National Maritime Development Program

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National Maritime Development Program Ravi B. Budhiraja Chairman Indian Ports Association And Jawaharlal Nehru Port Navi Mumbai, India AIAI Seminar, Mumbai - April 18, 2006

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Se ctions Indian Economy Indian Port Sector Need for Development Plan Guidelines for Privatization Maritime Policy – Focus Areas Recent Privatization Initiatives NMDP (National Maritime Development Program) NMDP for Mumbai's Ports Sum up

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Indian Economy: An outline

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Potential : India 7 th biggest nation on the planet and 2 nd biggest in Asia World's 4 th biggest economy as far as Purchasing Power Parity (PPP) next just to United States, Japan and China GDP development 7.6%* amid budgetary year 2005-06 GDP-creation by part: Agriculture-21%, Industry-28%, Services-51% Foreign Direct Investment (FDI) 2005-06: US$ 8 billion* . FDI demonstrates 42.86% ascent amid 2005-06 contrasted with a year ago (2004-05 : US$ 5.6 billion) Reserves of outside trade & gold 2005-06 : US$ 145 billion* * Provisional

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Increasing Trade Volumes * Provisional

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Foreign Direct Investment Foreign Direct Investment (FDI) in India has grown 34 overlap Source : RBI Report 2004-05 * Estimated : The Economic Times, April5, 2006

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Indian Port Sector

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TRAFFIC AT INDIAN PORTS In Million Tons 576 522 458 419 384 369 1950-51 and 1980-81 (30 Years) + 61 Million Tons 1980-81 and 1990-91 (10 Years) + 72 Million Tons 1990-91 and 2000-2001 (10 Years ) + 217 Million Tons 2000-01 and 2005-06 (6 Years) + 207 Million Tons

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SHARE OF COMMODITIES - Major Ports : 2005-06 Source : IPA Report * Figures in sections show Traffic in Million Tons

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Traffic Projections : Indian Ports In Million Tons 877 Overall CAGR : 7.70% Major Ports : 6.99% Non Major Ports : 9.55% (2004-05 onwards) 616 522 (#) CAGR = Compound Annual Growth Rate between 2000-01 and 2004-05 8.08 % for Major Ports, 10.59 % for Non-Major Ports and Overall 8.69%

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Capacity Requirement (Major & Non Major Ports) In Million Tons Source : NMDP Report – March 2006

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Need For Development Plan

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National Maritime Policy For the first run through, a thorough Policy for the Maritime Sector is being planned : Policy on Ports Sector Public Private Partnership (PPP) Policy on Shipping Sector Including Cruise Shipping, Coastal Shipping and Shipbuilding Policy on Inland Waterways

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Policy Vision Modernizing the current Ports and updating their offices so as to carry them keeping pace with driving ports of the world. Growing New Ports keeping in mind the end goal to completely use the unlimited coastline of the nation and the accessible draft for inferring most extreme financial preferred standpoint. Elevating Hinterland Connectivity to guarantee slightest separation access of the nation's load to the ports furthermore offer selection of ports in the locale and terminals inside the ports . Cultivating Port Specialization and Inter-Port Complementarities for general enhancement of port offices and productivity at the ports.

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Policy Objectives To guarantee Competition and improve Productivity Second Terminal offices in a similar Port won't be given over to first Terminal Operator. In any case if there are two Terminal Operators both can offer for Third Terminal Quay length of 1000 meters in a straight line will be considered wherever conceivable. The working of TAMP would be fortified so that uniform and straightforward standards win in matters of duty obsession To guarantee straightforwardness Generally Port Project will be granted through delicate course. Nonetheless, hostage offices can be given on selection premise

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Policy Objectives Contd… To enlarge limit Captive offices for Break Bulk, Dry Bulk and Common User Terminal will be energized Setting up of Container Freight Stations in recognized zones will be empowered Possibility of expanding budgetary support for the improvement of minor ports To improve availability To increase clearing and treatment of payload, Port Authority will be urged to partake in value of SPVs/Joint Ventures framed to give hinterland network Port Infrastructure Upgradation Fund to influence port speculation including reasonability crevice subsidizing

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Policy Objectives Contd… Participation in Risk Sharing Revenue sharing will be favored over sovereignty installment The concerned port may choose whether Minimum Guaranteed Throughput (MGT) will be a pre-imperative To Ensure Welfare Strengthening of autonomous Traffic Regulator in the event of rent of existing offices, it will be mandatory for renter that surplus laborers are assumed control by effective bidder

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Guidelines for Privatization

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PRIVATE SECTOR PARTICIPATION - Guidelines defined for Private Sector Participation, Joint Venture and Foreign Collaboration in the Major Ports which extensively incorporate :- Two Stage Bidding Process Request for Qualification (RFQ) and Request for Participation (RFP) Automatic Approval up to 100% for FDI Period of rent/BOT permit up to 30 years Bidders to demonstrate rate of income to be shared Minimum Guaranteed Throughput not required.

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Maritime Policy : Focus Areas

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Port Sector Boost to Private Sector Participation Private Sector speculation prompting to proficiency, rivalry and cost lessening to clients Coastal Shipping to increment from 7% to 15% by 2025 Inland Water Traffic to increment from 0.15% to 2% by 2025 Promoting Cruise Shipping Private Sector Participation in territories like development of Breakwater, operation of Berths/Terminals Identifying Projects for Development of Ports with 8 years' opportunity skyline

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Ship Building Two Public Sector Shipyards Capacity restricted Augmentation of existing shipyards in progress Two global size shipyards arranged Likely venture of Rs. 7,195 Crores FDI favored – PPP second choice

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Inland Water Transport 14,500 kms traversable conduits Only 18 Million Tons being conveyed Three National Waterways Proposal to create three new National Waterways NMDP imagines venture of Rs. 10,500 Crores

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Recent Initiatives …

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Private Sector Participation - Success so far 17 Private or Captive Projects including private speculations worth Rs. 6,130 Crores have been affirmed. 13 ventures including speculations of about Rs. 2,596 Crores are operational 4 ventures including about Rs. 3,534 Crores are in various periods of usage. Nearness of famous International Operators P&O Ports (DP World) PSA Corporation Dubai Ports International Maersk A/S

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Recent Initiatives Includes… .. Labor legitimized step by step amid most recent couple of years from 102,000 in 1999-2000 to 69,000 as on March 31, 2005 at Major Ports. Govt. has endorsed the proposition for honor of agreement for Development of International Container Transhipment Terminal at Cochin on BOT. The establishment stone was laid by Hon'ble Prime Minister on Feb. 16, 2005 Govt. has affirmed Sethusamundram Ship Channel Project at an expected cost of Rs. 2,427.40 Crores. This will bring about sparing of upto 424 nautical miles separation and time upto 30 hours Third Container Terminal Gateway Terminals India Pvt. Ltd. (GTIPL) at JN Port has begun operations on trail premise from March 14, 2006. GTIPL will be operational completely by August 2006. Handle has additionally been started of growing Fourth Container Terminal at JN Port First port based Special Economic Zone (SEZ) at Cochin given 'on a basic level' endorsement through Ministry of Commerce. Attainability consider for a World class Container Terminal at Ennore Port has been finished . Facilitate activity in such manner is being taken by the port powers. Ennore Port is likewise set to enter Chemical taking care of operation through private division investment A venture on Deepening for Approach Channel upto 18.7 meters a Paradip Port has been affirmed

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National Maritime Development Program (NMDP)

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National Maritime Development Program (NMDP) NMDP Includes ventures which are under usage as on 1 st April 2005 or are probably going to begin till 31 st March 2012. The Program has further been isolated into two stages. Stage I : Comprises of undertakings Plan works under usage as on 1 st April 2005 Plan work anticipated that would be begun from 1 st April 2005 to 31 st March 2007 Works which however liable to begin after 31 st March 2007, yet are relied upon to be finished by 31 st March 2009 Phase-II : All different tasks will be incorporated into Phase-II

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Port Sector - Focus Areas Capacity Draft Hinterland network Productivity NMDP has motivation for every one

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NMDP requires tremendous venture - Ways to welcome Investment approach changed Private Participation invited Public Private Partnership (PPP) in key zones Selective Budgetary Support

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Public Private Partnership (PPP)

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Scheme of PPP 100% FDI allowed in Port improvement. Private interest in Infrastructure/business exercises like Berths, Terminals, Equipments, and so forth. Open/Private interest in like manner client offices like Dredging, Break-waters, Hinterland Connectivity, and so forth

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NATIONAL MARITIME DEVELOPMENT PROGRAMME - - Overview Indian Major Ports : Proposed Investments – Phase I & II (Rs. In Crores)

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Portwise Status Of NMDP Projects

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NMDP for Mumbai's Ports

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