JSW Infrastructure Ltd is investing 10,000 crores on port-related projects

JSW Infrastructure Ltd is investing 10,000 crores on port-related projects

We as a group are committed towards the “Make in India” story and will work closely with the government to propel the economic growth. CAPTAIN BVJK SHARMAJoint Managing Director & CEO JSW Infrastructure Ltd.
JSW Infrastructure has plans to increase operational capacity to 200 MTPA in the next four years? How do you plan to achieve this? Are there any plans of setting up port in overseas?
Currently, we are working on several projects in Maharashtra that includes, Jaigarh port phase II, Jaigarh connectivity, Dharamtar riverine port expansion, Salav Captive Jetty, Nandgaon Captive Jetty and Nandgaon connectivity. The total investment that we are planning on these projects is around Rs. 10,000 crores. As far as phase II of Jaigarh port is concerned, the work is in full swing and involves construction of Container Terminal, LNG Terminal, Crude Oil & POL Terminals and Multipurpose Berths. Once the second phase gets operationalized, the estimated capacity of the Jaigarh port by 2020 will be around 80 mtpa. Located in Dolvi, JSW Dharamtar port is a riverine facility that will handle around 40 mtpa by 2020 with an investment of about Rs. 440 crores in its initial phase. In addition to this, our two planned projects at Paradip Port will have the total handling capacity of 48 mtpa by 2020. We are also undertaking a Greenfield captive jetty project at Nandgaon, Maharashtra which will handle Bulk, Container, LNG, Chemicals and other cargoes. We are expecting this facility to handle 17 mtpa by 2020 in its Phase I. So in all, we are targeting 200 mtpa of capacity through Greenfield and brownfield expansions in the next four years. With respect to overseas investment we are evaluating some projects in the Middle East.
The Ministry of Shipping has identified Jaigarh Port for the formation of a Coastal Economic Region under the Sagarmala Project on the West Coast, what are the opportunities this offers for JSW Jaigarh Port?
Ministry of Shipping has identified Jaigarh Port in the formation of a Coastal Economic Region (CER) in the visionary Sagarmala Project on the West Coast along with JNPT & Mumbai Port which will poise to drive the socio-economic development of the region. Origin –Destination Studies have been carried out and National Perspective Plan has been recently released. Once our connectivity projects get commissioned, full potential of the port lead development through Jaigarh would be utilised. Rail Connectivity projects such as Jaigrah-Digni, Chiplun-Karad once completed, the hinterland reach of Jaigarh Port would extend upto North Karnataka & Central Maharashtra till Hyderabad. Government of India under its Sagarmala initiative has taken a decision to expand the two lane highway of Jaigarh -Nivali into a four lane highway or alternatively construct a new 4 lane road in a new alignment. In addition, our partners have received necessary sanctions for the pipeline corridor for the gas pipeline project, which will be connected upto Dabhol in North & Mangalore in South. We have also prepared special coastal berths, which can berth Handy max vessels or three 8000 DWT Mini Bulk Carriers simultaneously. All this will trigger very high demand for Port-Based Industries like Steel, Cement Grinding Units, Crude Refinery, LNG Regasification, Fertiliser Manufacturing Units, Edible Oil Refinery, SMEMSME
Industrial Cluster Development & other value added projects. It will also boost Coastal Tourism and Urbanisation.
JSW Infrastructure has recently signed a concession agreement with Konkan Railway (KRCL) to develop a new rail corridor. Tell us more about this agreement and its benefits?
The project will play a critical role which has been conceptualised by KRCL under Joint Venture (JV) model of Rail Participative Policy promulgated by MoR. The JV company is formed as Jaigarh Digni Rail Limited (JDRL), in which JSWJPL, KRCL and Maharashtra Maritime Board
(MMB) are the shareholders. The estimated cost of the project is Rs. 771 Crores, which is being funded through combination of equity and debt. The concession period is of 30 years. The alignment for this new rail line passes through difficult terrain of Sahyadri Mountains which would necessitate construction of about 18 km long tunnels. The estimated time of completion is 30 months and the rail corridor is expected to
handle around 12 mtpa cargo to and from Jaigarh Port. The project will usher a new era of development for the region and
provide impetus to the economic activities with the new rail link as the hinterland reach of the Port will cover Entire Maharashtra, North Karnataka and extend upto Hyderabad. We are sure this will bring a positive change in the socio economy of the region by creating more jobs and entrepreneurship avenues. We as a group are committed towards the “Make in India” story and will work closely with the government to propel the economic growth. Railway board has declared this project as a ‘Special Railway Project’ under the Railway Act 1989. Jaigarh Digni Rail Project has been one of the projects which is being monitored by the highest level under the Ministry of Railways and the PMOs office as it is declared as a project of ‘National Importance’.
What are the IT-enabled solutions JSW Infrastructure has implemented at its ports for seamless transfer of cargos?
As for as IT Automation in our Ports-Terminals is concerned we have implemented PIMS, ie, Port Information Management System which would help in Interface with multiple systems / applications, Automated collection and recording of data, etc. We have also implemented Port Information Real Time Dashboards Overview which gives us a Graphical representation of entire systems and facilities, Live status reporting, constant alerts and is accessible anywhere on our JSW Network. Other IT - enabled projects which we have implemented are Dynamic Vessel
Monitoring system, Barge Automation System, Marine Simulator System,CCTV (ISPS & Custom requirement) & Ring OFC Network.
How successful has been the PPP model in the port sector? What are your suggestions to make it more attractive to private players?
On the PPP front there are 5 reset buttons, Government is working on 4 of them - Risk allocation, Renegotiation, Dispute Resolution Mechanism, Independent Regulation. The fifth one is Re-investing, where the Government should consider investing upto 26 percent
equity in projects by repaying back the money it charges like license fees, royalty charges, lease rentals, upfront fees, etc. For rational allocation of risks among various stakeholders, the Model Concession Agreement (MCA) should be revisited. The “One-size-fits-all” approach should be avoided and project-specific risk assessment should be undertaken. Private sector should be protected against any abrupt changes in the economic or policy environment. This will enable the PPP model to get better. As of now PPP is less public private partnership and more
Private, Private & Private. There are issues that need to be addressed. Lack of good quality DPR is a pre-requisite. Time taken for environmental and other statutory clearances, dredging related issues, and somehow the tariff fixing methodology by TAMP has a negative impact on the project developers due to several factors. For sourcing long-term capital at low-cost, banks and financial institutions should be
encouraged to issue deep discount bonds, also known as zero coupon bonds. This will reduce the debt servicing charges during the initial period of the project. Indian Ports Association (IPA) should have a panel of good quality consultants (pre-negotiated) which will save time and
will enable a good quality DPR in place.
The government has announced a number of initiatives to facilitate and grow maritime trade, how has this helped the sector?
The Government has already added more than 20 percent capacity across 13 major ports over the last 2 years from a capacity of 800 MT in March 2014 to 965.3 by March 2016. Operating income of Major Ports has increased at the rate of 8 percent from FY 2014-15 (10,190 crore) to FY2015-16 (10,961 crore). Improvement in efficiency parameters like turnaround time has lowered logistics cost for the trade, resulting in annual cost saving of Rs. 400 Crore. But over the years we have seen that the trend lies in substantial growth in traffic volumes at private
ports due to superior efficiency, deeper draught and competitive tariff structures. For instance Mundra Port in Gujarat is handling more than 100 MT, JSW Jaigarh Port in Maharashtra has started handling large Capesize Vessels since April 2015, Krishnapatnam & Gangavaram which
were commissioned in 2008 are fastest growing on the East Coast and has already overtaken some of the Neighboring Major Ports in terms of
Volumes. Going ahead Current Capacities of our Ports would be enhanced from present 1400 MTPA to 3130 MTPA by 2020 out of which
nearly 50 percent would be driven by non-major or the private ports. Indian Logistics Industry has witnessed an exponential growth since the new Government has taken over and it is expected to be worth USD 302 billion by 2020. Government today is forming policies & giving directions. It is time to expect the unexpected and innovate. Initiatives such as the DFC, DMIC, Sagarmala, Bharatmala, Smart Cities,
Passage of GST will reduce the logistics cost and will drive down the GDP growth in our country.

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