February 27, 2019

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Jawaharlal Nehru Port Trust-Backbone of Indian Logistics

Jawaharlal Nehru Port Trust

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For the last many decades, Jawaharlal Nehru Port Trust has been serving as the backbone of Indian Logistics Industry. The peninsular coastline of India covers a stretch of about 5560 km which are strategically located on the crucial East-West trade route that links Europe and the Far East.

Mumbai port is one of the oldest port of India, was proving to be inadequate in meeting the cargo handling requirements. Shallowness of the channel, congestion of roads and railways through the Mumbai city, labour problems and over-manning, were ailing the Mumbai Port. As a result, the Port was simply incapable of handling the expanding volume of modern cargo directed to the west coast. Thus Jawaharlal Nehru Port Trust was commissioned in 1998 as a ‘satellite port’ with the purpose of decongesting traffic.

The main objective behind the establishment of JNPT was to overcome the existing deficiencies and anomalies that characterized the Indian port sector. JNPT was equipped with modern container and bulk handling facilities, with a separate terminal dedicated to each type of cargo. The port also enjoyed road connections with 23 inland containers depots as well as with the Konkan, Central and Western railway systems. JNPT was also fortunate to have a relatively young and educated workforce. In terms of port productivity, JNPT presented a mixed picture. In some areas, it seemed to have performed well, towards the end of the 1990s with respect to other Indian ports. In 1995-96, average turnaround time of ships at JNPT was among the higher ones in India, but it progressively declined to 1.96 in 1998-99, the lowest among all major ports

However, JNPT failed to achieve the standards of the other efficient ports of the world, as it could not escape certain inherent shortcomings of the Indian port sector in general.

Equipment Augmentation: 1995-97

In 1995, JNPT undertook the first set of equipment augmenting reform measures to strengthen port facilities. The second set of similar measures was undertaken in 1997.

A New Private Terminal (NSICT), 1999

While equipment augmentation with private participation improved port performance somewhat, the complete private operation of a terminal, with a view to promoting port efficiency and profitability, was also being contemplated at the same time.

As the most modern among the existing Indian ports, and also the one with the least labor problems, JNPT was the natural choice as a test case in such privatization efforts. The World Bank report had also pointed out that success in achieving private collaboration in port operations at JNPT would send out firm signals regarding the government’s commitment to port reforms.

Despite the obstacles better customer service and faster turnaround, NSICT started diverting traffic away from the Jawaharlal Nehru Port Container Terminal (JNPCT) that consequently led to a decline in the latter’s performance, both in terms of volume of traffic as well as efficiency. This made the JNPT authority realize the importance of further capacity augmentation and following up the reforms introduced prior to the establishment of NSICT with more initiatives in order to compete successfully with NSICT.

Reforms in the pipeline

Conversion of the Bulk Terminal into a 3rd Container Terminal

After transferring the handling of liquid cargo to the IOC-BPCL run terminal, in 2002, the JNPT authority issued global tender inviting bids for conversion of the under-utilized dry bulk terminal into a container terminal in order to meet the requirements of the growing container traffic.

New Terminals

Keeping in mind the expanding flow of traffic directed to the port and the projected increase in throughput over the next ten years, macroeconomic and technical studies are being conducted regarding the construction of a fourth terminal on B-O-T basis.

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