Monday, 22 March 2010

Poor port infrastructure costs India 1400 crore annually, says CAG

Tabled in Parliament last week, a Comptroller and Auditor General of India (CAG) report slams poor infrastructure at ports, saying that this causes annual losses to the country’s maritime trade to the tune of a whopping Rs. 1400 crore. The report, covering a performance audit of the major Port Trusts in India, says that a major overhaul is required to make Indian ports competitive.

Noting that the Government had earmarked almost 56,000 crores for port and berth development under the National Maritime Development Programme, the audit found, nevertheless, that cargo handling services at major ports were inefficient. The majority of berths did not have dedicated facilities essential for fast turnarounds of ships including for major cargoes like containers or dry and liquid bulk. The CAG also says that dredging projects critical for the competitiveness of the ports were neglected, or have otherwise ‘not been effective’. Additionally, poor facilities exist at ports for night navigation. All this ends up in higher berthing delays and extended turnaround times for ships.

Analysts say that the CAG report should not come as a surprise to anybody. Another earlier Government report had underlined poor infrastructure development. "The average turnaround time of major Indian ports was 3.87 days in 2008-09, compared to 10 hours in Hong Kong. This undermines the competitiveness of Indian ports," the report had said. India has 12 major ports: Kandla, Mumbai, Jawaharlal Nehru, Mormugao, New Managalore, Cochin, Kolkata, Haldia, Paradip, Vishakhapatnam, Chennai and Tuticorin; together, they account for almost three quarters of the nation’s cargo traffic.

"Liquid bulk which primarily consisted of petroleum, oil and lubricants, constituting 33 per cent of the total cargo, faced handling inefficiencies due to slow rates of discharge at specialised berths, leading to high turnaround time of vessels," the CAG says, adding that users were shifting to SBMs instead, thus affecting port revenues. In addition, private terminals like at JNPT and Chennai were handling almost 65 percent of the fastest growing segment, containers. Overall, the report says, cargo-handling services at ports were insufficient for quick handling of cargo like liquid bulk, dry bulk and containers.

There are other issues too. Old and underdeveloped sheds that came in the way of optimal storage utilisation caused losses to perishable cargo like foodgrain. There was also, as in Mumbai, a shortage of covered sheds. “Roofless sheds were being allotted for foodgrains. Further, for automobile cargo, the parking areas allotted were far away from the berths, causing inconvenience to users in loading” the report said.

The CAG report remarked that about 55 per cent of equipment available at all ports except JNPT had been used beyond its economic life, resulting in low utilisation as customers tended to use modern privately owned equipment instead. Interestingly, the CAG commented on the way some ports had fudged labour productivity figures. “The entire handling output was attributed to port labour, disregarding the engagement of private labour, which led to misreporting of labour productivity to the Ministry”, the CAG says.


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