TM International Logistics Limited Ports and its infrastructure Roundtable Conference on Coal 28th October 2013 , New Delhi Tamal Roy TM International Logistics Ltd. ( A Tata Steel Subsidiary) OVERVIEW OF COAL IMPORT TMILL 2 Coal Import Trends Annual Coal Import Volume (MT) Coking Coal Non-Coking Coal 138 Total CAGR = 22.63 % 103 Inflection Point 73 69 59 39 43 29 50 103 CAGR = 31.11 % CAGR = 11.63 % 71 38 49 49 12 22 25 28 13 17 17 18 22 21 24 19 32 35 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 22 9 Imported Non-Coking Coal is the showstopper TMILL 3 Let’s slice the data further... Cargo Break-up in West Coast (MT) Cargo Break-up in East Coast (MT) 24 11 56 47 Coking Coal Non-Coking Coal Coking Coal 23 35 Major Port Non-Coking Coal 39 41 Non- Major Port Major Port Non- Major Port Major Origins: Non-Coking Coal : Indonesia and South Africa Shorter haulage Panamax/Supramax • • Coking Coal : Australia Longer haulage Capesize/Panamax Lion’s share of Coking Coal import through East Coast Ports due to proximity to Steel Plants Import through West Coast skewed in favour of Non-Coking Coal 4 TMILL Imported Coal Traffic at Select Indian Ports during FY13 Select Major Ports Select Minor Ports Deep-Water Minor Ports Mundra – 26 MT Kandla – 4.3 MT Mumbai– 4.2 MT Mormugao – 7.3 MT New Mangalore – 4.3 MT Haldia – 6.5 MT Dhamra – 8 MT Paradip – 12.7 MT Visakhapatnam – 11.8 MT Gangavaram – 10 MT Kakinada – 4 MT Krishnapatnam – 16 MT Ennore – 6 MT Karaikal – 5 MT Tuticorin - 3 MT TMILL 5 COAL LOGISTICS AND PORT INFRA TMILL 6 Imported Coal Logistics Low Value Commodity Logistics Cost – Major Component of Landed Cost Usage of Lager Vessel Freight Benefits through Economies of Scale Import through Deep Water Ports Capable of accommodating Larger Vessels Mechanized Handling System Quick turnaround of vessels Larger Stockyards Holding larger parcels Reliable Evacuation Methods Rake availability / Hinterland Connectivity Port infrastructure plays pivotal role in imported coal logistics TMILL 7 INDIAN PORTS – ISSUES AND CONCERNS TMILL 8 Inadequate Draft Dredging under taken during 2008-12 (mn CBM) Capital Maintenance 261.83 183.57 Mundra – 17 mtr Kandla – 12.5 mtr Haldia – 7.2 mtr Dhamra – 18 mtr Paradip – 14 mtr Mumbai– 11 mtr Mormugao – 11 mtr New Mangalore – 14 mtr Visakhapatnam – 11 mtr Gangavaram – 16 mtr Kakinada –13 MT 95.36 29.80 Krishnapatnam – 17 mtr Ennore – 13.5 mtr Karaikal – 15 mtr Tuticorin - 12.5 mtr Major Ports Non-Major Ports • No Indian Port is naturally deep drafted • No Major Port equipped to handle large vessels Importers can’t derive freight benefits • Huge Dredging Requirement Eating away Port’s profitability TMILL 9 Inadequate Infrastructure Limited dedicated coal handling facility at major ports Lower Productivity Semi-mechanised Handling System Higher Pollution Very high capacity utilization leading to Congestion Import traffic exceeding capacity Inefficient Port Operations Avg. Pre-Berthing Time at Major Ports during FY 12 (hrs) 78.11 18.48 19.68 Haldia TMILL 99.14 75.90 7.12 Paradip 62.11 58.32 22.28 Visakhapatnam 21.78 Ennore Coking Coal 11.65 Tuticorin Non-Coking Coal New Mangalore 81.77 40.23 Mormugao Kandla 10 Hinterland Connectivity Overdependence on Railways • Over utilised - Highly Congested Track Congestion Shortage of rakes Shortage of bottom opening wagons Zonal capacity constraints Problems related to InterZone re-deployment of rakes Alternates to Railways System • Direct Conveying Most efficient mean for importer adjacent to the port Tata Power – Mundra RINL – Gangavaram TNEB - Ennore High CAPEX – Guaranteed Cargo • Inland Waterways More than 14500 kms of waterways 5 National Waterways + State Waterways Low level of Utilization • Coastal Shipping 7500 kms long coastline covering 200 ports and 9 states Safer Mode of transportation Low level of Utilization Issues with Inland Waterways and Coastal Shipping • Inland Waterways Poor navigability Extremely strong seasonal river currents Theft / River piracy TMILL • Coastal Shipping Limited dedicated berths for coastal vessels Norms on age, manning and statutory surveys 11 similar to OGVs Implementation Issues in Capacity Augmentation Land acquisition issues TMILL Approval from various agencies Time and Cost Over Runs Credit Crunch 12 Way Forward • Integrated approach in Transport & Logistics Infrastructure Planning – Synergy between Major Port Trusts and State Maritime Board – Hub and Spoke Model in Port Development to derive maximum benefit – Rail / Road Connectivity with the Hinterland • Single Window for all regulatory clearances • Incentives for Inland Waterways and Coastal Shipping TMILL 13 Thank You TMILL 14