. Container traffic, in particular, has been growing by a sharp 15 per cent per annum over the past five years. But JNPT — which has been ‘‘inhibited by inflexibility in decision making’’ — has not been corporatised (it is managed by the Major Ports Trust Act, 1963)

Nikhil Gandhi, Chairman of India’s first private port in Pipapav at Gujarat, says privatisation is the answer. ‘‘JNPT must immediately develop two more berth through two differnt operators and additional third terminal should be planned before 2009. Long-term vision is required for the Indian ports sector not piecemeal solutions,’’ say he.

JNPT’s third terminal — managed by Danish shipping firm Maersk in association with Container Corporation of India (Concor) — will be operational in a couple of years’ time.

The government says it is aware of the problem — but any solutions will take time. ‘‘While traffic in JNPT has grown, the capacity hasn’t grown in a similar magnitude, resulting in a mismatch,’’ says D T Joseph, Shipping Secretary. ‘‘Capacity has to grow and we have to distribute the traffic. The third terminal for JNPT will be operational in 24 months and a fourth one is also being planned.’’

But with an ambitious exports target of $300 billion by 2015, it’s obvious the economy cannot afford to miss its port of call.