Antwerp Port clears decks for role in India projects

Antwerp Port clears decks for role in India projects

Bangalore: The operator of Europe’s second biggest port in Belgium, Antwerp Port Authority, (APA), will participate in the development of port projects in India, a top official said.

“The board of Antwerp Port Authority has recently cleared a plan to participate in India’s port development projects," Raj Khalid, APA’s India representative, said. “We will now start talking to local firms to become part of a consortium that would develop a port, preferably new ports coming up in India’s coastal states. We would be interested in developing a port as a whole and not individual terminals or berths because our expertise and skills lie in managing Antwerp port."

APA’s primary interest in developing a port here is to act as a decision-making entity in the port’s management, he added.

Eddy Bruyninckx, chief executive of APA, had said last year that APA would not take up cargo-handling activities in India’s ports. “As a port authority, we are not involved in cargo handling by ourselves. Cargo handling at Antwerp port is done by private local and global firms who are specialists," he told Mint in May last year.

Antwerp port, on the Scheldt river, is the fifth largest in the world by cargo volumes, handling 189.3 million tonnes (mt) in 2008, at least a third of the 530mt that India’s 12 Union-government owned ports, or so-called major ports, handled in the year to March 2009.

Several of India’s new ports, owned by state governments in Gujarat, Andhra Pradesh, Tamil Nadu, Maharashtra, Orissa and Karnataka, are being developed by private firms because the state governments are strapped for cash.

These ports, referred to as non-major ports, handled 196mt of cargo in the year to March against a capacity of 228mt. The capacity of these ports is being raised to 574mt by 2012. The additional capacity will require an investment of Rs35,933 crore. Of this, 80% or Rs28,664 crore, is expected to come from the private sector, according to the Union shipping ministry.

Like Antwerp port, India’s non-major ports follow the so-called “landlord port model" for development and operations, in which the private sector has a bigger role. In this model, the land and waterfront infrastructure is owned by the government or local authority, while cargo-handling and other essential operations are outsourced to specialist private firms which add their own superstructure, including buildings and equipment.

Unlike the 12 Union government-owned ports where tariffs are set by the regulator Tariff Authority for Major Ports, firms operating private ports in coastal states are free to set their own tariffs. The Union government, which controls the dozen ports, plans to at least double their cargo handling capacity to 1 billion tonnes by 2012 from the current 529mt.

The extra capacity, mainly in the form of additional berths and terminals, will require an investment of close to Rs55,401 crore, of which Rs36,868 crore will come from the private sector and the rest from the internal resources of the ports and government budgetary support, according to the shipping ministry.