‘Indian ports need massive infrastructure for growth’

April 21st, 2008 - 11:24 pm ICT by admin  

New Delhi, April 21 (IANS) Indian ports are in need of massive infrastructure development to handle the ever growing traffic, says a report published Monday by Ernst and Young, a leading consultant group. According to report titled “Transforming Indian ports into world class facilities”, the ports in India are operating at more than 90 percent capacity utilization, and this is leading to immense congestion at the ports and delays in cargo handling.

Last financial year alone, Indian ports handled 519 million tones of cargo, registering a growth of 12 percent over the previous year, and six ports clocked double digit growth, the report says.

The report says that development of infrastructure to meet the demands of the shipping industry is the first critical step in achieving world-class status and attracting bigger vessels and concentrated passenger liners.

Commenting on the findings of the report, Rajesh Samson of Ernst & Young, said: “Ports and shipping have been traditionally the growth engines for any country. In India, the growth has been slow, however with considerable private investment flowing into the sector, we are moving towards a stage of fast development.”

“As India experiences economic growth, the traffic in ports is set to increase. This necessitates development of capacity to accommodate the growing cargo.”

The report also analyses the increased merger and acquisition (M&A) activity in the sector. India has seen a spate of M&As, with the recent ventures of PSA in Hazira and ABG’s investment in Kolkata and Kandla ports.

“This sector is set to see a lot of private activity through bidding and M&A in the near future,” added Samson.

The report also indicates the emerging trend of trend of ‘clusterisation’, with the ports focusing on specific commodities. For example, container clusters are focused in Chennai, Cochin and Tuticorin while iron ore clusters are coming up in Vishakhapatnam and Mormugao.

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