Transcript Non-major ports

Container Ports – Key Sector Trends
21st June 2010
Saurabh Suneja
Tel: +91 11 42505163 (D), +91 11 26930117,
+91 9910400494(M), +91 11 26842213 (fax)
Email: [email protected]
This presentation
• Trends: Indian ports, container traffic growth and
drivers
• Capacity outlook: things are looking up
• Constraints: old; more pressing; and some emerging
caution points
2.
Traffic Snapshot (2009-10)
• Port Traffic grew at 10%
between 2004-05 and 2009-10
1000
800
– Traffic at non-major ports grew at by
~7.9% for major ports ~ 14.2%
600
– Commodities: dominant share of POL,
followed by IO, containers and Coal
200
– Growth in major and non-major port
traffic since 2004-05 driven by
Containers (@ 15.8%), PO
Traffic growth
203
202
518
530
400
– Minor ports utilization at 68%
3.
561
0
2007-08
Major P orts
2008-09
2009-10
Minor P orts
Composition for 2009-10
– Traffic growth for major and nonmajor @ 13% between FY 09 and
FY 10
• Capacity utilization levels
peaking for major ports: ~95%
266
POL
Container
POL
Iron Ore
Coal
Other Cargo
Iron Ore
Container traffic: Recent volatility, but strong growth fundamentals
Quarter wise container traffic (MT)
28.00
27.00
26.00
25.00
24.00
23.00
22.00
21.00
Apr-Jun 09
Jul-Sep 09
Oct-Dec 09
Jan-Mar 10
Apr-June 10
• Recent volatility: Low / flat container traffic in 2009, Q1 2010
• Growth fundamentals continue to remain robust
– Growth in merchandise trade (WB expects merchandise exports to grow @
20% and 17% for FY 11 & FY 12 respectively)
– Growth in containerisation
4.
Container traffic: strong outlook
Expected container traffic growth (MT)
250.00
200.00
11.2%
150.00
100.00
50.00
0.00
2008-09
2009-10 (E)
2014-15 (P)
• Expected growth @ 11.2% CAGR to 195 MT by 2014-15
– Although growth not as high as in the past 5 years
• Commodity drivers:
– Imports: capital goods (driven my infrastructure growth)
– Exports: Textiles and food grains
5.
Recent developments – select projects
Select recent projects
and expected
dominant
commodities
• Recent capacities added to minor ports
•Dominated by bulk capacities on the east
coast
Gangavaram: Coal +, 2008
Jaigarh: Bulk (coal +),
Gen, Container
Krishnapatnam: Coal, IO,
2008
Karaikal: Coal +, 2008
6.
Huge capacities planned for non-major, major ports
7.
Select upcoming projects - large capacity expansions
• Large capacity expansions underway: projected addition ~ 700 MT (*as of
July 09)
– Expected both for major and minor ports
– Key drivers: Container demand, coal imports for power gen
– LNG capacities expected in western ports on the back of improved gas grid
• Confidence wrt. projects coming up
– Projects at major ports are at advanced stages of development
– Many minor ports projects at existing ports and capable developers
Mundra: Coal; SPM
Dahej: LNG jetty
Mum: Offshore cont. (Gammon +)
JNPT: 4th cont. term.
Dighi: Coal & cont.
M’goa: Coal & IO
CONTAINERS
BULK
8.
Valarpadam:
Cont. - dev. by
DP World
Dhamra: Coal +
Paradip: Award of IO and
coal terminals
Krishnapatnam: Phase 2 exp
Ennore: Coal terminal
Chennai: 2nd
cont. terminal
(PSA Sical)
Select upcoming projects – PPPAC approval
Container projects in major ports – recent PPPAC approval obtained
JNPT: Standalone Cont.
Handling
New Mangalore: Container
terminal
9.
Paradip: Multipurpose to
handle cargo &
containers
Chennai: Mega Container
Terminal
Tuticorin: North cargo berth
II
Outlook: Project flow expected to look up
• Investments have been already happening on minor ports
– Strong minor ports capacities in Gujarat; AP and Orissa are catching up
• Projects flow for major ports has been subdued for various
administrative reasons
– Delay in finalization of new MCA
– Time taken for clearing tariffs for new projects as per 2008 TAMP guidelines
• But projects flow is looking up
– Projects under process: JNPT 4 under bidding, Chennai mega container
terminal, Tuticorin berth No. 8
– The PPPAC approved 8 projects during Oct 08 – Nov 09 with expected
project costs of INR ~ 11 thousand crores
– 4 projects for INR 4,179 crores under consideration
10.
Non-major ports: growth in share to continue
• Consistent growth in market share: Traffic share grew from around 27%
in 2005-06 to ~ 32% for 2009-10; 11.5% share of non-major ports in container traffic
• Majority of recent capacities in non-major ports
• Rise in expected share beats past forecasts
Share in traffic expected to
grow to 42.2% for 2013-14
Expected share in Capacity
at 36% as per 11th Plan
1200
1000
800
36%
600
400
64%
200
0
11.
Major Ports
2008-09
Non-Major Ports
2013-14
Capacity utilizations to ease
Current and expected capacity utilizations
2008-09
2013-14 (P)
Major ports
~95%
~74%
Non-Major
ports
~68%
~72%
• Overall utilization levels would come down from the present
~85% to ~73%
12.
Minor ports to gain share in container traffic
Container traffic – expected growth (MT)
250.00
195 MT
200.00
Non-major: 27%
43
150.00
Non-Major
Major: 167
10.5%
100.00
Major
50.00
0.00
2008-09
2009-10 (E)
2014-15 (P)
• Container traffic at non-major ports projected to grow @ 27% against
10.5% at major ports
• Growth in traffic at non-major ports in line with available free capacity –
container capacities coming up at the non-major ports of Pipavav, Hazira,
and Dighi will drive higher growth / share
13.
Issues
• Container ports efficiency: Many old constraints remain
– Issues related to mechanisation have been largely resolved in cases of
large privately operated terminals
– Congestion issues remain due to very high capacity utilisation (e.g. JNPT)
– Lingering constraints of: Shallow draft at major ports, poor hinterland
connectivity
• Delay in development of many announced projects
– delays in environmental clearance, problems with financial closure
• Bringing bankable projects to market still the biggest hurdle
– Reliance on private investment for capacity ports dev. is huge: ~USD 14 Bn
– Poor project preparation, unattractive packaging lead to delays at
procurement and post award stages
– Some minor port projects have highlighted systematic gaps in site selection:
environmental issues, unfavorable soil conditions etc.
– Administrative, policy change issues
14.
Concerns / Caution points
(Observations from recent projects)
• Concerns over traffic
– Merchandise trade growth dependent on health of global economy – not out of
the woods yet
– Key concern for new projects, difficult financial closures for borderline projects
• Differential royalty structure in minor ports adversely impacts the
economics of new port developments
– Operational ports already have a first mover advantage
– May delay investments / reduce competitive position of newer developments
– Are recent bids too aggressive?
15.
Summary
• Traffic flow has started to look up after a brief depression
– Growth fundamentals remain strong
• Trends from traffic and capacity addition expectations
– Trend towards minor ports gaining market share will continue
– Capacity utilisations shall ease, balance in favour of minor ports
• Sector is poised for growth and investments
– Healthy pipeline of under development, awarded, and approved projects
– Many minor ports are sitting on potential for capacity ramp up and have
robust development plans, major ports projects flow will go up
– But hinterland connectivity constraints and some other issues will need
to be managed
16.
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17.
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