Ravindra Gandhi, Regional Director, Peel Ports Group & Director, Hans Maritime Services Pvt, Ltd.
Q- What are your views on the current scenario of ports in India?
A- Indian ports are a gateway to the countryâ€™s international trade by sea,handling a significant volume of EXIM trade. In the past few months there has been an upswing in conversations by the government around port-led development and network expansion of inland waterways. The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, gave its â€˜in-principleâ€™ approval for the concept and institutional framework of its ambitious Sagarmala Project late last week. It is interesting to note that the Government is working closely toward strengthening port and clearing infrastructure with an aim to simplify procedures used at ports for cargo movement.
Q- Govt. of India unveiled the Budget last month, what is your take on that?
A- The Finance ministerâ€™s recent Union budget proposal of converting Indiaâ€™s 12 major public port trusts into corporations under the Companies Act is expected to instill greater efficiencies in operations besides providing funds which are crucial for growth. Public sector ports need huge capacity additions and investments to remain pulsating. Encouraging corporatization of ports will open up countless possibilities to enhance port productivity and is certainly a step in the right direction. In addition, the encouragement of Public Private Partnership (PPP) model would ensure that Indian ports remain competitive. We feel this passage will help us progress towards a paradigm shift in the Indian maritime sector through Hon. Prime Ministerâ€™s flagship Sagarmala project. Besides, this move would certainly ensure quality and increased productivity of the Indian port infrastructure.
Q- Peel Ports recently secured 2,80,000 sq. ft. of Salford port, gearing up for Liverpool 2. Please share some insight on this development?
A- Under construction on the banks of the Manchester Ship Canal, Port Salford is an integral part of the Atlantic Gateway project being led by Peel Ports, which involves the redevelopment of the port and canal network and surrounding land between Manchester and Liverpool. Located adjacent to the Manchester Ship Canal, the Port Salford National Import Centre will enable specialist goods handling and redistribution. Its unique location will allow direct vessel access from the new Liverpool2 terminal at the Port of Liverpool, currently under construction by Peel Ports and due for completion in late 2015. Food and drink logistics giant, Culina Group, has recently been announced as the first major tenant at the new National Import Centre being developed by the Peel Group, as part of its multi-million pound Port Salford development (located approximately 6 miles (9.7 km) west of Manchester City Centre in the UK). The property comprises 26,022 sq. m. (280,000 sq. ft.) of accommodation, including ancillary offices, service yard and parking. 280 jobs will be created at the logistics centre, which is expected to be completed by April 2016 and fully operational by the end of 2016.
Q- What are the challenges you comprehend in the Indian market?
A- The first and last mile issues havebeen a hindrance for sometime now and need to be addressed on a priority basis. This, along with connectivity issues to Indiaâ€™s hinterland needsspecial attention. The occasional rise in tariffs also makes business unviable for users. As mentioned earlier, a Public Private Partnership model is extremely essential to ensure that ports remain competitive. However, private participation in this sector has not taken off as it may be desired, thus creating a bottleneck for the growth and development of industries. Additionally, more focus is required to develop road networks within the port area, cargo-handling equipment and hinterland connectivity through rail, road, highways, coastal shipping and inland waterways.
Additionally, more focus is required to develop road networks within the port area, cargo-handling equipment and hinterland connectivity through rail, road, highways, coastal shipping and inland waterways.
Q- What are the USPâ€™s of Peel Ports? How do you see yourself different from others?
A- The Liverpool2 (L2) is a â€€300 million investment programme by Peel Ports to expand and develop the existing Port of Liverpool. The investments and stateof- the-art quayside facilities will see the port become one of the most operationally efficient and modern terminals in Northern Europe. When operational, L2 will provide its customers with one of the most efficient and cost effective routes for goods into the heart of the UK through its wide network of motorways, rail network and facilitate the transportation of goods via the Manchester ship canal. In addition, Peel Ports Group is uniquely placed to enhance connectivity with its own shipping line – BG Freight Line B.V. – leading third party feeder / short-sea operator offering connections throughout the Northwest Continent, the UK and Ireland.
Q- According to you, what positives do you see in the Indian markets that provide an impetus to the Logistics sector?
A- The growing logistics sector is a great indicator of a healthy and a growing Indian economy. Further, the impetus provided by the Government is expected to further boost the economic growth. Among these, India is looking at major developments in the shipping and ports infrastructure where huge investments are expected. The new initiatives taken by the Government to develop inland waterways, coastal shipping, the Sagar Mala project and the corporatization of ports etc. will certainly look to have a positive impact and give a much needed boost to the trade and economy of the country. Gadkari, Honorable Minister of road transport and highways, and shipping, has paid a lot of emphasis to in-land waterways. His Big-Ticket Maritime Project has the potential to radically transform the economy and increase the competitiveness of Indian companies. The benefits from this would be immense. As the rail and road corridors are saturated, the development of rivers and waterways would create an alternative mode of transport. Huge quantities of bulk cargo can pass through the river thus resulting in reduced transport costs by the shippers and being more eco-friendly. In addition,it is stated that at least a dozen smart cities and several coastal economic zones will come up under the ambitious Sagarmala project which is expected to assist in lifting India’s GDP growth by as much as 2%. The Sagar Mala project would strive to tackle the challenges by focusing on port modernization, efficient evacuation and coastal economic development through a structured framework for ensuringinter-agency collaboration and integrated development. Ports will thus be able to actively participate in driving the economic development of a wider region, which is similar to the role large global ports are playing in their respective countries. The project has the personal stamp of Hon. Prime Minister Mr. Modi, incorporating the port-led development model which is claimed to have beensuccessfully delivered in Gujarat. Ports will now be able to approach commercial banks for fund-raising and can also explore merger and acquisition options for expansion, which is not possible under the current port trust structure.
Q- With an extremely competitive environment â€“ new entrants in the market, what are your thoughts on the longstanding players in the industry?
A- Rising competition from private ports has forced major Government-owned ports to change their business models. Previously, major ports used to have near monopoly revenues and profits, but are now finding it difficult to remain competitive. In India, the private ports are a lot more aggressive in their approach as compared to their Government counterparts. The new private ports provide customized services to their clients. Also, private ports are often more flexible in terms of pricing, since they don’t come under the Tariff Authority for Major Ports, a major reason why private ports can sign long-term contracts with clients. The one factor that works in favour of the major ports is their location. Each of these are located in the vicinity of major cities and are well connected with the production and consumption centres nearby. A lot of private ports on the other hand are located far from major centres.
Q- What are your thoughts on the Indian Logistics laws?
A- We feel that things are moving in the right direction. The Government is reviewing the laws, some of which may be well outdated. These would need to be reviewed in order to make it level playing fields for India to become a global player in the port and logistics sector.
These would need to be reviewed in order to make it level playing fields for India to become a global player in the port and logistics sector.