Indian Port Sector

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Indian Port Sector By Hans Ole Madsen CEO,
South Asia for A.P. Moller-Maersk
Port Pipavav
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About A.P. Moller-Maersk

• Established in Svendborg, Denmark in 1904
• More than 110,000 employees in over 125 countries
• Global group turnover of USD 40 Billion

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Main Business Activities

• Container Shipping related activities
• Maersk Line and Safmarine are market leaders in
  global container services
• Network of more than 550 container vessels and
  1.4 million TEU
• APM Terminals operates more than 45 terminals
• Multimodal Supply Chain Management services
  through Maersk Logistics

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Main Business Activities

• Other Shipping related activities
• Transport of crude oil, refined products and gas
  by Maersk Tankers
• Maersk Supply provides supply vessels for
  anchor-handling, cable laying etc
• Maersk Contractors is involved in mobile
  production units and drilling rigs
• Over 260 vessels and rigs operated

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Main Business Activities

• Energy
• Production and exploration of oil and gas
• Production Activities in Denmark, United Kingdom,
  Qatar, Algeria and Kazakhstan
• Exploration activities in the North Sea (Denmark,
  United Kingdom, Norway and Germany), Algeria,
  Morocco, Angola, Oman, Brazil, Surinam, Colombia
  and Turkmenistan

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Main Business Activities

• Retail and other industry
• Supermarkets and hypermarkets in Europe and UK
• Brands include the Føtex stores, the Netto stores
  and the Bilka hypermarkets
• Shipyards in Denmark, Germany and the Baltic
  countries
• Industrial production of plastic products
• Star Air engaged in contract parcel flying in
  Europe
• 50 ownership of Martinair Holland engaged in air
  freights and charter service for passenger

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Our Presence in India

• Maersk Line operating in India since 1952
• The leading container shipping line in India
• Nationwide presence through 33 offices
• Employs over 5,500 people in India
• Established the 1st Private CFS in Nhava Sheva in
  1994
• Pioneered the back-office (BPO) concept in the
  maritime industry
• Established the 1st Maritime Training Academy by
  a foreign shipping line in India
• Among the 1st participants in the privatisation
  of rail freight in India

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APM Terminals in India

• Located in Gujarat on the west coast of India to
  handle containers, bulk and liquid cargo
• Container volumes handled to exceed 250,000 in
  2006
• Projected Container terminal capacity of 1.3 mio
  TEU
• Bulk cargo in 2006 apx 2.5 mio tons
• Total quay length of 725 metres

• The 3rd Container Terminal at Nhava Sheva harbour
  within JNPT
• Converted existing bulk terminal on BOT for 30
  years
• Joint Venture with CONCOR
• Handling capacity to be 1.4 mio TEU
• Total quay length 712 metres
• Draft limited to channel draft of 12.5 metres

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Current Scenario

• Growth projections indicate continued demand for
  capacity
• Encouraging response from both local
  international companies for Port development
  projects in India
• Major international container port operators have
  a presence in India and are eyeing new projects

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Regulatory Environment

• Model Concession Agreement
• Major v/s Minor Ports
• Tariff Regulation
• Major Port Trusts Act

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Financing

• Need for long term financing/debt options
• Current interest rates high thus increasing the
  overall cost and risk
• Viability gap funding scope to be broadened

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Public Private Partnership in Ports

• Private investment attracted towards port
  projects with reasonable returns and payback
  period
• Support infrastructure to be developed by the
  Government to ensure success of the PPP model
• Government to undertake infrastructural
  development where payback is commercially
  unviable but essential for overall development
  such as capital channel dredging, breakwater,
  rail/road linkages etc
• PPP to be used as a tool to speed up
  infrastructure development and not as a
  replacement of Government spending

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Productivity and Efficiency

• Berth productivity has improved at some Indian
  ports from 20 moves per hour in the 90s to 70-80
  moves per hour
• The benchmark is now higher
• Emma Maersk, the worlds largest container vessel,
  had berth productivity of 540 moves per hour at
  Yantian