There is a sense of disquiet within the maritime community in Mumbai on the Union government’s plans for the city’s port. India’s shipping minister Nitin Gadkari last week said that the port will soon stop handling coal and iron ore because it leads to traffic congestion and pollution in the city.
The port, Mumbai’s biggest land owner, will use its excess land for construction of convention centres, parks, setting up passenger service terminals and marina for anchoring private yachts and so on, Gadkari said emphatically, dashing the hopes of real estate firms who were eyeing the land in a space-starved city.
The Union government is also discussing a plan to recast the limits of Mumbai port to help a nearby new port proposed by a unit of Reliance Industries Ltd come up. Rewas Port, an ambitious project of Reliance Logistics and Ports Pvt. Ltd, has been delayed by over five years because Mumbai port was reluctant to let go of a portion of its waters for the new port to bore a shipping channel for its exclusive use.
Mumbai’s reluctance to grant right of way to Rewas could stem from its own existential fears once the new port, fully mechanized with a deep draft (depth), comes up just a few kilometres away. While India needs new port facilities to meet growing demand for moving overseas cargo, they should not be constructed by diluting the importance of older ports such as Mumbai that have played a key role in the overall development of the state of Maharashtra.
The lack of an action plan to expand Mumbai port is aggravated by the absence of facts to back up the case Gadkari is making. For instance, Mumbai port does not handle thermal coal and iron ore at its berths directly. These two cargo are handled at anchorage where ships offload iron ore and thermal coal, which are then taken to end users, mainly power stations, on barges. Out of the 12 million tonnes (mt) of coal and iron ore handled at its anchorage annually, only about 1.7 mt of coal is handled at the port berths. As for iron ore cargo, it is not handled directly at the port’s berths at all.
So, where are the congestion and pollution that Gadkari is referring to? By stating that Mumbai will stop handling coal and iron ore, does Gadkari mean these cargo will not be handled at the anchorage or at the port berths? Because, discontinuing coal and iron ore operations at the anchorage will not only have legal implications but will also lead to revenue loss for Mumbai port. Power stations located in and around Mumbai will have to find an alternative facility to bring their coal cargo, which may add to their generating costs.
Instances abound globally of city ports—be it Singapore, Colombo, Antwerp, Jebel Ali, etc.,—which continue to operate successfully by using their land judiciously for port-related activities which will also generate cargo for the port and by creating rail, road and waterway infrastructure for evacuation of cargo.
Globally, land owned by the ports has been leveraged for optimizing cargo volumes and increasing revenue of ports. It is an established practice globally for ports to allot land for carrying out economic activity, including establishing industry to ensure captive cargo to the port, thereby enhancing the sustainability of that port.
Port lands have also been used to set up special economic zones (SEZ) aimed at encouraging industrial development in and around the port. Ports are generally expected to utilize their land, with port-related activities being given the first priority and activities incidental to the port being treated as secondary in nature. Mumbai can follow this global model without compromising on convention centres, parks, cruise terminals and marine that Gadkari has in mind. Merely banking on liquid cargo, such as petroleum, oil and lubricants—or so-called POL cargo—which currently account for more than 60% of the port’s revenue will not boost its kitty.
In the year to March 2014, Mumbai loaded 59 mt cargo, making it the fourth biggest state-owned port by volumes after Kandla, Paradip and Jawaharlal Nehru ports. Of this, 38 mt was POL cargo.
A vision plan for Mumbai port could also accommodate the views of civil society to use a part of Mumbai’s port land for urban re-generation by creating the much needed public infrastructure, utilities and public spaces that India’s commercial capital is so short of.
Many other great port cities around the world, they argue, have successfully undertaken urban regeneration projects in derelict port and dock areas that have boosted the gross domestic product of not just the city but their countries. London (docklands) and New York (Brooklyn Piers and Navy Yard) are two shining examples. The maritime community in the island city is hoping the government has a workable action plan for the port rather than let it rot through neglect and apathy.
P. Manoj looks at trends in the shipping industry.