In his more than 20 years of heading various public enterprises, L Radhakrishnan has been closely associated with the Indian infrastructure sector. An IAS officer from the 1984 batch and an IIM-Bangalore alumnus, he has been at the helm of ambitious port projects like Vizhinjam International Seaport. In the past, he served on the board of Kochi Port Trust, and as chairman of Kerala Water Authority and principal secretary in the department of water resources, power and ports, Kerala. His latest port of call is Jawaharlal Nehru Port Trust (JNPT). In a free-wheeling chat with R N Bhaskar and Amritha Pillay, the JNPT chairman shares his vision for the mega port, its shortcomings as a public sector company and his ambitious plans for future.
Where is JNPT in your view at present, given the current Indian trade scenario?
JNPT is a critical port for India. Last year, 56.5% of the country’s total volume of container handling was done through JNPT. If this port faces any constraints in terms of linkages to the hinterland, one can imagine the repercussions in terms of export-import trade.
JNPT is the major port on the western coast which can be developed as a transshipment port.Another port which could have become a good transshipment port in view of its location and draft of around 20 metres is Vizhinjam.
Vizhinjam had bid for 5.4 million TEUs (twenty-foot equivalent units) and some players were willing to take it to 6 million TEUs.The project, however, did not take off due to various bidding issues, first involving a Chinese company, and second, prolonged litigation in the second round of bidding.As a result, we are still giving 80% of transshipment revenues to Colombo from Indian exporters and importers.
Mundra and Pipavav have depth, but transshipment ports should ideally be closer to the international shipping lanes frequented by the biggest carriers, without much diversion. Such ships have economies of scale. In order to be competitive, the lowest fuel consumption per TEU becomes important.To be fuel-efficient and competitive, ships have to be very large and this requires a transshipment port to have depth.My dream is to bring big ships or “mother” ships to JNPT and I expect to see it happen in the foreseeable future.
How do you plan to turn JNPT into a transshipment hub?
The depth of the Mumbai-JNPT channel is to be taken to 17 metres in two phases - first to 14 metres and then to 17 metres which will make JNPT a major hub for India-related shipping.
Unfortunately, in today’s hub-and-spoke model, the hub is not in India. The hub is in a foreign country and our importers and exporters are paying avoidable freight and transshipment charges to foreign companies.These charges add 100 US dollars per container of cargo, in addition to the extra freight charges from foreign ports from where only feeder vessels are being sent to Indian ports.
The Indian government envisages JNPT and Kochi to be the hub ports on the west coast and Chennai and Visakhapatnam on the east coast.But Vallarpadam’s scope is limited by the very high cost of dredging and difficulties to go deeper than 14 metres.
Kochi is not a natural port and requires extensive dredging and this gives JNPT the advantage, as our channel does not require much maintenance dredging.
When will the planned dredging project finish?
The dredging for the first phase - it will target 14 metres in depth — should take 25 months from the time the work starts. When the first phase is completed, we should be ready with the DPR (detailed project report) and the necessary clearances to take the work ahead for the second phase, which will target 17 metres.
While a deepened channel will ensure faster evacuation on the water side, land evacuation continues to remain an issue. The Dedicated Freight Corridor (DFC) and the Delhi-Mumbai Industrial Corridor (DMIC) hold key to these plans. What’s your take on this, given Maharashtra’s sluggish progress on this count?
The Delhi-Mumbai Industrial Corridor will be relevant after the coming into existence of the DFC and will add substantially to the demand for the services of JNPT.
The DFC, however, is now being contemplated in two phases: the first one from Vadodara to the National Capital Region; and the second phase from JNPT to Vadodara.
As per the explanations of DFCC officials, this phasing has been necessitated because of delays in land acquisition by Maharashtra as also partly due to the delays in tying up the financing of the project. The Maharashtra government has been kind enough to issue very recently an order constituting a committee headed by the chief secretary to review and monitor the progress of implementation of the DFC project.
The committee comprises Maharashtra’s secretaries and officials concerned, the district collectors concerned with land acquisition for the DFC and DFCC’s senior officials. Well, as JNPT chairman, I am also a member of the committee.I am pinning my hopes on faster progress, in terms of land acquisition and other issues which will need coordination between the DFCC and the state government.As per the current projections, the second phase of the DFC is expected to be completed by December 2016, which is doubtful unless special efforts to accelerate it are ensured.
What might happen if the rail through-put to the DFC does not take place as envisaged?
If rail transportation is not encouraged, say, through competitive and even subsidised pricing and excellent service, there would be huge indirect costs to the economy by way of higher consumption of diesel, to the extent of over four times that of rail transport, if the alternative road transport is resorted to.
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