Major Indian Ports to Work on 80% Landlord Model in Coming Years

The Ministry of Ports, Shipping and Waterways (MoPSW) recently announced its ambitious plan to transition 80% of major ports to the ‘Landlord Model’ by the end of this decade. The MoPSW plans to move in this direction with the aim of boosting efficiency and reducing logistics costs, thereby positioning India’s maritime sector for robust growth.

Under the Landlord Model, port authorities act as landlords, focusing on trade facilitation through investments in infrastructure such as deepening channels and improving connectivity. Commercial services are left to private entities, with the port authority receiving a share of the revenue generated.

Speaking at the CII Annual Business Summit 2024, Ports, Shipping, and Waterways Secretary TK Ramachandran highlighted that Jawaharlal Nehru Port (JNPT) has become the first major port in India to fully adopt the landlord model. All berths at JNPT are now operated under the public-private partnership (PPP) model.

“We have 12 major ports with significant capacity. Our goal is to shift to an 80% landlord model by the end of this decade,” Ramachandran stated.

Maritime transport is a critical component of India’s trade infrastructure, with approximately 95% of the country’s trade by volume and 68% by value facilitated through its 229 ports. This includes 12 major ports and 217 minor ports along a 7,517 km coastline.

The 12 major ports – Deendayal (Kandla), Mumbai, Mormugao, New Mangalore, Cochin, Chennai, Ennore (Kamarajar), Tuticorin (V O Chidambaranar), Visakhapatnam, Paradip, Kolkata (including Haldia), and Jawaharlal Nehru Port – fall under the administrative control of the MoPSW and are regulated by the Major Ports Authority Act, 2021. In contrast, minor ports are regulated by state maritime boards under respective state governments.

The shift towards the landlord model has faced criticism, particularly from Adani Ports and Special Economic Zone Ltd (APSEZ), controlled by Gautam Adani. APSEZ has adopted a service-driven approach, contrasting with the landlord model.

In their Annual Report 2022-23, APSEZ stated that defying the norms of port operations, APSEZ chose to own all services, which had a twin benefit impact on the port. First, it established control, and second, it empowered the company to provide integrated solutions to the service users. According to APSEZ, this approach helped them to emerge as a Port as well as a logistics service provider.

The report highlighted that most global landlord ports operate with private players managing terminals while the port authority provides key infrastructure and services. This often leads to inefficient communication and service flow among various port stakeholders. On the other hand, the port-plus model has enabled APSEZ to maintain better control over operations, delivering an improved customer experience and increased profitability.

Leave a Reply

Your email address will not be published. Required fields are marked *

LATEST NEWS