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Amit Mitra

A view of the P&O Ports-run Chennai Container Terminal Limited (CCTL ), Chennai... While foreign port operators consolidate their presence, Indian counter-parts are being increasingly marginalised. — Bijoy Ghosh

THE increasing trend of foreign port operators gaining control of existing and new port terminals in India, elbowing aside Indian players, appears to be causing concern in the domestic port sector.

Indeed, the foreign operators are coming from all over the globe, slowly but steadily, to grab whatever patches of the Indian port sector are being thrown open for private participation, dwarfing home-grown entrepreneurship.

This trend has thrown up several uncomfortable questions. Why is Indian entrepreneurship struggling against the foreign port operators in the battle for projects in the domestic ports sector that are being offered for private participation on a BOT basis?

Why is it that, unlike in other sectors such as automobiles, telecom or IT, there are hardly any home-grown business entities that can put up even a semblance of a fight to bag port projects, with foreign companies literally snuffing out any domestic competition?

Do the eligibility norms for private sector participation in port development projects, by their very provisions, marginalise Indian companies? These questions have begun to do the rounds in Indian port circles.

Consider the port development projects that were put up for private participation on a BOT basis in the recent past.

First, it was P&O Ports that made a forceful entry into the Indian port sector by bagging the Nhava Sheva International Container Terminal at JN Port about three years ago and then consolidated its presence by taking over the Chennai container terminal and, more recently, the Mundra port from the Adani Group.

In the same genre, the Tuticorin terminal went to the Port of Singapore Authority, and the Vallarpadam transhipment terminal project is likely to be snapped up by either CSX or Maersk.

Even minor ports, such as Kakinada on the East Coast and Pipavav port, on the West, which have been given over to private operators, are dominated by consortia that are controlled by foreign players.

The only Indian company to make its presence felt is the United Liner Agency (ULA), part of the J. M. Baxi group, which commissioned the container terminal project in Vizag last month.

Even in this case, it wanted to go it alone, but the Ministry of Shipping insisted that it tie up with a foreign player — it bid for the Vizag project in association with Dubai port, which has a 24 per cent stake in the project.

Take the case of the latest project that private operators are vying with each other to bag — the Rs 900-crore project to redevelop a bulk terminal into a full-fledged container terminal at JN Port. The foreign players in the race include such big names as PSA, Maersk, Marubeni, CSX Terminals, West Port Malaysia, French Shipping Lines and Stevedoring Services Association (SSA).

Most of the foreign players are also eying the proposed Mumbai port and Kandla port container terminal projects, being developed through private participation on BOT basis.

Of course, most of the foreign players are bidding for the projects in association with Indian companies, but in almost all the cases the latter get a pittance of a stake. Said a port analyst: "The Indian partners get hardly 5-15 per cent stake in such bids. This stake is for the Indian companies to do the job of an errand boy — mostly for day-to-day liaison work with the parent port."

A section of Indian port planners are worried why big Indian corporate entities are not emerging and making their presence felt in this critical sector. One reason, analysts point out, could be the stiff qualification conditions, especially with regard to experience in port management, that are being prescribed for private participation in port projects.

For example, L&T, one of the major Indian corporate entities that had shown interest in the JN Port container terminal project, was jettisoned out of the race on the ground that it did not have any experience in port management.

"But did the Mittal Group have any experience in telecom when it entered the sector? Or, for that matter, the Ambanis in oil exploration?

Today, every major sector, be it telecom, automobile or cement, has at least one Indian corporate entity that can match any global player.

But in the port sector, there is hardly any Indian presence. In fact, most of the foreign port operators are employing Indian personnel to run the domestic operations," an analyst argues.

Port observers feel that if foreign players continue to swamp this sector by marginalising Indian entrepreneurship, it send ominous portents, especially as the ports have a major role to play in India's international trade and, hence, in the economy.

They feel that the Government and the corporate sector should look at this trend seriously so that Indian participation can be increased in the sector before the country faces the prospects of well-muscled foreign operators controlling major chunks of several Indian ports.

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