1. Restructuring and regulation in the ports sector: Indian experience S Sundar Distinguished Fellow The Energy and Resources Institute Dhaka, Bangladesh, September 2003

2. Structure of Ports in India Major Ports  Placed in union list of Indian Constitution  Governed under the Major Port Trust Act, 1963 by the Government of India  Administered by a Board of Trustees

3. ...Structure of Ports in India Minor Ports  Placed in concurrent list of Indian Constitution  Administered under the Indian Ports Act, 1908 by State governments or by State Maritime Boards

4. Institutional Problems  Lacking in commercial approach  Unwieldy management by Trustees with vested interests  Ports viewed as sources of revenue  Powers concentrated in the government

5. Indian port performance  High pre-berthing delay (3.6 days in 1995- 96)  High vessel turn around time (8.3 days in2003-03)  Low equipment utilization Low labour productivity  High manning scales

6. Reasons for poor performance  Ports not adjusted to changes in cargo categories  Obsolete and poorly maintained equipment  Over staffing  Cumbersome customs procedures  Poor port access facilities  Absence of inter-port and intra-port competition

7. Port reforms toolkit: World bank  Set reforms objectives  Areas for private sector participation  Methods of private sector involvement  Legal and institutional restructuring  Allocating financial risks  Draft ports concession agreements and tender documents  Identify responsibilities for risk allocation, funding, regulation and implementing port reforms  Introduce labor reforms

8. Policy initiatives in India - Objectives  Recognition of the need: - to attract new technologies - to introduce efficiencies and better management practices - to attract PSP - to introduce competition

9. ….Policy initiatives in India  Adoption of landlord port' concept  Decision to corporatise ports  Setting up of Tariff Authority of Major Port (TAMP)  Major ports enabled to set up joint ventures  Acts amended

10. ...Policy initiatives in India 1996 Guidelines  Areas for private sector investment identified  Procedure prescribed for inviting private participation  Criteria for evaluation prescribed  Model tender documents and concession agreements formulated  Corporatisation of Ports

11. Labour  Surplus labour to be identified and redeployed  Labour to be taken over with the facility to be indicated in the tender document  Labour taken over by the franchisee to retain a 5-year lien with the Port Trust

12. Labour(contd.)  VRS-Introduced in all ports  Manning scales re-negotiated  Law amended to provide for amalgamation of dock labour ports

13. Other initiatives  Master plan for each port  Upgradation of equipment through public- private investment  Restructuring port facilities

14. Other initiatives (contd.) Streamlining of port-customs interface Introduction of EDI Introduction of Commercial Accounting Practises Corporatization

15. Policy initiatives in states  BOOT Model  Joint venture for development and operation of an entire port

17. Private Sector participation in non- major ports  Already invested(in crores of Rs.) -Andhra Pradesh : 40 -Gujarat : 4475 -Maharashtra : 70 -Tamil Nadu : 129 Total 4714  Expected Investment(in crores of Rs.) -Andhra Pradesh : 3357 -Gujarat : 18713 -Maharashtra : 1500 -Tamil Nadu : 3227 Total : 26797

19. Other Results (contd.)  Pre-berthing delay has been reduced to 0.34 days(2002-03)  High vessel turn around time has been reduced to 3.8 days in 2002-03  Labour force has decreased from approximately 105000 (1995) to 74000 (2001)

20. Thank You