The Gateway to India

Mumbai Port has long been the principal gateway to India, and has played a pivotal role in the development of trade and commerce in the country – and in the prosperity of the city of Mumbai, in particular. Gemma Carter speaks to Mr Rajeev Gupta, Chairman of Mumbai Port Trust, about the port’s eventful history and extensive facilities, and the important role it will play in the continued economic development of the region.

Ships and boats have used Mumbai Harbour for centuries, but Mumbai Port Trust, as it is known today, originally came into existence in 1873, as Bombay Port Trust. The city of Mumbai originally consisted of seven islands, which were given to the English King Charles II as a dowry in his marriage to the Portuguese Princess Catherine of Braganza in 1662. In 1668, the islands were acquired by the East India Company on lease from the Crown for an annual rent of 10 pounds in gold – so little did the British Crown value the islands at that time. The company, which was operating from Surat at that time, was in search of a deeper water port where larger vessels could dock and found the islands of Mumbai suitable for development.

Under the company's rule, Bombay Port traffic grew by leaps and bounds. Bombay also became famous as a shipbuilding centre, mainly due to the expertise of the Wadia family, who were master shipbuilders to the Bombay Marina. Indeed, it was widely acknowledged that the ships made at the Bombay yards by the Wadias were as strong, handsome and well finished as those built in any part of Europe. “The port has an illustrious history in shipbuilding,” asserts Mr Gupta, “and the famous Wadia family built a number of ships for the Royal Navy, including the HMS Minden, in 1810."

After over two and a half centuries, the East India Company exited from India and Bombay passed under the direct rule of the British Crown in 1858. “Around that time, Elphinstone Land & Press Pvt. Ltd was a reclamation company that was working to reclaim land on both the western and eastern seaboards of the islands,” he tells us, “but the company ran into difficulties after the American Civil War, due to the general depression that followed and the fact that the demand for land, which had been growing, slowed significantly. The foreshore properties of the company were acquired by the government in April 1870, and subsequently transferred to Bombay Port Trust in 1873.”

A famous history

Today, Mumbai Port covers an area of about 800 hectares, a large part of which was reclaimed. “The Prince’s and Victoria Docks were commissioned in 1880 and 1888, respectively,” states Mr Gupta, “while the foundation stone for the Alexandra Dock (which was renamed Indira Dock in 1972, after the then Prime Minister Indira Gandhi consequent to India helping Bangladesh get freedom) was laid in 1905 and commissioned in 1914, and the excavated material from building this dock was used for filling and the construction of Ballard Estate, the business district in south Mumbai next to the Fort area. This area also houses the headquarters of Mumbai Port Trust at the Port House, which was commissioned in 1893.”

Over the decades that followed, the port underwent tremendous expansion, with the addition of berths, storage areas, and rail and road connections. However, the city of Mumbai’s rapid growth and expanding population had constrained the growth of the port by the 1970s, which led to the construction of a new port in the area. Nhava Sheva Port (officially Jawaharlal Nehru Port), across Mumbai harbour on the Konkan mainland, commenced operations in 1989 and has become a premier container cargo facility with excellent mainland connections. “Mumbai Port has its own issues in that regard, because everything has to pass through the city,” he explains. “In 2011–12, Mumbai Port handled around 56 million tonnes of cargo, around two thirds of which was oil – Mumbai is a natural landing point for oil on account of its proximity to Mumbai High, an offshore oilfield operated by ONGC. The discovery of the field, in the late 1960s, is a significant milestone in our history because it changed the product profile of the port.”

Improving container traffic

Mumbai Port Trust is currently working on a major project to establish an offshore container terminal (OCT) at the port, which will enable it to handle larger size container vessels and will provide a cost-effective and efficient gateway for imports and exports for companies in the nearby region. The project, which is estimated to cost US$250 – 300 million, is being developed on a PPP (public-private partnership) basis, the build-operate-transfer party being a consortium of Gammon India, Gammon Infrastructure and Dragados SPL of Spain. “We launched the project in December 2007 and it is due to be completed by the end of 2012 or early 2013, although it was originally only supposed to take three years to build,” Mr Gupta remarks. “The project has been delayed on account of the global economic downturn and various other issues, but it is now at a fairly advanced stage, and we are also implementing support facilities, including a new railway line to run from Wadala to Kurla estimated at US$28 million. The new line, for which Mumbai Port Trust has signed an MOU with Central Railway, will segregate goods traffic and provide dedicated rail connectivity to the port.” The new 5.66-kilometre line, with an elevated grade over the suburban line, will be linked to the 1,483-kilometre freight corridor in the western region, which is being built between Jawaharlal Nehru Port and Dadri in Uttar Pradesh.

A self-sufficient organisation

Today, Mumbai Port Trust is organised under nine departments: human resources; general administration; finance; mechanical engineering; traffic; civil engineering; medical, which includes a 250-bed hospital with a patient base of 110,000; marine; and vigilance. Mr Gupta tells us more: “The main functions of the mechanical engineering division include carrying out the operation, repairs and maintenance of all equipment and machinery related to our flotilla, dock machinery and electrical installations, as well as the renewal, replacement and procurement of floating craft, cranes, dock machinery and other electrical and mechanical equipment. This division also ensures the availability of mobile cranes, floating craft and vehicles to other departments, liaises with oil companies operating at the port regarding oil handling operations at the marine oil terminal, and co-ordinates all planning required for dry docking of vessels.

“The traffic division is responsible for the allocation of berths to a range of vessels; the planning, organisation and execution of discharging and loading operations on cargo vessels, including onshore workers and equipment; the management and storage of cargo in open yards, sheds and warehouses; documentation related to receipt and delivery of cargo; the sale by auction of uncleared cargo lying in the port; and the management of container freight stations, among other functions,” he continues. “The civil engineering department assists the Board in the conception, planning, design and execution of all civil engineering works required for Mumbai Port Trust, while it also carries out civil maintenance and repairs on all of our capital assets, such as berths, wharfs, seawalls, sheds, warehouses, office buildings and roads. Furthermore, this division carries out regular hydrographic surveys in the harbour and takes care of salvage, underwater works and the removal of wrecks.”

The marine division ensures expeditious, efficient and safe shipping movements inside and outside the limits of the port; it liaises with the Chief Mechanical Engineer to control, administrate, deploy and maintain infrastructure; it envisages, plans and oversees the future expansion requirements of the port in light of changes brought about due to modern technology, international trends and regulations, and the changing environment; and it aims to prevent, control, contain and eliminate marine pollution. Finally, the organisational oversight (vigilance) department has a three-pronged role: preventive vigilance, punitive vigilance and surveillance and detection. Its core functions include collecting intelligence about corrupt practices, investigating verifiable allegations, processing of reports for further consideration, & taking steps to prevent misconduct.

Supporting local industry

In terms of the facilities currently on offer at the port, there is a modern cruise terminal at Ballard Pier Extension, which caters to the needs of international and domestic travellers and operators of ocean liners. “About 50 cruise ships call at the terminal every year, which may seem a low number,” notes Mr Gupta, “but Mumbai is the largest cruise Port in India”. The cruise market is still developing in India, and we hope to increase the number of ships that we receive. We do intend to expand leisure activities in the area and to build a marina, convention centre and so on, but these plans are still at a very nascent stage.

“When the cruise terminal is not being used for cruise ships, it caters to Ro-Ro and general cargo, the cargo market in the area being particularly buoyant due to the fact that there are a number of automotive manufacturers operating nearby. The nearby cities of Pune and Nashik are automotive manufacturing hubs, where international majors like Volkswagen, and Indian companies such as Tata Motors, have set up shop. Indeed, the automotive export market in the region is growing, and companies are exporting to East and South Africa, Sri Lanka and the Middle East. Similarly, the luxury car market is growing in India, which means there is a higher import demand for luxury vehicles made elsewhere. Here at the port, we intend to install additional facilities to cope with this growth and to improve turnaround times,” he adds. Suzuki Motors, Ford, Honda and Toyota are among the port’s many users. The port is also planning a multi-storey car park facility to streamline automobile storage and export capacities.

The port also owns and operates its own railway, which is connected to the broad-gauge mainlines of the Central and Western Railways through an interchange at Wadala. The line runs along a 10-kilometre straight route between Indira Dock and Wadala, and provides rail connectivity to the hinterland for export-import cargo, such as sugar, grain, rice, iron and steel, cement.

For ship repair activities, Hughes Dry Dock in Indira Dock is able to provide all major services, as Mr Gupta describes: “The pumps at the 304.04-metre-long dry dock are electrified and are used for impounding an extra 1.2 metres of water, allowing the water depth at all of the berths inside Indira Dock to increase from 9.3 to 10.5 metres. During fair weather seasons, the water level can be increased up to 11.5 metres. Indira Dock, itself has 27 berths, mostly for medium-sized container, bulk and general cargo ships, with a draught of up to 9.14 metres. In addition to oil and cars, other types of cargo handled at the port include coal, chickpeas and pulses, steel coils, chemicals and LPG, and our customers include Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), ONGC, Aegis Logistics, Tata Power and Maharashtra State Power Generation Co., Jindal Steel and Uttam Steel. Ours is the most preferred port for giant-sized project cargoes and heavy lifts.

“With regard to some of the port’s other facilities, we support local fishing activities through the provision of fishing jetties, where some basic processing is also carried out. We also provide ship-breaking facilities – Alang, in Gujarat is the country’s main centre for ship breaking, and Mumbai Port is number two. Environmental upgradation and safety of workers at the ship-breaking yard is a major concern that we are addressing. Moreover, we have plans to enhance the port’s ship repair and shipbuilding capabilities in the near future,” he informs us. In fact Mazagon Dock Ltd, a leading defence shipbuilder, is located within the port’s boundaries.

Leveraging on assets

The greatest attribute of Mumbai Port is, without doubt, its geographical position next to the commercial, trading and financial capital of India, and its long history means that it has always been closely linked with the city. “Furthermore, our huge land bank, which is probably worth in excess of US$40 billion, is a major asset that is waiting to be tapped – we are just waiting for the government to complete its current process of policy-making, which should help us unlock this huge asset,” reveals Mr Gupta. Indeed, most iconic heritage structures in Mumbai, such as the Gateway of India and the Taj Mahal Hotel, are on port property. “There are many old lighthouses along the coast of Mumbai and we are gradually converting these buildings into tourist destinations. In addition, the surroundings of the city contain many birding hotspots, such as Sewree Bay, where thousands of flamingos flock to each winter. We take great pride in providing a suitable winter home for these birds by actively maintaining the quality of their habitat and protecting the food-rich mud flats of the bay. Indeed, by planting mangroves and controlling pollution, we have created an ideal habitat for a whole host of waders and exotic birds.

“Our future success depends on our ability to compete with private ports and with our sister port (Jawaharlal Nehru Port),” he explains, “and to leverage on our assets in terms of real estate, skilled manpower and the multi-modal handling of cargo. Depending on road transport alone will not work – we have to strengthen our railway network, and we also need to look at transporting cargo by water, because the port is connected to a network of inland waterways.”

More productive, more efficient

Achieving these goals will also require modernisation with regard to Mumbai Port Trust’s management system, says Mr Gupta. “We will have to implement a modern ERP system, for example. Unfortunately, there have also been a few incidents of ships colliding in the harbour. We have recently upgraded our VTS (vessel traffic service) system with a state-of-the-art VTS from Atlas Elektronik of Germany. There is currently some restriction on the depth of our approach channel and our dredging efforts have not proved to be very successful. However, we are interested in dredging for deeper channel and deeper berths, or in shifting the majority of our cargo handling activity out to the anchorage – or an SBM (single-buoy mooring) for oil.” Furthermore, the Trust is taking a fresh look at proposals for the implementation of an SBM system, and at the possibility of introducing a real-time tide measurement system, which would allow the port to bring in ships using the tide to its advantage. “The government is in the process of installing an Automatic Identification System (AIS) along the entire coastline of India, Mumbai being one of the major beneficiaries of this system,” he asserts, “and we intend to equip all fishing boats and smaller vessels in the port with transponders, which will enable us to bring in greater discipline among these vessels, while improving security.

“Looking ahead, we have a set of key objectives that we want to achieve, including the improvement of productivity, efficiency and turnaround time at the port. At the same time, however, because we are situated so close to the city of Mumbai, we have to ensure that our cargo operations gel with the future needs of the city. This will mean pushing ‘dirty’ cargo activities to the other side of the harbour away from the city, as well as doing a mix of cargo operations and leisure activities, and carrying out some real estate development. Development of eastern waterfront and improving passenger ferry services to the nearby destinations, including seaplanes, is another priority area. In addition, we will be promoting LNG as a fuel – both for power utilities and for local transport – and looking at creating an LNG terminal within the port,” Mr Gupta concludes.

Mumbai Port is a benevolent employer in that employee welfare is given a due consideration with pension, free medical aid for the family, assistance for education of children, housing at concessional rent and so on. The port also participates in and promotes sports activities, indoor and outdoor alike, including sailing/yachting training. Besides, the port contributes heavily towards environmental and ecological upgradation, with several green areas across the estates including the large botanical garden 'Sagar Upavan' at Colaba, and maintaining a mangrove park at the Sewree mudflats.

Mr Gupta has stated that the annual turnover of the port is INR 11.25 billion (US$210 million) and its expenditure is INR 10.29 billion (US$192 million), hence an operating surplus of INR 960 million (US$18 million) and an operating ratio of 91 percent has been achieved – in spite of heavy fixed costs, mainly in the form of high labour costs. In fact, employee costs alone account for 75 percent of the port’s total expenditure. The number of employees on its payroll is 16,500 and the number of pensioners on its roll is 34,000. The estimated liability on account of post retirement benefits to the employees is INR 60 billion (US$1.11 billion), of which INR 47.99 billion (US$893 million) is funded by the port over a period of time. It is expected that the entire liability will be funded and the balance sheet cleaned up by 2013–14.

The average income for the port per tonne of cargo handled is INR 200 (US$3.72) and the average cost per tonne is INR 184 (US$3.42). With further reduction in costs by way of natural attrition and a voluntary retirement scheme, along with various proactive measures for increasing in traffic and productivity, the port is expected to be a preferred destination by 2013–14, both on the service front and in terms of cost to the customer. Various steps towards achieving the above objectives have already been taken and positive results are expected.