Kolkata Port Trust

Abstract

Kolkata Port (KoPT) had achieved a turnaround from having made a loss of Rs 7.5 crores (cr) in the year 2000‒01 to a net surplus of Rs 465.1 cr in the year 2006‒07. A variety of initiatives had been taken during the intervening years with a focus on tariff rationalization, revenues from alternate sources, infrastructure development and productivity improvements. While these had yielded results, there was a fundamental issue of operational complexity and inability to compete due to the locational disadvantage. KoPT was a riverine port with two dock complexes, 115 kms and 232 kms at Haldia and Kolkata respectively, upstream on the Hooghly, with draft limitations.

Two significant studies having implications for future strategies of KoPT had been submitted in March and November 2007. The top management of the port, including the Chairman who was responsible for driving many of the initiatives, was concerned that it won’t be possible to achieve a long term sustainable growth continuing with the strategies employed so far. A well thought out future roadmap, breaking away from the present thinking, was essential for sustained growth.

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Abbreviations

BOT

Build Operate Transfer

CFA

Carrying and Forwarding Agent

CAGR

Compounded Annual Growth Rate

CESC

Calcutta Electricity Supply Corporation

CFS

Container Freight Station

CONCOR

Container Corporation of India

DGLL

Director General of Lighthouses and Lightships

DLB

Dock Labour Board

DWT

Dead Weight Tons

EDI

Electronic Data Interchange

HDC

Haldia Dock Complex

HOD

Head of Department

HR

Human Resource

ICD

Inland Container Depot

IPA

Indian Ports Association

IT

Information Technology

IWAI

Inland Waterways Authority of India

IWT

Inland Water Transport

JNPT

Jawaharlal Nehru Port Trust

KDC

Kolkata Dock Complex

KDS

Kolkata Dock System

KoPT

Kolkata Port Trust

KPD

Kidderpore Dock

L&T

Larsen and Toubro Limited

MHC

Mobile Harbour Crane

MoD

Ministry of Defence

MoSRTH

Ministry of Shipping, Road Transport and Highways

mt

Million Tons

mtpa

Million Tons Per Annum

NMDP

National Maritime Development Program

NSD

Netaji Subhash Dock

PBD

Pre Berth Detention

PCS

Port Community System

PHA

Port Health Authority

POL

Petroleum Oil and Lubricants

PPP

Public Private Partnership

PPPAC

Public Private Partnership Appraisal Committee

RMGC

Rail Mounted Gantry Crane

RMQC

Rail Mounted Quay Crane

RTGC

Rubber Tyred Gantry Crane

SEZ

Special Economic Zone

TAMP

Tariff Authority for Major Ports

TERI

The Energy and Research Institute

teu

Twenty Foot Equivalent Unit

THC

Terminal Handling Charges

VTMS

Vessel Traffic Management System

WBIDC

West Bengal Industrial Development Corporation

Glossary

  • Anchorage: A designated place for vessels to anchor in the port.
  • Barge: Flat bottomed boat for carrying cargo on protected waterways, usually without engines or crew accommodations.
  • Berth: A space for a ship to dock or anchor.
  • Break bulk: Break bulk cargo forms part of the general cargo handled by a part, which comprises of small parcel sizes of various bulk and other minor commodities, which are carried in the general cargo holds in a ship.
  • Bulk: Cargo shipped in loose condition and of a homogeneous nature. Cargo that is shipped unpackaged either dry, such as grain and ore, or liquid, such as petroleum products.
  • Bulk carriers: Ships specifically designed to transport bulk cargo.
  • Cape size vessel: Vessels with deadweight in excess of 1,00,000 DWT and area used primarily in the carriage of iron ore and coal cargo. The name signifies the Cape of Good Hope route that these vessels have to take in place of the shorter Suez Canal route.
  • Dead weight tons: A measure of the cargo carrying capacity of a ship and refers to that total weight of the cargo that a ship can carry when loaded down to its marks, including the weight of fuel, stores, water ballast, fresh water, crew passenger and other baggage.
  • Demurrage: The penalty imposed by port authority on the receivers of cargo for not clearing cargo from the port premises within the stipulated time.
  • Draft: The depth of a ship in the water. The vertical distance between the waterline and the keel.
  • Dredging: An act of scooping or sucking up mud, sand, rocks, etc to deepen or clear the channels, harbours, etc.
  • Dry dock: An enclosed basin in which a ship is taken for underwater cleaning and repairing.
  • Feeder ship: Ships that handle trans-shipped cargo from one port to another.
  • Jetty: A structure, such as a pier, that projects into a body of water to influence the current or tide or to protect a harbour or shoreline from storms or erosion.
  • Lock gate restriction: An enclosure in a water body with gates at each end to raise or lower water vessels as they pass from one level to another.
  • Lighterage: The act of using a smaller vessel or barge for moving the goods ashore (in a case of a ship not being able to tie up to a quay due to its draft).
  • Output per ship day: The ratio of the aggregate cargo handled to the total number of berth days.
  • Panamax: These are vessels with deadweight in the range of 60,000 DWT to 1,00,000 DWT are used primarily in the carriage of iron ore, coal and grain cargo. Panamax vessels are the largest vessels that can pass through the Panama Canal.
  • Pilotage: The act carried out by a pilot of assisting the master of a ship in navigation when entering or leaving a port.
  • Pre berthing detention: The time taken by a ship from its arrival at the anchorage till it starts its movement to the working berth.
  • Quay: A structure of solid construction along a shore or bank that provides berthing and generally provides cargo handling facilities.
  • Reach stacker: A mobile crane, usually used to handle containers.
  • Shipper: Individuals or businesses who tender goods or cargo for transportation. Usually the cargo owners or their representatives.
  • Stevedore: A stevedore manages the operation of loading or unloading of ships. A stevedore typically owns equipment used in the loading or discharge operation and hires men who load and unload cargo under supervision.
  • Suezmax: Largest ships capable of transiting the Suez Canal fully loaded, and are almost exclusively used in reference to tankers. They have a capacity ranging from 1,20,00 DWT to 2,00,000 DWT.
  • Tractor trailer: A truck consists of a tractor (the motive power unit consisting of a cab and a driver) and a trailer (cargo carrying unit). The tractor and the trailer can be separated, if required..
  • Transhipment: A shipment that has been moved through, imported, transferred, or unloaded in one or more intermediary countries (other than their originating country) prior to importation into the final destination country.
  • Trans loaders: A rubber tired, self propelled machine for loading, transporting, and dumping from truck to rail, from container to warehouse with telescopic forks.
  • Turnaround time of vessel: It refers to ‘the time the vessel reports at the anchorage to the time it sails out of the berth’.
  • Tug: A small vessel designed to tow or push large ships or barges. Tugs have powerful diesel engines and are essential for maneuvering large ships around the port.

Source: www.wikipedia.org, accessed on July 21, 2009 and ‘Indian Maritime Report 2009’, Imaritime Consultancy, 2009.

Exhibit 1: Location

KoPT has two locations, KDS and HDC, on the Hooghly River in the state of West Bengal in India. KDS is located on the left bank whereas the HDC is located on the right bank and further downstream on the river. KoPT is the only riverine major port of India.

Figure

Port

Location

Entrance Channel

Turning Circle

Latitude

Longitude

Distance from Harbour (km)

Minimum Depth (m)

Minimum Width (m)

Number

Diameter (m)

KDS

22°33′N

88°19′E

232

3.0

45

1

190/288

HDC

22°02′N

88°06′E

115

6.7

467

1

549

Source: ‘Location and Topography: Major Ports’, IPA, 2006‒07

Figure

Source: Google Earth, accessed on July 30, 2009

KDS

Figure

Source: Google Earth, accessed on July 30, 2009

HDC

Figure

Source: Google Earth, accessed on July 30, 2009

Exhibit 2: Physical Structure and Facilities

KDS consisted of Kidderpore Dock (KPD) including KPD I and KPD II, separated by a Bascule Bridge, Netaji Subhas Dock (NSD), oil wharves at Budge Budge, anchorage at Diamond Harbour, Saugor, Sandheads and virtual jetty at Saugor Island. The anchorage was used as lighterage points for cargo, before the ship proceeded to KDS or HDC. It was a multi drafted port with 7.5 meters draft at KDS during high tide, and increasing drafts downstream up to 50 m draft at Sandheads. KPD I had ten berths, KPD II eight berths, NSD ten berths (including one for POL/liquid cargo and four for containers) and Budge Budge six POL jetties.

HDC had 15 berths including two for containers and three for POL. It also had two barge jetties.

Source: Kolkata Port Trust, 2007

Commoditywise Berths (31st March 2007)

(Nos)

POL and Other Liquid

Iron Ore

Coal

Fertilizer

Container

Gen/Break Bulk

Total

KDS

7

-

-

-

4

23

34

HDC

3 (+2 Barge Jetty)

1

2

-

2

7

15 (+2 Barge Jetty)

Source: ‘Number of Berths Available’, IPA, 2006‒07

Cargo Handling Equipments (31st March 2007)

(Nos)

Crane

Forklift Truck, Toplift Truck, Reach Stacker

Tractors

Trailers

Shovel Dozer, Pay Loader, Excavator etc

Locos

Mobile

Wharf

Container

Quay

Yard

KDS

14

12

-

4

23

34

67

-

4

HDC

2

-

-

1

7

1

5

12

11

Source: ‘Census of Cargo Handling Equipment’, IPA, 2006‒07

Cargo Storage Infrastructure (31st March 2007)

(Sqm)

Sr No

Type of Storage

Port

Private and User Agencies

Total

1

Kolkata

Covered area

    a. Transit shed

134722

-

134722

    b. Warehouse

10794

-

10794

    c. CFS

9000

-

9000

2

Open area

174465

-

174465

3

Liquid cargo (Tank farms etc)

-

654078 KL

654078 KL

Total

328981

654078 KL

328981 + 654078 KL

1

Haldia

Covered area

    a. Transit shed

25040

-

25040

    b. Warehouse

-

-

-

2

Open area

892840

-

892840

3

Liquid cargo (Tank farms etc)

-

-

-

Total

917880

-

917880

Source: ‘Storage Facilities’, IPA, 2006‒07

Exhibit 3: Hinterland

Figure

The hinterland of KoPT comprised mainly West Bengal, north eastern States, Jharkhand and Bihar. KoPT is also an important gateway port for the neighbouring countries of Nepal and Bhutan. Other Indian states which contributed to the KoPT traffic were Uttar Pradesh, Uttarakhand, parts of Haryana, Punjab, Madhya Pradesh and Orissa. Being the gateway port in the east and catering to the rising trade of India with eastern and far eastern countries, it catered to a very large hinterland.

Source: ‘Proposed Port Facility at Diamond Harbour’, CES, 2007

Exhibit 4: Organizational Structure

Figure

The Chairman was the executive head of the Port Trust and also the Chairman of the Board of Trustees. He was responsible for the total administration of the port including KDS and HDC. Deputy Chairmen of KDS and HDC were responsible for the day to day management of the affairs of KDS and HDC, respectively. There were 14 departments in KDS functioning under the respective HODs and 10 divisions in HDC functioning under two General Managers.

Some of the officers had responsibilities for both KDS and HDC: (a) Director, Planning; (b) Director, Marine; (c) Financial Advisor and Chief Accounts Officer; and (d) Chief Hydraulic Engineer.

Source: Kolkata Port Trust, 2007

Exhibit 5: Traffic Trends

Overall Traffic Trend

The traffic trend for the six year period 1995‒96 to 2001‒02 and the five year period 2001‒02 to 2006‒07 is given below. The CAGR for the first period was 5.9%, while for the second period it was 11.6%.

(mt)

Year

KDS

HDC

KoPT

1995–96

6.12

15.39

21.51

199697

6.02

17.10

23.12

1997–98

7.95

20.21

28.16

1998‒99

9.16

20.22

29.38

1999‒00

10.31

20.71

31.02

2000‒01

7.16

22.84

30.00

2001‒02

5.37

25.03

30.40

2002‒03

7.20

28.60

35.80

2003‒04

8.69

32.57

41.26

2004‒05

9.95

36.26

46.21

2005‒06

10.81

42.34

53.15

2006–07

12.60

42.45

55.05

Figure

The contribution of KDS to total KoPT traffic declined from 28% in 1995‒96 to 18% in 2001‒02. At KDS, the traffic profile increased in favour of liquid bulk, and reduced for break bulk. At HDC, it increased in favour of containers and reduced for liquid bulk.

The contribution of KDS to total KoPT traffic improved from 18% in 2001‒02 to 24% in 2006‒07. At KDS, the traffic profile increased in favour of containers and conventional dry bulk, and reduced for liquid bulk over these years. At HDC, it increased in favour of dry bulk and reduced for liquid bulk.

Container Traffic Trend

(teus)

Year

KDS

HDC

KoPT

1995‒96

121,000

4,000

125,000

1996‒97

132,695

8,881

141,576

1997‒98

140,880

28,212

169,092

1998‒99

132,291

27,951

160,242

1999‒00

147,000

28,000

175,000

2000‒01

138,000

51,000

189,000

2001‒02

97,985

93,010

190,995

2002‒03

105,885

117,138

223,023

2003‒04

122,419

136,657

259,076

2004‒05

159,242

128,513

287,755

2005‒06

203,481

110,319

313,800

2006‒07

239,431

109,638

349,069

Figure

At KDS, the container traffic increased from 121,000 teus to 147,000 teus during 1995‒96 to 1999‒00 and then it reduced to 97,985 teus in 2001‒02. This was a consequence of reduction in containerisable traffic at KDS between 1999‒00 to 2001‒02. At HDC, the container traffic increased from 4,000 teus in 1995‒96 to 93,010 teus in 2001‒02.

During 2001‒02 to 2006‒07, at KDS the container traffic increased from 97,985 teus to 239,431 teus. At HDC, it increased from 93,010 teus to 128,513 teus in 2004‒05 and then reduced to 109,638 teus in 2006‒07. The contribution of KDS to total KoPT container traffic reduced from 97% in 1995‒96 to 51% in 2001‒02 and increased to 69% in 2006‒07.

According to some reports 1 , this was due to a deliberate policy of KoPT. The authority had felt that Haldia being a bulk handling port should concentrate on bulk items and its berths should not remain occupied by smaller container vessels to force much larger bulk carriers into pre-berthing detention. Instead, the Kolkata dock, where bigger vessels could not come because of the draft restriction, should concentrate on containers. Both Birganj ICD in Nepal and Amingaon ICD in Guwahati, therefore, had been delinked from Haldia and linked to the CONCOR’s terminal at KDS.

Number of Ships

Year

KDS

HDC

KoPT

1995‒96

812

836

1,648

1996‒97

877

946

1,823

1997‒98

1,010

1,275

2,285

1998‒99

1,042

1,321

2,363

1999‒00

937

1,285

2,222

2000‒01

728

1,443

2,171

2001‒02

669

1,573

2,242

2002‒03

719

1,672

2,391

2003‒04

765

1,840

2,605

2004‒05

767

2,086

2,853

2005‒06

777

2,348

3,125

2006‒07

904

2,300

3,204

Figure

At KDS, the number of ships increased from 812 in 1995‒96 to 1,042 in 1998‒99 and then reduced to 669 in 2001‒02, while at HDC it increased from 836 in 1995‒96 to 1,573 in 2001‒02.

At KDS, the number of ships increased from 669 in 2001‒02 to 904 in 2006‒07, while at HDC it increased from 1,573 to 2,300.

The contribution of KDS to the total number of ships handled at KoPT reduced from 49% in 1995‒96 to 30% in 2001‒02 and further reduced to 28% in 2006‒07. At 3,204 ships, KoPT had handled the largest number of ships in 2006‒07 among all major ports of India.

Traffic Characteristics of KDS and HDC, and Major Ports

Port

Units

1995‒96

2001‒02

2006‒07

Kolkata Dock System

    Total cargo

(mt)

6.1

5.4

12.6

    Containers

(‘000 teus)

121

138

 240

    No of ships

(Nos)

812

669

904

Haldia Dock Complex

    Total cargo

(mt)

15.4

15.1

42.5

    Containers

(‘000 teus)

4

93

 110

    No of ships

(Nos)

836

1573

2300

Paradip Port

    Total cargo

(mt)

11.3

21.1

38.5

    Containers

(‘000 teus)

0

0

2

    No of ships

(Nos)

550

928

1452

Visakhapatnam Port

    Total cargo

(mt)

32.8

44.3

56.4

    Containers

(‘000 teus)

8

22

56

    No of ships

(Nos)

1390

1634

2099

Ennore Port 

    Total cargo

(mt)

0.0

3.4

10.7

    Containers

(‘000 Teus)

0

0

0

    No of ships

(Nos)

0

0

201

Chennai Port 

    Total cargo

(mt)

30.7

36.1

53.4

    Containers

(‘000 teus)

227

344

798

    No of ships

(Nos)

1664

1606

2059

Tuticorin Port

    Total cargo

(mt)

9.3

13.0

18.7

    Containers

(‘000 teus)

69

214

377

    No of ships

(Nos)

939

1421

1533

Cochin Port

    Total cargo

(mt)

11.5

12.0

15.3

    Containers

(‘000 teus)

96

152

227

    No of Ships

(Nos)

924

1190

1176

New Mangalore Port

    Total cargo

(mt)

8.8

17.5

32.0

    Containers

(‘000 teus)

0

4

17

    No of ships

(Nos)

507

772

1039

Mormugao Port

    Total cargo

(mt)

18.1

22.9

34.2

    Containers

(‘000 teus)

2

6

12

    No of ships

(Nos)

699

597

699

Mumbai Port

    Total cargo

(mt)

34.1

26.4

52.4

    Containers

(‘000 teus)

518

254

138

    No of ships

(Nos)

2563

1796

2236

JNPT Port

    Total cargo

(mt)

6.8

22.5

44.8

    Containers

(‘000 teus)

339

1573

3299

    No of ships

(Nos)

543

1265

2775

Kandla Port

    Total cargo

(mt)

30.3

37.7

52.9

    Containers

(‘000 teus)

65

126

177

    No of ships

(Nos)

1469

1672

2318

Source: Major Ports of India – A Profile, IPA, Various Years, 2007

Exhibit 6: Operational Performance

Average Pre Berthing Detention

(days)

Year

KDS

HDC

KoPT

1995‒96

0.53

1.49

1.01

1996‒97

0.15

0.69

0.43

1997‒98

1.10

2.00

1.60

1998‒99

1.00

1.30

1.17

1999‒00

1.03

1.61

1.37

2000‒01

0.61

0.91

0.80

2001‒02

0.58

0.91

0.81

2002‒03

0.52

0.87

0.76

2003‒04

0.51

0.97

0.83

2004‒05

0.40

1.36

1.10

2005‒06

0.40

2.16

1.72

2006‒07

0.39

1.98

1.53

Figure

At KDS, the pre berthing detention reduced from 0.53 days in 1995‒96 to 0.15 days in 1996‒97 and then it increased to 1.03 days in 1999‒00, which reduced to 0.58 days in 2001‒02. At HDC, it reduced from 1.49 days in 1995‒96 to 0.69 days in 1996‒97 and then increased to 2.00 days in 1997‒98 and again reduced to 0.91 days in 2001‒02.

At KDS, the pre berthing detention reduced from 0.58 days in 2001‒02 to 0.39 days in 2006‒07. At HDC, it reduced from 0.91 days in 2001‒02 to 0.87 days in 2002‒03 and then increased to 2.16 days in 2005‒06 and then it reduced to 1.98 days in 2006‒07.

Average Turnaround Time of Ships

(days)

Year

KDS

HDC

KoPT

1995‒96

5.23

4.54

4.88

1996‒97

4.50

3.30

3.88

1997‒98

7.40

5.30

6.22

1998‒99

6.70

4.70

5.58

1999‒00

6.59

5.21

5.79

2000‒01

5.50

3.96

4.48

2001‒02

4.71

4.01

4.21

2002‒03

4.47

3.02

3.46

2003‒04

4.29

2.87

3.29

2004‒05

4.17

3.00

3.31

2005‒06

4.12

4.00

4.03

2006‒07

3.89

3.97

3.95

Figure

At KDS, average turnaround time of ships increased from 5.23 days in 1995‒96 to 7.40 days in 1997‒98, and then it reduced to 4.71 days in 2001‒02. At HDC, it increased from 4.54 days in 1995‒96 to 5.30 days in 1997‒98 and then it reduced to 4.01 days in 2001‒02.

At KDS, average turnaround time of ships reduced from 4.71 days in 2001‒02 to 3.89 days in 2006‒07. At HDC, it reduced from 4.01 days to 2.87 days in 2003‒04 and then increased to 3.97 days in 2006‒07.

In terms of pre berthing detention and turnaround time of ships, there was an improvement in performance in 1999‒00 and 2001‒02, attributable to a reduction in traffic. The performance continued improving at KDS until 2006‒07, though at HDC, it worsened in the couple of years preceding 2005‒06 due to increased traffic and consequent congestion. The average output per ship day has being consistently improving both at KDS and HDC from 1997‒98 until 2006‒07.

Average Output per Ship Day

(tons)

Year

KDS

HDC

1995‒96

1164

5842

1996‒97

1168

6007

1997‒98

1325

5590

1998‒99

1697

5282

1999‒00

2157

5599

2000‒01

2305

6384

2001‒02

2215

6207

2002‒03

2889

7531

2003‒04

3384

8388

2004‒05

3771

8395

2005‒06

3984

8755

2006‒07

4490

8770

Figure

At KDS, average output per ship day increased from 1164 tons in 1995‒96 to 2215 tons in 2001‒02. At HDC, it increased from 5842 tons in 1995‒96 to 6007 tons in 1996‒97 and then it reduced to 5599 tons in 1999‒00 and then again increased to 6207 tons in 2001‒02.

At KDS, average output per ship day increased from 2215 tons in 2001‒02 to 4490 tons in 2006‒07. At HDC, it increased from 6207 tons in 2001‒02 to 8770 tons in 2006‒07.

Source: Major Ports of India – A Profile, IPA, Various Years, 2007

Exhibit 7: Financial Performance

(Rs cr)

Year

Total Income

Total Expenditure

Net Surplus

1995‒96

488.54

403.89

84.65

1996‒97

593.15

449.89

143.26

1997‒98

740.81

567.34

173.47

1998‒99

961.85

865.83

96.02

1999‒00

874.44

830.80

43.64

2000‒01

1027.97

1035.50

-7.53

2001‒02

1066.00

945.63

120.37

2002‒03

927.20

831.81

95.39

2003‒04

1010.39

897.11

113.28

2004‒05

1062.36

877.10

185.26

2005‒06

1210.00

939.00

270.00

2006‒07

1396.85

931.74

465.11

Figure

From 1995‒96, the total income was increasing but at the same time, the total expenditure was also increasing. The total expenditure outpaced the total income in 2000‒01 and that’s when the port observed a loss of Rs 7.5 cr. After 2000‒01, the port performance improved significantly and reached a net surplus of Rs 465.1 cr in 2006‒07. This was due to an increasing income, with expenditure remaining nearly constant.

Source: Major Ports of India – A Profile, IPA, Various Years, 2007

Operating Income

(Rs cr)

Major heads

2001‒02

2002‒03

2003‒04

2004‒05

2005‒06

2006‒07

Cargo handling and storage charges

334.2

382.8

397.4

410.3

462.2

485.2

Port and dock charges

706.3

375.2

435.2

445.3

462.9

592.5

Railway earnings

36.9

43.7

47.8

48.3

55.1

55.1

Estate rentals

69.3

73.5

76.5

102.9

137.9

139.2

Total

1146.7

875.2

956.9

1006.8

1118.1

1272.0

As can be observed from the above table, the cargo earnings increased from 2001‒02 to 2006‒07. The port and dock charges saw a major downfall from 2001‒02 to 2002‒03. These charges included pilotage fees, dry dock charges, berth hire charges and reimbursement of central government for dredging and maintenance of the river. The central government reimbursement did not come through due to deviation in the norms for dredging works. There was an increase in the railway earnings from 2001‒02 to 2006‒07. The earnings from estate rentals nearly doubled during this period.

Source: Kolkata Port Trust, 2007

Exhibit 8: 11th Five Year Plan and National Maritime Development Program

KoPT port had investments planned from the 11th Five Year Plan (2007‒08 to 2011‒12) and subsequently from the NMDP of National Maritime Policy for selected projects of the port.

11th Five Year Plan
Traffic Projections

(mt)

2007‒08

2008‒09

2009‒10

2010‒11

2011‒12

KDS

8.32

9.15

10.10

11.10

13.43

HDC

34.60

36.80

39.15

41.35

44.50

Capacity Enhancement Proposed

(mt)

Existing Capacity (2006‒07)

Proposed Capacity (2011‒12)

KDS

12.60

31.45

HDC

42.20

63.40

Outlay

(Rs cr)

11th Plan Outlay

Internal Resource

General Budgetary Support

Extra Budgetary Resources and Others

Private

Total

KDS

397.63

260.13

130.00

7.50

2590.70

2988.33

HDC

279.40

279.40

-

-

547.37

826.77

RR schemes

421.00

-

421.00

-

-

421.00

Source: 11th Five Year Plan, Planning Commission, 2007

National Maritime Development Program

Kolkata Port had proposed its investment plan, separately for Kolkata Dock System and Haldia Dock Complex. The summarized details for the horizon year of 2011‒2012 are given as under:

Traffic Projections

(mt)

2004‒05

2005‒06

2006‒07

2007‒08

2008‒09

2009‒10

2010‒11

2011‒12

KDS

9.96

10.40

10.88

11.38

11.90

12.44

13.01

13.60

HDC

36.26

37.98

39.78

41.67

43.64

45.71

47.88

50.15

Capacity Enhancement Proposed

(mt)

Existing Capacity (31-03-2005)

Proposed Capacity (2011‒12)

KDS

9.80

17.68

HDC

34.10

65.20

Investments Planned

(Rs cr)

Project Head

Projects (Nos)

Budgetary

Support

Internal

Resources

Private

Investment

Others

Total

Deepening of channels/berths, etc

KDS

1

385

0

0

0

385

HDC

0

0

0

0

0

0

Construction/

reconstruction of berths/jetties, etc

KDS

6

550

247

2290

0

3087

HDC

5

0

77

235

0

311

Procurement of equipments, etc

KDS

4

0

155

46

130

331

HDC

5

0

96

150

0

246

Rail and road connectivity works

KDS

0

0

0

0

0

0

HDC

0

0

0

0

0

0

Others

KDS

14

0

172

1327

0

1499

HDC

5

225

250

160

0

635

Total

KDS

25

935

574

3663

130

5327

HDC

15

225

423

545

0

1208

Total

KoPT

40

1160

997

4208

130

6535

Source: National Maritime Development Program, Department of Shipping, MoSRTH, 2006

Appendix 1: Kolkata Port Developments in News: June 2003 to May 2007

1. Kolkata Port Trust: Rising Above The Water
The Financial Express, June 21, 2003

Till just a few years back, Kolkata Port Trust (KoPT) was neck deep under water. The situation declined to such a level that KoPT had to close down the Kidderpore-II dock of the Kolkata Dock System (KDS) in February 2002 due to lack of shipping activities. There were a number of reasons for the declining performance. The port charges were high. The turn-round time for visiting ships both at its Haldia Dock Complex (HDC) and KDS was more than many other ports. It was not only because that KDS on the River Hooghly was 232 km away from the sea and HDC on the River Haldi 115 km away. The low level of mechanisation and productivity, particularly at KDS, also contributed to higher turn-round time and port charges. The port users also often complained about “not-so-user-friendly” behaviour of a section of KoPT officials.

All this was crippling the Trust in taking any major investment decision for mechanisation of its existing berths. Huge workforce, particularly in KDS, also hindered the process of mechanisation. They opposed any major mechanisation drive fearing job cut. Even then, KoPT management could reduce the manpower at KDS considerably over the years – from 40,000 in 1976‒77 to 8,148 as on March 31, 2003. However, being a newer port, the situation at HDC was never that bad. “We have very clearly identified the weaknesses and the strengths. To us, the management and the employees of KoPT, the issues are how to change the situation, how to convert the difficulties into opportunities and utilise our strengths to become competitive,” said KoPT chairman Anup K Chanda.

Identifying Priorities

“Being a service provider, we made it clear to ourselves that KoPT cannot afford to ignore the problems of port users. After all, they are our ‘Laxmi’ (the goddess of wealth). So, as part of our multi-pronged strategy, we took measures to address their grievances and reduce port charges,” Dr Chanda added.

Hence, the port had formed four groups. The marketing group and the trade relations group were set up for direct interaction with port users with an aim to bring back old customers and attract more traffic. The business development group was set up to identify potential revenue generation area while the customer relations cell is entrusted to act as a single window agency for the port users who for their export-import activities need to obtain lot of clearances from various agencies.

The trust has cut the container rate up to 60% at inland container depot (ICD). The Calcutta Dock Labour Board also reduced handling charges from Rs 1,525 to Rs 500 per container to attract ICD traffic. KoPT offered special packages for pulses and log traffic. KDS rationalised tariff to enhance its competitive edge. They included reduction in box rate for container carrying waste paper, newsprint, vegetable oil, iron and steel, tin plate, jute and jute products and tea, and reduction in wharfage of wheat, rice, rock phosphate, sulphur, fertiliser etc.

Sowing Dividends

“All these steps taken by us paid dividend. We got back many of our old users. The traffic both at KDS and HDC had increased considerably during the last fiscal resulting in a higher net surplus,” claimed Dr Chanda. In 2002‒03, KoPT ranked third among the major ports by handling 35.75 million tonne (mt) of cargo, an all-time record and 5.35 mt more than the previous fiscal. The share of KoPT in total tariff of Indian major ports increased 11.41% from 10.57% in 2001‒02. Its net surplus increased by 59% from Rs 120.30 cr in 2001‒02 to Rs 191.30 cr.

On the other hand, KoPT revamped or reopened some of its existing infrastructure last fiscal. For example, the Kidderpore dock-II was reopened in January this year. This helped KDS to handle food grain export to Bangladesh for the first time in its history.

To improve the rail connectivity to three transit sheds of this dock, KoPT upgraded the railway tracks with the support of the railways. Similarly, the movement of railway-borne Nepal cargo, which stopped in 1998, had been resumed by March, 2003. KDS expects to handle over 2.5 lakh tonnes of food grains to Bangladesh and 1.25 lakh tonne rail-borne Nepal cargo every year.

The average pre-berthing detention (PBD) time of vessels at KDS was reduced to 0.003 days, the lowest in the country. “The turn-round time both at HDC and KDS will reduce substantially if exports up,” said Dr Chanda. The West Bengal government has announced that the state’s share in national export would go up to 9% by 2007. If a large chunk of this possible export grows in non-IT (Information Technology) area, the waiting time of the vessels for export items is bound to decline, provided there is no congestion.

New Plans

During 2003‒04, KoPT plans to procure two mobile harbour cranes and two reach stakers on “own, operate and maintain” basis for augmenting container handling at KDS. This would enable 20-hrs operations compared to 6‒7 hrs in case of vessel cranes used now, thus reducing the turn-round time of the vessels and the handling cost. KoPT has already announced special packages for Andaman bound vessels, which provides 40% concession in container, 50% for sand and 10% for general cargo to make use of the growing construction activities in these islands on the Bay of Bengal.

As for the long term plans, KoPT is exploring new possibilities for all-weather lighterage facility at Sandheads with the support of Indian Oil Corp (IOC). At Sandheads, even ultra large crude carriers (ULCCs) with a capacity of 500,000 DWT, can call in. The ULCCs cannot visit in any other port on the eastern cost as the required draft for them is not available there. At present, the lighterage is done using “alongside mode” in which low capacity vessels are placed on the side of the large vessels. This mode cannot be utilised in stormy weathers as the possibility of clashes between the large and the small vessels are very high. Hence, in line with the method practiced at the North Sea ports, where weather is similar to that of at Sandheads, IOC has proposed to experiment with the “tandem mode”. In this mode, smaller vessels are placed behind the VLCC. It reduces the possibility of two vessels clashing in the stormy weather and, hence, can be used throughout the year.

“If this experiment succeeds, Sandheads would become the nodal point for crude transhipment even for other east cost ports and the transportation cost for crude petroleum would reduce considerably,” said Dr Chanda.

For carrying crude ocean freight constitutes 95% of the transportation cost while port charges constitute only 5%. Since VLCCs would provide economy of scale in transportation the cost would go down, which would benefit the crude importers like IOC. However, if the experiment fails, there is every possibility that IOC would go for Rs 1100-cr Paradip-Rourkela pipe line project. In such case, the oil jetties developed by KoPT for importing crude would become idle, KoPT insiders apprehend.

KoPT also intends to play a big role in coastal shipping and also to make KDS a hub for inland waterway transportation. The work of the virtual jetty at Saugor, which is closer to the sea than KDS and HDC, will be commissioned by March 2004.

The KoPT chairman said the talks are on with Concor for setting up a container terminal of international standard.

2. Drop in Haldia’s Rail Movement of Containers
The Hindu Business Line, June 29, 2006

Declining throughput, transportation thru roads cited as major causes

Kolkata, June 28

Rail movement of containers to and from Haldia has dropped for several reasons. First, the container throughput of Haldia dock is showing a declining trend. In 2005‒06, the throughput was about 110,000 teus as compared to about 128,000 teus in 2004‒05. In April-June this year, the throughput was around 16,000 teus as compared to more than 18,000 teus in the same period last year.

This could not have happened without the deliberate policy of the Kolkata Port Trust authorities. The authorities feel that Haldia being a bulk handling port should concentrate on bulk items and its berths should not remain occupied by smaller container vessels to force much larger bulk carriers into pre berthing detention. Instead, the Kolkata Dock System (KDS), where big vessels cannot come because of the draft problem, should concentrate on containers. Both Birganj ICD in Nepal and the Amingaon ICD in Guwahati, therefore, have been delinked from Haldia. These ICDs are now linked to the Container Corporation of India’s terminal at the KDS.

Earlier, Haldia dock used to handle entire tea shipments routed through Amingaon ICD, but not any more.

Second, road transportation is preferred to rail transportation for evacuation of boxes out of the dock. For example, the Nepal cargo. Even now, the dock handles on an average 400 import containers for Nepal every month. However, these boxes are transported to Nepal by road. This is because Concor insists on full rake formation and at least 60 containers are needed to form a full rake. However, the 400 boxes arrive in small dribble insufficient to form a full rake. “We place the rake whenever there are enough containers to form a rake,” say container sources, pointing out that one rake was placed every month for the past two months.

Third, even the number of containers handled by Concor for domestic movement has dropped sharply. The Japanese firm, which earlier used to utilise Concor’s services for transportation of its products from Haldia to Nagpur and Hyderabad no longer uses the services. The shipments to Nagpur are undertaken by road, while those to Hyderabad are entirely by road from Haldia to Shalimar and from there by rail.

3. Rationalisation of Tariffs’ Put Wind in KoPT Sails
The Hindu Business Line, Sept 18, 2006

We offered massive tariff concessions for items with negligible throughput. This sent the message that the port meant business and a lot of interest was generated in the trade. Dr A K Chanda, Chairman. Kolkata Port Trust

Figure

Dr A K Chanda, a 1976 batch IAS officer belonging to the West Bengal cadre, joined the Kolkata Port Trust as its Chairman in June 2002. In an interview to Business Line recently, Dr Chanda discussed at length various issues facing the country’s oldest port.

How would you describe your experience the past four years?

You may call it a period of relentless effort to turn around a much maligned port and the effort is still on.

Could you explain a little?

When I joined, the Kolkata Dock System (KDS), one of the two dock systems of the Kolkata port — the other being Haldia dock — had been written off. In fact, Kidderpore Dock II under KDS was officially closed and Kidderpore Dock I virtually abandoned. Then there was a host of problems such as huge arrears on pension and wage accounts, and therefore, an unhappy workforce; low productivity; obsolete equipment; poor navigability of the Hooghly river; and as a cumulative effect of all this a high transaction cost. The list can be fairly long.

How did you handle all these?

Top priority was accorded to increasing revenues. But, then, it was a Hobson’s choice. If you revised the tariffs upwards to earn more revenues, the KDS, already an expensive dock system would become even more costly. If the tariffs were lowered, the trade would be happy but the port’s income would suffer, at least for some time. So, we started with rationalization of tariffs.

We looked at the various types of commodities and the volumes handled at the KDS and offered massive tariff concessions for those items for which throughputs were either negligible or nil. We achieved two objectives: First, the revenue loss was almost nil but, more important, we sent the message across that the port authorities meant business and a lot of interest was generated among the trade.

You announced massive rate concessions for container traffic at the KDS, didn’t you?

In respect of container traffic, the KDS has a unique system. Unlike other ports where box rates are charged, here we’ve commodity specific rates. We found there were 70 types of commodities handled in containers with as many rates. We rationalised the rates of 55. We constituted several groups of port officers, such as trade relations group, marketing group, customer relations group and the business development group. While the first three teams concentrated on how to step up revenue earning through our existing operations, the last was asked to explore new non cargo related opportunities.

Any success…

With some success.

How?

You know that Kolkata, like Mumbai, is an old port with huge land area. However, our earning from real estate was negligible compared to the size of property we have. A special drive pushed up our earnings from Rs 18 crore to about Rs 120 crore annually and it will increase further.

Also, the KDS has five dry docks — three at Kidderpore and two at the Netaji Subhas dock. We’ve revamped their operation and rationalised the rates in such a way that outside vessels (that is, not belonging to the port) queue up for repairs. The experiment has been a success. We’ve completely renovated our hospital. We have appointed eminent medical practitioners on contract, the facilities have been augmented and upgraded and we’re planning to throw the hospital open to general public on payment. The port employees, of course, will continue to get their treatment free of cost. We’ve plans to start training programmes for nurses and paramedical staff.

Our hydraulic study department has started undertaking consultancy work for various government agencies. We want the marine and port engineering departments too to undertake similar consultancy services.

There have been reports that the KoPT is planning to promote cruise in the Hooghly river as also along the coast. Is it so?

Absolutely, and why not? After all, the Hooghly river, as also the east coast, holds the promise of cruise tourism. We’ve invited global bids. We’ve allotted a plot of land on the waterfront in the KDS to a private river transport company to set up a terminal for small cruise boats.

What about your rail operations? Earlier, there were plans to give it up altogether…

I will not comment on the earlier plan to close down the rail operation by the port. But we’ve now reversed the decision and perhaps rightly so. In a mega polis like Kolkata, there are limits to the road network. Only six per cent of the city area has arterial roads. In such a situation, relying on road to promote traffic for the port certainly cannot not be a step in the right direction. Besides, rail movement is any day cheaper than by road. But, then, the job of revamping the rail system has not been easy. Over long stretches, there were no lines; also the locomotives were in a bad shape. I got a lot of help from the Eastern Railway to revamp the system.

What about Haldia, your other dock system?

Haldia is the most vibrant dock of the Kolkata port; it is our mainstay, accounting for the bulk of the total volume of traffic handled by the port and, therefore, the large chunk of the revenue. The challenge there is to maintain the day to day operation in the most efficient manner. But, then, Haldia too has a problem.

What is that?

The problem of capacity constraint. The present berths are not enough to handle the projected growth of traffic at Haldia. We are, therefore, constructing two berths inside the dock and two outside, on the river front. With the commissioning of Paradip-Haldia crude pipeline Haldia will stand to lose a chunk of the crude traffic. We must attract new cargo to compensate the loss.

Are you happy with the level of productivity?

I am not unhappy at the level of improvement achieved in the past few years. There is no point blaming the workers for poor productivity. The labour must be aided with capital. The advantage of technology must be taken to improve their productivity. That is exactly what we are doing. We’re installing new cranes, new handling equipment to improve productivity of our workers. All these would not have been possible without the excellent cooperation I have received from all sections of employees, particularly the unions.

What is your biggest issue?

I’ll prefer to call it priority. The poor navigability of the Hooghly continues to be the major concern to the port authorities. Therefore, we’ve to move both southward and northward along the Hooghly river — southward for some deeper draught location closer to the sea and northward to exploit the opportunities for the IWT traffic. There is no dearth of business.

4. Superb Show by KoPT
Doond – Port News, May 8, 2007

Joining the select 50 mt port Club, the Kolkata Port has handled an all time high 55.05 mt of cargo in 2006‒07. During 2006‒07, the 136 years old facility achieved a number of performance landmarks. The Port also continued to rank second in terms of cargo throughput among the Major Ports for the third consecutive year, coming in just behind Visakhapatnam Port (56.386 mt).

The Kolkata Dock System (KDS), which comes under Kolkata Port Trust (KoPT), handled an all time record throughput of 12.596 mt in 2006‒07, surpassing the previous record of 11.063 mt in 1964‒65 [before commissioning of the Haldia Dock Complex (HDC)]. The growth registered by KDS was as high as 16.56%.

Even after commissioning of the HDC, the combined traffic of Kolkata Port was less than 12.596 mt up to 1986‒87. During the five year period from 2001‒02 to 2006‒07, Kolkata Port registered an increase of 24.65 mt of cargo. This was the second highest absolute growth of traffic among the Major Ports. Inland water traffic at KDS increased to 8.63 lakh tons in 2006‒07 from 5.43 lakh tons in 2005‒06, a whopping 59% growth.

Surge in Container Traffic

Kolkata Port handled 349,072 teus in 2006‒07, as against 313,800 teus in 2005‒06, registering a growth of 11.24%. It was ranked third amongst the Major Ports in terms of containerized tonnage handled. Of the 349,072 teus, KDS alone contributed 239,431 teus in 2006‒07, as against 203,481 teus in the previous fiscal, which translated into a 17.7% increase.

In 2006‒07, the Port handled the highest number of ships among the Major Ports – 3,204. The 2005‒06 figure was 3,125.

Spending on Plan Schemes

With regard to expenditure on plan schemes, the Port (both KDS and HDC) surpassed the approved Plan outlay. The Plan expenditure was Rs 71.99 cr (approx.), as against an outlay of Rs 50.04 cr. The overall Plan fund utilisation of KoPT was 143.86%, the second highest among major ports.

The plan expenditure of KDS was Rs 15.52 cr, as against an outlay of Rs 5.03 cr (308.5% utilisation). For HDC, the plan expenditure was Rs 56.47 cr, as against an outlay of Rs 45 cr (125.5% utilisation).

Robust Finances

The financial position of Kolkata Port improved significantly during 2006‒07, as given below:

  • KoPT registered a net surplus of Rs 426.89 cr, a significant 57.73% rise over the Rs 270.65 cr in 2005‒06.
  • Operating income increased to Rs 1,249.64 cr from Rs 1,118.28 cr in 2005‒06.
  • KoPT recorded a 53.83% rise in operating surplus to Rs 516.73 cr from Rs 335.92 cr in 2005‒06.
  • At KDS, the operating surplus for 2006‒07 was Rs 86.55 cr (19.2% higher than the previous year), while at HDC it was Rs 430.18 cr during the year (63.37% higher than 2005‒06).
Performance Parameters

According to a KoPT release, the Port’s 2006‒07 performance was due to the growth of diverse cargo, improved quality of service, cost effective and customer friendly measures taken by the Port management and cooperation and hard work of all sections of workers, employees and the different agencies associated with the Port.

During the year, not only did the Port record a significant increase in the tonnage handled, it also excelled in all efficiency parameters, such as reduction in turnaround time of vessels, reduction in pre berthing detention, improvement in average ship day output, etc. In fact, productivity (measured in average output per shipday) improved by 12.4 per cent at KDS and 0.14 per cent at HDC when compared to 2005–06.

Modernisation Plans

An ambitious investment programme of Rs 968.67 cr (KDS Rs 268.69 cr, HDC Rs 278.93 cr, RR Rs 421.05 cr) for modernisation, renovation and replacement is currently being implemented.

This encompasses, inter alia, construction of multipurpose berths with improvement in backend facilities; integrated development of infrastructure facilities, including road/rail connectivity; induction of state of the art equipment such as mobile harbour cranes, rail mounted quay cranes, reach stackers, rubber tyred gantry cranes, tractor trailers, etc.; upgradation of VTMS; procurement of survey cum pilotage craft; river regulatory measures for improvement of draught in the Hooghly estuary, etc.

KoPT also has plans to develop two state of the art inland water transport terminals—one each at Kolkata and Haldia—jointly with the IWAI.

The major projects during the 11th five year Plan include:

Kolkata Dock System

  • Construction of three cargo handling jetties at Diamond Harbour at an estimated cost of Rs 360 cr.
  • Transloading of dry bulk cargo at Sandheads and Konica Sand.
  • Development of infrastructure in and around docks and procurement of various cargo/container handling equipment.

Haldia Dock Complex

  • Construction of 2 berths inside the docks (continuing scheme).
  • Construction of 2 riverine jetties.
  • Construction of lay up berths.
  • Procurement of 3 locomotives.
  • Construction of second lock gate.
  • Move towards deeper draught

To address the problem of draught limitations at the existing cargo handling locations of the Port, viz., Kidderpore, Budge Budge, Haldia, and particularly keeping in view the changing scenario in ship technology, both in terms of size and structural pattern, KoPT has been vigorously exploring utilisation of its deep draughted areas southwards at Diamond Harbour, Saugor and Sandheads to cater to the demands of the port and shipping trade.

The plans of the port, therefore, also envisage setting up of cargo handling facilities at deep draughted locations such as Diamond Harbour, Saugor and Sandheads in order to facilitate the expansion and rejuvenation of the Port, the release emphasises.

5. Panel Set up to Look at Augmenting Box Trade at Kolkata Port
The Economic Times, May 28, 2007

MUMBAI: Ministry of shipping has constituted a high powered five-member committee, under the chairmanship of Capt PVK Mohan, the senior most member of National Shipping Board, to go into the developmental aspects of containerization in Haldia and Kolkata Port. The panel, which was constituted early last week, has been asked to explore ways and means to harness the tremendous growth that is happening in and around Kolkata and the eastern sector.

The panel has been asked to recommend both short term and long term developmental plans for both Haldia and Kolkata Port. It will have to look at Kolkata and Haldia as a whole, in all aspects of cargo. “The main focus is to eventually make sure that container trade does not suffer and really pick up,” he said.

Besides Capt Mohan, the five member panel consists of S Hajara, CMD of (SCI), joint director general of shipping, regional general manager of SCI, Kolkata, principal officer of MMD, Kolkata. Kolkata Port chairman is an ex officio member of the committee. The panel needs to explore areas to increase container traffic at Haldia and Kolkata, to identify problems and bottlenecks at Kolkata. More importantly, it has also been asked to study the prospects of setting up a dedicated container terminal at Diamond Harbour.

“We can co opt anybody from railways or state government as required to come out with a comprehensive developmental policy. We hope to finish the exercise in three months,” Capt Mohan said.

“If you take Haldia dock system and kalkota port separately, in Haldia, you will find that container volumes are actually coming down, whereas in rest of the world it is growing up. We have to study why this is happening, and what can be done to meet up new demands due to industries that are coming up not only in east coast but also in north east,” said capt Mohan.

It is understood that port department in the shipping ministry is seized of the matter that Kolkata Port has become the No 2 port in the country, which shows that there is phenomenon growth even in containers.

As such the ministry is working very seriously on inland waterways transport (IWT) programme, including National Waterways No 1 and No 2.

According to sources close to the ministry, the minister has a proactive policy towards IWT, which has been neglected for so many years. Once that picks up there will be tremendous pressure on Kolkata, which the gateway port. If we don’t take note of that now, then the Kolkata system will collapse. “We do not want that to happen. The minister wants the region to develop well in time so as to take advantage of the surge in cargo,” he said.

According to Capt Mohan, shipping ministry is keen to look at green field projects like having a container terminal at Diamond Harbour, deep water port near Sagar or Kulpi. It is willing to look at any project. “Once you release some cargo from say Haldia, you will have more infrastructures to service the surging trade,” he said.

Capt Mohan, who has completed a decade of association with the Shipping Board, is managing director of Seaways Shipping, Maxicon Shipping Agencies and Seaways

Appendix 2: Excerpts from ‘Development of a Business Plan for Kolkata Port’

The draft business plan of KoPT, prepared by Royal Haskoning and Crisil in April 2007, takes a comprehensive stock of current relevant aspects: infrastructure, potential opportunities, competitive position, capacity and bottleneck analysis. These elements have been exhaustively analyzed for their potential to attract investments in today’s buoyant economic scenario… The plan is well substantiated by a viable financial model which generates and reflects the combined effect of required development initiatives, existing financials of the port and relative performance of other major ports.

Based on a SWOT analysis carried out by consultants along with the management of KoPT, the following mission statement has been adopted to guide the future development of the port.

‘Kolkata Port will develop as a customer friendly self sustaining port providing integrated quality services to its customers while retaining its position as a major sea-river gateway for the Eastern region of India and neighbouring land locked countries.’

A number of strategic objectives have been drawn up that are in keeping with the mission statement. These are:

  • To exceed a traffic level of 67 mtpa by 2013‒14 and 166 mtpa by 2025‒26.
  • To be amongst the top three major ports of the country in terms of profitability starting by 2010.
  • To offer integrated services with other private players so as to develop KoPT as one of the top ports in the country providing added customer value.
  • The port will try to maximize the use of lighterage and floating storage terminals in short term and deepwater port southwards in conjunction with inland waterway transport to maintain its position as a major gateway for the eastern states and Nepal and Bhutan.
  • To provide operating conditions of the highest quality with high levels of productivity, comparable to any other major port in the country, both at the port level as well at the employee level.

Following measures have been recommended for consideration:

  • Reducing draft limitation so that larger draft vessels can visit the ports of Haldia and Kolkata. This would enable the Shippers to benefit from the lower shipment costs. The draft limitations can be removed by:
    • Implementation of capital dredging scheme integrated with holistic river training measures including possibilities of discharge improvement.
    • Setting up of floating storage terminals/trans-loaders at Sandheads
    • Integrating IWT barges with additional riverside jetties to supplement the traffic growth.
    • Setting up of a deep draft port.
  • Faster turnaround of vessels by:
    • Implementation of productivity improvement
    • Reduction in pre berthing delays
    • Improved pilotage services
    • Removal of night navigation constraints
    • Reduced waiting periods at the entrance to locks
    • faster handling and transfer in the yard area:
      • Improvements in the shore side transfer and storage
      • Efficient truck parking and container yard
      • Efficient railway siding areas.
      • Integrated IWT terminals
  • Decrease in port costs:
    • Rationalization of the organizational structure
    • Decrease in dredging costs
    • Higher throughput levels
    • Reduction in hinterland transport costs

The demand supply gap has been also worked out on the basis of the traffic projections and the existing capacity available at different locations within the KoPT. These figures have been summarized below:

Traffic

Capacity

Existing

Future

Existing

Additional Required

Commodity Type

I/E

2005‒06

2013‒14

Difference (+/-)

2005‒06

2013‒14

A

Liquid Bulk

HDC

KDS

Total

HDC

KDS

Total

HDC

KDS

Total

HDC

KDS

Total

Crude

I

12.52

4.02

16.54

3.98

0.00

3.98

-12.56

15.72

4.80

20.52

-11.74

-4.80

-16.54

POL

I/E

5.17

0.92

6.09

7.98

1.41

9.39

3.30

4.04

3.30

7.34

3.94

-1.89

2.05

Others

I/E

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.50

0.00

0.50

-0.50

0.00

-0.50

Sub-Total

17.69

4.94

22.63

11.96

1.41

13.37

-9.26

20.26

8.10

28.36

-8.30

-6.69

-14.99

B

Dry bulk

Iron ore

E

7.94

0.15

8.09

4.57

0.08

4.65

-3.44

8.00

1.44

9.44

-3.43

-1.36

-4.79

Coal (Thermal)

I/E

4.48

0.03

4.51

10.16

0.08

10.24

5.73

5.00

1.44

6.44

5.16

-1.36

3.80

Coke

I

5.37

0.00

5.37

12.52

0.00

12.52

7.15

6.00

0.00

6.00

6.52

0.00

6.52

Sub-Total

17.79

0.18

17.97

27.25

0.16

27.41

9.44

19.00

2.88

21.88

8.25

-2.72

5.53

C

Containers

1.91

3.23

5.14

5.44

9.39

14.83

9.69

3.00

4.80

7.80

2.44

4.59

7.03

(TEU)

0.11

0.20

0.31

0.45

0.78

1.23

0.92

0.20

0.32

0.52

0.25

0.46

0.71

D

General Cargo*

4.95

2.46

7.41

7.89

3.92

11.81

4.40

0.00

4.32

4.32

7.89

-0.40

7.49

42.34

10.81

53.15

52.54

14.88

67.42

14.27

42.26

20.10

62.36

10.28

-5.22

5.06

* General Cargo at HDC comprises of 70% dry bulk commodities like limestone, manganese ore, rock phosphate, fertilizer, sulphur, soda ash and salt.

The gap for the total handling capacity at HDC by 2013‒14 would be (10.28 +8.3=) 18.58 mtpa. The deficit would be seen in the areas of dry bulk, to the tune of 8.25 mtpa, followed by containers of 2.44 mtpa and general cargo of 7.89 mtpa. Of the general cargo, about 70% is again dry bulk. Thus major capacity enhancement to the tune of 13.73 mtpa would be needed for dry bulk. Various measures were proposed by the consultants to address the above capacity requirements.

The business plan also suggested some other areas of improvement, which could lead to additional revenue generation and streamlining of processes at the port. They were:

1. Land Use Plan

The greatest strength of the port is its physical setting. While it acted as a catalyst in the development of Kolkata as an industrial hub over the past 100 years, it now presents another opportunity of developing itself as a prime contributor to an integrated development through product/commodity specific organized development. It would therefore be appropriate to consider this as a prime source of fund infusion to meet the needs for the expansion of the port facilities downstream of Haldia at the proposed deep water port.

Based on existing stakeholders/prospective clients and prioritized growth sectors, land parcels are identified for modified land use for Tea Processing Park, Food Processing Industry, Apparel Park, Integrated Commercial Development at Strand Road, Barge Construction and Repairing Industry, and River and Coastal Cruise Tourism.

2. IT Initiatives

Since 2004, the Indian Ports Association has been working actively on the establishment of a centralized web based Electronic Data Interchange (EDI) called Port Community System (PCS) for all the major ports of India. The objectives of the PCS are to:

  • Develop a centralized and intelligent electronic message switching facility to and from the community members including Ports, Shipping Lines, Shipping Agents, Terminal Operators, Customs House Agents, Importers/Exporters, Stevedores, CFS, CONCOR, Surveyors, Road Transport Operators, Banks, Insurance, Customs, PHA, Immigration etc.
  • Maintain a centralized database to improve track and trace efficiency and shipment/service visibility.
  • Use the centralized database as a repository for research and analysis.

A large amount of hardware is available with the KoPT. Connectivity is being expanded in both the primary locations. Application software, though generally two tier (three tier for HDC), is functional for regular operational requirements. The following steps are deemed necessary for assuming a position of strategic importance and to achieve operational excellence.

  • Formulation of a clearly articulated IT policy
  • Creation of an IT division with provision for staffing with personnel having hardcore IT skills
  • Enabling eGovernance through Executive Information System and EDI
  • Planning for convergence of applications and technology up-gradations with adequate budgeting
  • Creating a data warehouse so as to be able to build a decision support system
  • Capacity building at all levels to increase awareness and skill levels
  • Providing an interface to all stakeholders with proper workflow and escalations so as to provide for quick response and service

Source: Royal Haskoning (April, 2007). ‘Development of a Business Plan for Kolkata Port,’ (in association with CRISIL).

Appendix 3: Recommendations from the Report on the ‘Improvement of Container Traffic at Kolkata Port’

MoSRTH was concerned about the slow growth rate of containerized cargo at KDS and HDC. The concerns were also more because KoPT was the only gateway to the eastern states, especially to the North Eastern Region. With focus of Government of India on accelerating the development of North Eastern Region, the container traffic and its related problems were the area of concern. The other worrisome aspect was also the north India traffic increasingly using western corridor and thereby creating congestion. Earlier, the north bound cargo, destined for South East Asia and Far East was expected to move from KoPT and to some extent from other ports of east coast, but this did not materialize.

The cargo movement, especially the containerized cargo, had become too polarized in the western region giving rise to unequal development. Containers from the east part of India were moving all the way to west coast, upto JNPT or Mundra. This had put a lot of pressure on the ministry with respect to infrastructure facilities by the stake holders using the port for its export import trade.

The non development of eastern ports, especially KoPT and consequently the increased cost of operation led to higher tariff being charged by the shipping lines. It was a serious matter of concern that the cost of moving a container from Kolkata to Singapore was almost double than the cost of moving a container from Mumbai to Singapore. Considering the growth of industry in the eastern region, government’s ‘Look East Policy,’ and opening up of passages like ‘Nathula Pass’ for trade between India and China by road, KoPT was expected to cater to increasing container cargo and consequently the infrastructure upgradation was required. Operationally also the port was facing serious bottlenecks like high vessel turnaround time and pre berthing detention.

A high powered committee was constituted on 18th May 2007 by the MoSRTH to study various aspects of containerization at KDS and HDC and give recommendations, both short term and long term, to improve the container traffic. The Committee submitted its report in November 2007.

The committee was chaired by Capt PVK Mohan, Member (and subsequently Chairman), National Shipping Board. Other members were Mr S S Hajara, Chairman and Managing Director, Shipping Corporation of India, Mumbai, Mr Lukose Vallatharai, Joint Director General of Shipping, Directorate General of Shipping, Capt L K Panda, Principal Officer, Mercantile Marine Department, and Mr S G Thawani, Regional General Manager, Shipping Corporation of India, Kolkata.

The scope of the study was:

  • Examine reasons for drop in container volumes at Haldia
  • Explore areas of improvement to increase container traffic at Haldia
  • Study infrastructure facilities of handling containers at Kolkata
  • Identify bottlenecks and problems at Kolkata
  • Recommend areas of improvement to enhance growth of container traffic at Kolkata
  • Study prospects of setting up dedicated container terminal at Diamond Harbour
Recommendations for KDS

With respect to the KDS (NSD and KPD) in order to meet the immediate need on a short term basis following measures may be adopted:

  • Port to induct more MHCs in Berth no 2, 3, and 5 NSD (preferably one/berth plus a spare)
  • Port to augment RTGCs, RMGCs and trailers as required for the container berths in accordance with the prescribed scale.
  • Port to acquire modern tugs for efficient ship handling to reduce berthing/un-berthing time as positioning of tugs is a major constraint. This should be addressed immediately by outsourcing the services to start with and at a later stage it should have the services of three modern tugs with adequate bollard pull to meet the needs.
  • Berths and locks to have fenders for protection of locks and ship sides, which is a major source of damage to tugs and ships.
  • Uniform tariff structure for all container berths to be adopted for harmonization and reducing cost for the trade.
  • NSD container terminal to have six gates for speedy evacuation of container traffic, and to avoid congestion in the yard.
  • Trailer parking yard to be commissioned immediately and additional area to be earmarked for expansion. Apart from that, inside the container terminal, the additional land available on the southern side should be paved and developed for this purpose.
  • The mandatory requirements of 0.3 metres trim for all vessels to be abolished.
  • Two shift system for customs work in port to be introduced and eventually leading to 24 x 7 work schedule so as to avoid congestion.
  • Night navigation to be introduced.
  • In case of breakdown of MHCs or such similar shore facilities, vessels should be allowed to work with their own gear, with no restriction, to expedite turnaround time.
  • Intra port shifting on account of port’s requirement should not be charged to the vessels and such shifting should be kept to minimum.
  • The area constituting the Lybian warehouse and unused residential quarters to be cleared to create yard space by demolishing the warehouse and all the buildings in the vicinity.
  • The warehouse at No 2 and No 3 NSD to be demolished to create more yard space for KDS.
  • The entire back up areas for the container terminals and all available areas should be paved on a priority basis for further stacking of containers.
  • Container yard management to be made IT/Enterprise Resource Planning based immediately for better productivity and yard management.
  • Port should expedite strengthening of berth no 7 for installation of MHC at the berth. Necessary civil work must be completed within a time frame of six months.
  • Port to nominate additional two berths for containers, within a time frame of six months.
  • At least three additional CFS are urgently required to meet the present requirements of the trade. The land policy for the Kolkata port may be suitably amended by the ministry to facilitate setting up of such CFS.
  • Special concessions may have to be given to actual port users and providers of support services to quickly create the much needed infrastructure to handle the growing container volumes.
  • Port to evolve a suitable mechanism for early disposal of cargoes of abandoned containers within TAMP stipulated time frame of 75 days. If needed, matter to be taken up with the finance ministry, since port needs custom approval for auction of the goods for such abandoned containers. This process will release much needed space in the docks.
  • Port to have a system of one window clearance for the trade, for various permissions/payments. Port and custom related as well as port railway, so that customers do not have to run around to get various permissions and payments.
  • Kidderpore docks to be used to the maximum.
Recommendations for HDC on a Short Term Basis
  • The present system of lock gate operation needs to be attended to immediately so as to facilitate about eight movements per tide and thereby reduce the waiting period.
  • The port authority to take up the entire container handling operations on their own to obviate the need of private operations and thereby to reduce the THC.
  • Container ships to have priority to avoid undue delays.
  • Additional tugs to be deployed so that the ship’s berthing and un-berthing are not affected inside the HDC. If required outsourcing may be the short term solution.
  • Two berths to be earmarked for container ships and should always be available with a minimum berth length of 300 metres totally.
Long Term Recommendations for Diamond Harbour Port
  • As a long term solution for the entire Kolkata port with respect to container handling and to cater to the increasing demands of the trade, the committee strongly recommends development of a green field container terminal on a priority basis with a minimum quay length of 600 metres at Diamond Harbour.
  • In order to support the berths, necessary yard facilities are essential and therefore the connecting land belonging to Ministry of Defence (MoD)/DGLL/State government may have to be acquired/bartered so as to have adequate stack yard area thereby lessening the congestion.
  • For the purpose of evacuation of containers the transport modes of rail/barges are envisaged to start with, for further rail connectivity to the destinations.
  • Additional railway tracks, approximately 2 km, needs to be laid for connecting to the Diamond Harbour station and thereafter onward connectivity to meet the need ‘as stated in 2 above’.
  • Similarly, IWT/IWAI/Private operators and other such interested bodies will have to be encouraged to facilitate with dedicated barges for evacuation of containers by the riverine passage.
  • An ‘Eastern Express’ project providing connectivity by road is already on the anvil and therefore an early implementation of the project assumes importance.
  • The long outstanding river conservation project needs to be initiated since the draft in the river will ultimately determine the tonnage and type of ships.

Keeping the above frame-work the ministry may appoint consultants to prepare a detailed project report which will form the basis for the global tender to set up a dedicated container terminal on BOT basis. The government shall take all necessary measures to ensure that all the support systems of the government are in place for the container terminals at Diamond Harbour and the end use of the Diamond Harbour project should only be for the purpose of container. All the three berths are to be used exclusively for container ships and should form the basis for a stand alone dedicated container terminal.

Long Term Recommendations for HDC
  • The present system of one lock is allowing only five to six moves per tide. Taking note of the turnaround time and to increase the total number of entries and exits of vessels inside the impounded dock system, it is essential that the second lock gate be in place to meet such required turnaround time and therefore the committee strongly recommends a second lock gate for the HDC.

    The above recommendation assumes greater importance because of the fact that there are several operational constraints in the existing system.

  • There are also proposals for developing riverside jetties at Haldia. It is understood that the same is presently being considered for bulk cargo. Since the turnaround time of a container vessel is much faster vis-à-vis a bulk vessel, it makes economic and logical sense to consider development of container terminals at the river jetty to obviate the problem of navigating the lock gate altogether, therefore the committee recommends at least one riverside jetty of 200 metre length dedicated to container traffic.
  • The biggest problem for Haldia is the draft and the shoaling of the Ballari bar is actually threatening the very existence of HDC. A proposal for capital dredging is pending with the ministry for a very long time and a very urgent action is needed in this regard. The committee recommends expediting the pending proposal.

Long Term Solutions for Kolkata Port

The evacuation of containers by road movement at Kolkata appears to be one of the major bottlenecks. 24 hours movement between the second Hooghly bridge and Kolkata dock will ease this problem to a great extent and this would not hamper the normal traffic since only one kilometre near the Kidderpore tram depot is common between the port traffic and normal traffic. Therefore the committee recommends that a dedicated alternate route be planned from the Kidderpore docks connecting the second Hooghly bridge and the same be open for 24 hours. The Ministry may take up the issue with the state government and MoD (since part of the land belongs to MoD) and bear the expenses for the same.

Source: MoSRTH (November 2007). ‘Improvement of Container Traffic at Kolkata Dock Complex,’ Report of the High Powered Committee, New Delhi.

Note

1. ‘Drop in Haldia’s rail movement of containers’, The Hindu Business Line, June 29, 2006

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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