BW Communities

A Port At The Crossroads

Gurbir Singh Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[The Mumbai Port Trust has just decided to bury a bit of history, and the greens are not happy about it. Two of the port's oldest docks — the Prince's and Victoria — will be filled up to make way for a new offshore container terminal. Both the docks, built in 1885 and 1891 to provide access for small ships, are now in disuse. The Rs 1,228-crore terminal will be developed by the Indira Container Terminal Pvt Ltd (ICTPL), a joint venture between construction firm Gammon India and Spain's leading port group Dragados SPL. The Mumbai Port Trust (MbPT) will cover the cost of dredging and filling up the docks, estimated at Rs 366 crore."The process will give the port an additional 40 hectares," says MbPT's Chairman Rahul Asthana. "From this reclaimed waterfront, a trestle or a concrete pathway on piles in the sea will connect traffic movement to four new berthing stations."With a deep draught of 14.6 metres for the open-sea berths, MbPT hopes to increase its traffic of large vessels. "The filling work has started, but it will gather pace only after the monsoons. We expect the berths to be operational by December 2010," says Asthana.The MbPT chairman concedes the issue is contentious. Showing an artist's image of what Prince's and Victoria could become — a luscious water sports seafront replete with docked yachts, and the city's glitterati making their way on their speed boats — Asthana says there had been intense industry lobbying for converting the heritage docks into a waterfront marina. But the Ministry of Surface Transport rejected this idea in favour of enhancing the port's capacity and revenue-generating operations.A port trustee and president of the All India Port and Dock Workers Federation, Shanti Patel, hints darkly that the pressure for a stylish marina is coming from the Mukesh Ambani-backed Jai Corp that is seeking to develop the alternative port of Rewas across Mumbai's harbour. On the other hand, environmentalist Shyam Chainani, whose Bombay Environmental Action Group (BEAG) has consistently opposed increase in port traffic for the past two decades, says the move will heighten congestion in the city. "Nowhere in the world has city heritage been extinguished like this," he says. But, ironically, nowhere in the world are port operations, stretching over a 14.5-km arc on the eastern seaboard of the island city, enmeshed so hopelessly into one of the most densely populated cities of the world. The port operations pass through the city's transport networks. Also, the posh business district of Ballard Estate, which houses several businesses and markets, is located on the port land.That is why the 1,860 acres of land owned by MbPT becomes a contentious issue. In fact, it is variously seen as a panacea by many — the state government sees it as a remedy to the city's overcrowding; for planners and environmentalists it is a chance to decongest the city; and for scores of builders, it is a goldmine for development. So, which way will the Mumbai port go?<img style="width: 150px; height: 150px" src="http://www.businessworld.in/bw/image/Personalities/Profiles/Rahul-Astana_SBD150x150.jpg" alt="AT THE HELM: MbPT chairman Rahul Asthana says the new terminal will enhance the port's capacity" title="AT THE HELM: MbPT chairman Rahul Asthana says the new terminal will enhance the port's capacity" width="150" height="150" align="right" />Expanding Growth The Mumbai port has grown at a steady clip defying wishful thinking that it is shedding traffic over the years to sister port Jawaharlal Nehru Port Trust (JNPT) across the harbour at Nhava Sheva and other west-coast ports such as Kandla. But it has increased its cargo handling from 26 million tonnes (MT) in 2001-02 to 44 MT in 2005-06, and notched up 57 MT in 2007-08. Its operating surplus has also grown from Rs 47 crore in FY05 to Rs 263 crore in FY08. But in 2009, it slumped with the fall in exports and imports to Rs 123 crore.However, there are signs that MbPT has turned into a dinosaur. With an employee strength of 18,700 today, it is the biggest employer among the major ports in India, with one-third of the country's port labour of 57,000. But in cargo handling, it has slipped to fifth position after Kandla, Visakhapatnam, JNPT and Chennai. The highly mechanised JNPT, with a labour force of 1,400 that handles container traffic, notched up 55 MT in FY09 compared to the Mumbai port's 52 MT. MbPT's wage bill — Rs 350 crore in FY08 and close to Rs 488 crore in FY2009 — accounts for a whopping 60 per cent of the port's operating income.In this context, increasing container traffic and converting the defunct docks to container handling terminals seem to be a sensible business decision. The new terminals with railway connectivity are expected to handle as much as 1.2 million TEUs (container units). "From a paltry 118,000 TEUs in FY08, traffic will rise to 6.7 million TEUs in 2010-11, and touch 15.8 million TEUs in 2016-17. While JNPT is expected to level out at 11.6 million TEUs, we will be handling 36.4 million TEUs by 2025," says Asthana, citing a KPMG survey.<img style="width: 150px; height: 150px" src="http://www.businessworld.in/bw/image/Personalities/Profiles/Shanti-Patel_SN_150x150.jpg" alt="MAKE WAY: Trade union leader Shanti Patel says the port trust should not behave like a landlord; its land should be used for public good" title="MAKE WAY: Trade union leader Shanti Patel says the port trust should not behave like a landlord; its land should be used for public good" width="150" height="150" align="left" />Going Against The Plan But this growth trajectory was not the future envisaged for the Mumbai port three decades ago by the then Prime Minister Indira Gandhi. When JNPT was being planned in the 1980s, and faced stiff opposition from environmental lobbies, the port was given the green signal on the ground that it would help decongest overcrowded Mumbai. The idea was to slowly get the Mumbai port to reduce operations and use the surplus land to green the city.A directive issued on 8 August 1980 by the Prime Minister's Office said when considering plans for JNPT "the feasilbility report should provide for the release of land and dock areas in existing Bombay Port area for parks, etc". Interpreting this directive, the Ministry of Environment and Forests (MoEF) laid down detailed guidelines when it gave clearance to JNPT in August 1988. "With the operation of Nhava Sheva port as a measure of decongestion of Bombay Port, the traffic in Bombay Port must be gradually reduced by steps to be taken by the Ministry of Surface Transport, Bombay Port Trust and Nhava Sheva Port Trust so that the total general cargo, inclusive of container cargo handled by Bombay Port, comes down within three years to 6.5 MT."The MoEF directions further stated: "The Ministry of Surface Transport and Bombay Port Trust must take action to gradually make the land of Bombay Port, which is not required for operational purposes of the port, available for greening and recreation."Meanwhile, a look at the global scenario shows that docks within city precincts ultimately give way to more pressing urban demands, and are shifted to independent port towns some distance from the main city. For instance, in the 1800s, Canary Wharf in London was one of the busiest docks in the world. The port industry began to decline by the 1950s, and the docks had to shut down in 1980. Several business groups, led by Credit Suisse First Boston (CSFB), backed an alternative plan for a business district there. Today, Canary Wharf is a bustling financial centre with London's tallest buildings and wealthiest tenants. <script type="text/javascript"> var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } </script> In July 2007, at a land policy meeting, MbPT's then Deputy Chairman Ashok Bal tried to draw a distinction in respect of the Mumbai port. He said though other ports such as Kandla and JNPT had taken away substantial traffic from Mumbai and reduced the hinterland it served, cargo handling at the port continued to gallop. This showed "the economic development of the Mumbai region demanded continued existence of the Mumbai port". But the state government holds a contrarian view. "We opposed the development of the container terminal at the docks knowing it would increase congestion. But it was a fait accompli," says U.P.S. Madan, convenor of the Maharashtra government's Mumbai Transformation Support Unit. "The port land needs to be used for greening the city, and the port operations must be shifted out or gradually closed."The Demand For Land Over the past two to three years, there has been an incessant demand from the state government that part of MbPT's surplus land be used for the city's development. The state empowered committee that monitors the city's development, chaired by Chief Secretary D. Shankaran, formally raised the issue with MbPT in November 2006. However, Bal said there was little land to spare. In his tally, the surplus land was a measely 12 acre.However, a recent land policy presentation of the port trust revealed that more port land was leased out than used for port's own operations. Of the total 1,860 acre the port owns, 486 acre was used for dock operations, while properties leased out covered about 868 acre or 46 per cent of the total land. MbPT's tenants include government bodies, public sector units and 2,886 private tenants including the Taj Mahal Hotel, Unilever factory and the Ballard Estate. <img style="width: 600px; height: 226px" src="http://www.businessworld.in/bw/image/Infrastructure/port_operating_income_lrg.jpg" alt=" " width="600" height="226" align="middle" />Asthana says a substantial part of his administration was devoted to administering these tenanted estates. Port records show leases for 379 properties accounting for 43 per cent of the land had expired and MbPT was not able to wrest the land back. In the process, the port became the second largest litigant, after the municipal corporation, with 1,800 cases pending in courts. Quips Asthana: "We also run a port."Finally, wilting under pressure from the public and the state government, MbPT, in August 2006, decided to settle the issue by formulating a land policy for the port. It set up a committee of port trustees that included Bal and two labour representatives, S.R. Kulkarni and Shanti Patel. The minutes of a meeting of the committee (July 2007) show Bal vigorously defending the existence of the Mumbai port, but conceding that in the 1988 talks with MoEF, a master plan of the port had earmarked about 131 acres as "green areas and public amenities".Patel has a different take. "MbPT has a lot of land, and it should be used in public interest. The trust should not behave like a private landlord," Patel told BW. He, however, says MbPT, set up as an autonomous body under the Major Port Trusts Act of 1963, was never allowed to function independently, and was ruled by "guidelines" of the surface transport ministry through the chairman's office. Not surprisingly, considering these pulls and tugs, three years after it was formed, the committee of trustees is still to release the land policy.Integrating With The City? Along with the Rs 1,288-crore container terminal at the Victoria and Prince's docks, MbPT has two significant projects on its agenda that it hopes will integrate the port with the city's needs. A Rs 133-crore investment has been planned to develop rail transport through the dock areas to ease the load on the arterial road networks. The plan to develop a dedicated railway line, linking the dockyard hub, Wadala, to the central railway hub, Kurla, will speed up cargo dispersal. Though mooted in 2006, the project has been held up due to delay in rehabilitating the 1,700 slum units that are on the railroad alignment, says Asthana.The second project, the construction of the Eastern Freeway, a road which starts from south Mumbai and exits at Chembur in the north, has kicked off with a 5-km section running on port trust land on elevated stilts. The Rs 300-crore 27-km freeway, though not a port trust project, is being developed by the Mumbai Metropolitan Region Development Authority (MMRDA) to provide a rapid exit for the city and ease traffic congestion. However, MbPT has given free land for the project and invested Rs 35 crore to develop the Anik-Panjarpur link road connecting the Eastern Freeway. Slated to be completed in December 2007, the freeway is now three years behind schedule.Though Asthana is not insistent that the port has no land to spare, as was claimed by his predecessor Bal, he says development of the port land must be commercially beneficial to MbPT. "The trust is not against giving land for the development of the city. But we would want to do it ourselves, and on terms that are financially advantageous to us," Asthana emphasises. "It should be part of a city master plan, and should not hamper port operations." Madan, who heads Maharashtra's Mumbai Planning Cell, says his team is in the process of preparing a concept plan that would include the port trust land in "a single integrated vision" to improve and decongest the city.To start with, land relinquished by lessees of the port trust could be pressed into city development projects, such as the four acres that the Central Warehousing Corporation returned a month ago. However, until the pundits in the surface transport ministry realise that Mumbai port has to reinvent itself as part of the rapidly changing megalopolis, all we will have is short-term, knee-jerk responses.gurbir(dot)singh(at)abp(dot)in <script type="text/javascript"> var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } </script>

Gurbir Singh

BW Reporters Gurbir Singh is an award-winning senior journalist with over 30 years experience. He has worked for BW Businessworld since 2008, and is currently its Executive Editor. His experience ranges from covering 'Operation Bluestar' in 1984 to pioneering coverage of the business of Media & Entertainment and Real Estate for The Economic Times.