‘PSA ter­mi­nal will el­e­vate JNPT to a new po­si­tion’

The Hindu Business Line - - NEWS - P MANOJ

As Sin­ga­pore’s PSA In­ter­na­tional Ltd looks set to open a new mega con­tainer ter­mi­nal, its fifth, at the Jawa­har­lal Nehru Port Trust (JNPT) near Mum­bai in the next few days, Busi­nessLine spoke to Neeraj Bansal, the Deputy Chair­man at In­dia’s busiest con­tainer port, on what it means to be a govern­ment-run port, the shipping lines and the trade/users. Ex­cerpts:

How will be new fa­cil­ity change the cargo flow dy­nam­ics at JNPT?

OThe first big pur­pose it will serve is for the last sev­eral years we did not have, in the real sense, a ca­pac­ity ad­di­tion project at JNPT. We had hit a plateau of 4.2 to 4.5 mil­lion TEUs. There was a de­mand for more sup­ply/more in­fra­struc­ture. So it meets the re­quire­ments of the trade. All of a sud­den, our ca­pac­ity will rise from 4.8 m TEUs to 7.2 mil­lion TEUs. Now the sup­ply is more, but this pos­i­tive side has got its own chal­lenges – de­mand has to built up.

Sec­ond, it brings huge com­pe­ti­tion. Each ter­mi­nal has to be con­scious about its per­for­mance be­cause PSAs come with their own stan­dards. So when sup­ply is more and de­mand is not up to it and since build­ing crit­i­cal mass takes its own time, there will be a lot of churn­ing till that time. So every­body has to im­prove their ef­fi­ciency; every­body has to look at the flip side which was there ear­lier; how to im­prove so that trade re­mains com­mit­ted with those ter­mi­nals.

How does the new ter­mi­nal stack up against the ex­ist­ing ones?

The PSA ter­mi­nal will be able to dock mother ves­sels, han­dle the big­gest con­tainer ships from a quay length of 1 km, and cranes that can reach 22 rows wide or greater. So they are in a dif­fer­ent league all to­gether. Here, PSA will not have any com­pe­ti­tion be­cause it can at­tract the su­per-rich clients. This will el­e­vate JNPT to a new kind of ex­alted po­si­tion.

What ef­fect will it have on com­pe­ti­tion?

With the open­ing of the PSA ter­mi­nal, there will be in­tense com­pe­ti­tion, which will bring a huge re­lief to the trade, re­sult­ing in lower costs to the trade/users.

It’s good for the trade, but not good for the ex­ist­ing ter­mi­nals be­cause the es­tab­lished busi­ness will face stress and have to change the method­olo­gies and im­prove per­for­mance. There will be stress in the sys­tem, which may not be good for the ex­ist­ing ter­mi­nals which had its hand full all these years and were sit­ting com­fort­ably. But for the trade, it is im­mensely ben­e­fi­cial.

How will the ex­ist­ing ter­mi­nals evolve?

JNPT was never a slow port, we are al­ready among the best. But the ex­cess sup­ply brings more com­pe­ti­tion. Ne­ces­sity is the mother of all in­ven­tion. In sim­i­lar fash­ion, this com­pe­ti­tion will bring fur­ther best out of the four ex­ist­ing ter­mi­nals at JNPT. They will be fight­ing to re­tain the cargo, so pric­ing will come un­der stress/threat.

As they will be un­der stress, they’ll have to look at in­no­va­tive ways to cre­ate value for the trade so that trade re­mains com­mit­ted with them. The ef­fi­ciency im­prove­ments at ex­ist­ing ter­mi­nals will bring huge value to the trade and more loy­alty to a par­tic­u­lar fa­cil­ity and deepen the re­la­tion­ship. It has an­other huge ben­e­fit for JNPT as a port be­cause we will be cre­at­ing more com­pe­ti­tion for other play­ers on the western coast. So first is churn­ing within. Sec­ond is churn­ing on the ves­sel costs.

On its part, what is JNPT do­ing to cre­ate value for the trade/users?

Since there was no in­fra­struc­ture ad­di­tions for many years, the trade re-aligned at the avail­able space. Now when the sup­ply comes back, when ex­cess sup­ply is there, the trade has an op­tion to pick the best ter­mi­nal in terms of cre­at­ing value for them. And since it cre­ates in­tense com­pe­ti­tion within JNPT ter­mi­nals, bring­ing fur­ther im­prove­ments, the chances of get­ting newer cargo would be very high.

Com­pe­ti­tion will force all the four ex­ist­ing ter­mi­nals to step up our mar­ket­ing ac­tiv­i­ties. We are al­ready geared up for that. The four dry ports which we have con­ceived in the hin­ter­land is ul­ti­mately for that – cre­at­ing cargo ag­gre­ga­tion cen­tres. Be­sides, with the port-based spe­cial eco­nomic zones, we are tar­get­ing ded­i­cated cargo. Our port is pre­pared for the next wave of re­forms, where we are cre­at­ing more value cen­tres for the trade.

NEERAJ BANSAL Deputy Chair­man, JNPT YZ

The PSA ter­mi­nal will be able to dock mother ves­sels, han­dle the big­gest con­tainer ships from a quay length of 1 km, and cranes that can reach 22 rows wide or greater

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