Major and minor ports are attracting attention of corporate honchos. Apart from the government and international port operators, over 25 corporate houses have evinced a keen interest in developing ports in the country.
Major players, targeting port projects worth Rs 20,000 crore, include Reliance Industries, Tata Group, Anil Ambani Dirubhai Group, Essar and Larsen & Toubro.
Minor ports also find a place in their scheme of things. "Most of the companies are eying port projects as part of their backward integration. Return on investments is less cyclical compared with shipping business," industry analysts said.
For Reliance, a port or container terminal will enable it to integrate the operations with the upcoming Special Economic Zone. Reliance is planning to build or acquire a minor port near its SEZ area. It is also bidding for the Jawaharlal Nehru Port Trust's Rs 5,000 crore fourth container terminal.
The Tata group is seeing ports as an option to minimise cost of logistics operations of its various group companies.
Essar is targeting end-to-end sea logistics solutions to crude oil refiners.
Shipping Corporation of India Director Sudhir S Rangnekar said: "We have submitted Expression of Interest for JNPT's terminal. Land logistics, including terminal operations or container freight stations, are more profitable than shipping and will enable link to ocean transportation."
L&T, an engineering and construction major, is also a serious player and also bidding for major container projects in the country.
However, analysts cautioned margins from container operations would be under pressure due to competition and costings. Recently, ABG Heavy Industries and Port of Singapore Authority have quoted a whopping revenue sharing 48.99 per cent and 48.50 per cent for container terminals of Kandla Port and Chennai Port.
Tariff Authority for Major Ports treats this revenue shared amount as margin, not cost, said industry sources. TAMP, which fixes ceiling of port charges, decides tariff upon the actual cost.
"If TAMP is treating revenue share quote as margin, operators will have to cough up more money. If a terminal operator shares half of the revenues, the operator will end up in deep trouble," sources added.
Operators at major ports cannot fix a tariff above TAMP's ceiling. With intra- and inter-port competition, margins are bound to shrink in the coming days.
