Dhaka, Bangladesh, September 2003

1. Restructuring and regulation in the ports sector: Indian experience S SundarDistinguished FellowThe Energy and Resources Institute Dhaka, Bangladesh, September 2003

2. Structure of Ports in India Major Ports • Placed in union list of Indian Constitution • Governed under the Major Port Trust Act, 1963 by the Government of India • Administered by a Board of Trustees

3. ...Structure of Ports in India MinorPorts • Placed in concurrent list of Indian Constitution • Administered under the Indian Ports Act, 1908 by State governments or by State Maritime Boards

4. Institutional Problems • Lacking in commercial approach • Unwieldy management by Trustees with vested interests • Ports viewed as sources of revenue • Powers concentrated in the government

5. Indian port performance • High pre-berthing delay (3.6 days in 1995- 96) • High vessel turn around time (8.3 days in2003-03) • Low equipment utilization• Low labour productivity • High manning scales

6. Reasons for poor performance • Ports not adjusted to changes in cargo categories • Obsolete and poorly maintained equipment • Over staffing • Cumbersome customs procedures • Poor port access facilities • Absence of inter-port and intra-port competition

7. Port reforms toolkit: World bank • Set reforms objectives • Areas for private sector participation • Methods of private sector involvement • Legal and institutional restructuring • Allocating financial risks • Draft ports concession agreements and tender documents • Identify responsibilities for risk allocation, funding, regulation and implementing port reforms • Introduce labor reforms

8. Policy initiatives in India -Objectives • Recognition of the need: - to attract new technologies - to introduce efficiencies and better management practices - to attract PSP - to introduce competition

9. ….Policy initiatives in India • Adoption of landlord port' concept • Decision to corporatise ports • Setting up of Tariff Authority of Major Port (TAMP) • Major ports enabled to set up joint ventures • Acts amended

10. ...Policy initiatives in India 1996Guidelines • Areas for private sector investment identified • Procedure prescribed for inviting private participation • Criteria for evaluation prescribed • Model tender documents and concession agreements formulated • Corporatisation of Ports

11. Labour • Surplus labour to be identified and redeployed • Labour to be taken over with the facility to be indicated in the tender document • Labour taken over by the franchisee to retain a 5-year lien with the Port Trust

12. Labour(contd.) • VRS-Introduced in all ports • Manning scales re-negotiated • Law amended to provide for amalgamation of dock labour ports

13. Other initiatives • Master plan for each port • Upgradation of equipment through public- private investment • Restructuring port facilities

14. Other initiatives (contd.) • Streamlining of port-customs interface • Introduction of EDI • Introduction of Commercial Accounting Practises • Corporatization

15. Policy initiatives in states • BOOT Model • Joint venture for development and operation of an entire port

17. Private Sector participation in non-major ports • Alreadyinvested (in crores of Rs.) • Andhra Pradesh : 40 • Gujarat : 4475 • Maharashtra : 70 • Tamil Nadu : 129 Total4714 • ExpectedInvestment (in crores of Rs.) • Andhra Pradesh : 3357 • Gujarat : 18713 • Maharashtra : 1500 • Tamil Nadu : 3227 Total : 26797

19. Other Results (contd.) • Pre-berthing delay has been reduced to 0.34 days(2002-03) • High vessel turn around time has been reduced to 3.8 days in 2002-03 • Labour force has decreased from approximately 105000 (1995) to 74000 (2001)

20. Thank You