TM International Logistics Limited Ports and its infrastructure Roundtable Conference on Coal 28 th October 2013, New Delhi Tamal Roy TM International Logistics Ltd. ( A Tata Steel Subsidiary)

TMILL OVERVIEW OF COAL IMPORT 2

TMILL Coal Import Trends 3 CAGR = % CAGR = % CAGR = % Inflection Point Imported Non-Coking Coal is the showstopper

TMILL Let’s slice the data further MT 80 MT Major Origins: Cargo Break-up in East Coast (MT) Lion’s share of Coking Coal import through East Coast Ports due to proximity to Steel Plants Import through West Coast skewed in favour of Non-Coking Coal Coking Coal : Australia Longer haulage Capesize/Panamax Non-Coking Coal : Indonesia and South Africa Shorter haulage Panamax/Supramax Cargo Break-up in West Coast (MT)

TMILL Imported Coal Traffic at Select Indian Ports during FY13 5 Kakinada – 4 MT Karaikal – 5 MT Haldia – 6.5 MT Paradip – 12.7 MT Visakhapatnam – 11.8 MT Ennore – 6 MT Tuticorin - 3 MT Kandla – 4.3 MT Mormugao – 7.3 MT New Mangalore – 4.3 MT Dhamra – 8 MT Gangavaram – 10 MT Krishnapatnam – 16 MT Mundra – 26 MT Mumbai– 4.2 MT Select Major Ports Select Minor Ports Deep-Water Minor Ports

TMILL COAL LOGISTICS AND PORT INFRA 6

TMILL Imported Coal Logistics 7 Low Value Commodity Usage of Lager Vessel Import through Deep Water Ports Mechanized Handling System Larger Stockyards Reliable Evacuation Methods Logistics Cost – Major Component of Landed Cost Freight Benefits through Economies of Scale Capable of accommodating Larger Vessels Quick turnaround of vessels Holding larger parcels Rake availability / Hinterland Connectivity Port infrastructure plays pivotal role in imported coal logistics

TMILL INDIAN PORTS – ISSUES AND CONCERNS 8

TMILL Inadequate Draft 9 Kakinada –13 MT Karaikal – 15 mtr Haldia – 7.2 mtr Paradip – 14 mtr Visakhapatnam – 11 mtr Ennore – 13.5 mtr Tuticorin mtr Kandla – 12.5 mtr Mormugao – 11 mtr New Mangalore – 14 mtr Dhamra – 18 mtr Gangavaram – 16 mtr Krishnapatnam – 17 mtr Mundra – 17 mtr Mumbai– 11 mtr No Indian Port is naturally deep drafted No Major Port equipped to handle large vessels  Importers can’t derive freight benefits Huge Dredging Requirement  Eating away Port’s profitability

TMILL Inadequate Infrastructure 10 Limited dedicated coal handling facility at major ports Lower Productivity Semi-mechanised Handling System Higher Pollution Import traffic exceeding capacity Very high capacity utilization leading to Congestion Inefficient Port Operations

TMILL Hinterland Connectivity 11 Overdependence on Railways Over utilised - Highly Congested Track Congestion Shortage of rakes Shortage of bottom opening wagons Zonal capacity constraints Problems related to Inter- Zone re-deployment of rakes Alternates to Railways System Direct Conveying Most efficient mean for importer adjacent to the port  Tata Power – Mundra  RINL – Gangavaram  TNEB - Ennore High CAPEX – Guaranteed Cargo Coastal Shipping 7500 kms long coastline covering 200 ports and 9 states Safer Mode of transportation Low level of Utilization Issues with Inland Waterways and Coastal Shipping Inland Waterways Poor navigability Extremely strong seasonal river currents Theft / River piracy Coastal Shipping Limited dedicated berths for coastal vessels Norms on age, manning and statutory surveys similar to OGVs Inland Waterways More than kms of waterways 5 National Waterways + State Waterways Low level of Utilization

TMILL Implementation Issues in Capacity Augmentation 12 Land acquisition issues Time and Cost Over Runs Credit Crunch Approval from various agencies

TMILL Way Forward Integrated approach in Transport & Logistics Infrastructure Planning – Synergy between Major Port Trusts and State Maritime Board – Hub and Spoke Model in Port Development to derive maximum benefit – Rail / Road Connectivity with the Hinterland Single Window for all regulatory clearances Incentives for Inland Waterways and Coastal Shipping 13

TMILL Thank You 14