Page|1

CHAPTER - I
INTRODUCTION
1.1 Ministry of Shipping
Since ports are trade gateways for a nation, their ability to meet the increasing demands of a
rapidly growing economy is crucial for addressing the rising import and export traffic. With
the objective in mind, the planning commission and the Ministry of Shipping, Road
Transport and Highways have initiated a coordinated national level strategic planning
exercise to identify, in a structural manner, the required investments in ports and related
infrastructure, while at the same time reducing dependence on government funds.
All the major ports are under the administrative control of the union Ministry of Shipping and
are under the regulatory authority of the Tariff Authority for Major Port(TAMP) except the
new Port of Ennore . Each Port is managed by Port Trust with Chairman being appointed by
Ministry of Shipping. Other member of port trust represent various interest groups, including
labours, the shipping industry and major customers.
The minor or intermediate ports come under the administration of their respective state
government. While three states, Gujarat, Maharashtra and Tamilnadu have constituted
statutory maritime boards to oversee the functioning of the minor ports in the others this role
is performed by one of the state departments. Maritime boards have powers similar to those
other major port trust.

1.2 Major Ports in India

The ports are gateways for India’s international trade. India is endowed an extensive
coastline of about 7600 km dotted with 12 major ports and 187 minor and intermediate ports.
Among this 12 major ports, 4 are located on the west coast Kandla, Mumbai, JNPT,
Mormugao.
Four of the major ports i.e. Calcutta, Mumbai, Chennai, Mormugao are more than 100 years
old. The 12th major port, the port of Ennore, the first corporate port in India has commenced
operations in the year ended 2000.
Major port means any port for which the central government may by notification in central
gazette declare under Indian Ports Act 1908, or may under any law for the time being in force
have declared to be Major Port. Minor port means any port, which the state government may
by notification in the state gazette, declares as a port Major ports are autonomous bodies,
administrated by board of trusties constituted for each port under the major port trust act
 Page|2

1963. The overall responsibility for efficient management and operation of major ports vests
in the central government. Other ports are under the control of the respective state
government.
Major ports of India
1. Ennore Port.
2. Cochin Port Trust.
3. Chennai Port Trust.
4. Jawaharlal Nehru Port Trust (JNPT).
5. Kandla Port Trust.
6. Calcutta Port Trust.
7. New Mangalore Port Trust.
8. Mormugao Port Trust.
9. Port of Mumbai Trust.
10. Paradip Port Trust
11. Tuticorin Port Trust.
12. Vishakhapatnam Port Trust.

1.3 Overview
Kandla Port plays a major role in the country's international trade. Having notched up a
string of success, it has emerged as a forerunner, and has carved a niche for itself, by its
steady growth and economy of operations. "Kandla port will emerge as a vibrant, world
class, multi-cargo port offering services at multiple locations and having a dominant share
of regional cargo by virtue of its ability to effectively leverage its locations and land
resources for facilitating growth of economic activities and investments, with the
objective of developing mutually beneficial and sustainable linkages with port based
industries and users, thereby making Kandla the driver of economic growth in the region"
mission is.
 To be the most economical major port, rendering cost effective value of
service to our customer.
 Achieve international standard of excellence in cargo handling focus on
customer satisfaction.
 Navigate the challenges and convert them into opportunities through the
leverage of foresight.
 Adopt the changing trends and challenging demands.
 Page|3

Kandla Port continues to be India’s no. 1 Port with capacity of 115 MMT (106 MT in 2015-
16) traffic handling. It has been at top for many consecutive years. Kandla Port contributes
16.5 % to India’s total Major Port handlings. Port has fourteen dry cargo berths with total
length of of 3.15 k.m in straight line and 6 oil jetties for handling of POL and chemical. The
single buoy mooring in Vadinar can handle very large Crude oil Vessel (VLCC) with
pumping capacity of 5000 tonnes per hour.

1.4 History
The History of the Major Port of Kandla goes back to 1930, when H.E. Khengarji III, the
Maharaja of Kutch built a RCC jetty at Old Kandla. Ships with draught up to 8 metres could
berth in the said jetty throughout the year. This Jetty became the nucleus of what in later
years was to emerge as the Kandla Port.
Kandla Port was declared a Major Port on April 8, 1955 and subsequently, in the year 1963,
the Parliament enacted Major Port Trusts Act, 1963, and a Board was constituted under the
provisions of the said Act on 29th February 1964. Since then this Major Port of Kandla has
come a long way in becoming the "Port of the New Millennium”.
In 1946-47, the cargo handled at the Port of Kandla was 58 thousand tones, whereas in year
2014-15, Port has Created History in Cargo Handling by handling whopping more than 100
Million Metric Tons of Cargo. The performance was even more commendable as it came up
despite continuing impact of Global economic recession and Industrial slowdown in the
country's economy.
Kandla Port was also pioneer to take up Indian Oil Corporation’s Project of Single Point
Mooring in 1976 to handle Crude at its Satellite Port at Vadinar near Jamnagar. ESSAR
happens to be second company which has also now availing this facility with an SPM and
four product jetties.
Kandla Port is also a partner in Kutch Railway Company to improve connectivity in the
region. It has contributed 1/4th of the Project cost towards Vessel Traffic Management
System (VTMS) in Gulf of Kutch.
The Port’s liberal Public Private Participation drive since long has resulted in the Port
becoming beacon of benchmarking in the Port Sector. Some of the early moves were
developing of Liquid Tankage Facility for storing of liquid cargoes, which has resulted in the
development of largest Tank Farm Storage facility in India. With over 2.1 lakh Kilo Litres of
tankage and over 8 lakh Kilo Litres of tankage built and operated by Private tank farms, the
 Page|4

Port is able to provide with competitive handling of liquid cargoes. The Port’s efforts to
connect the tank farms directly through pipelines from all its jetties have resulted into active
participation by the private entrepreneurs, which has further improved productivity as well as
cargo volume.
On the other side, land is also provided just outside the gates of the Port for construction of
Godowns, which has enabled exporters and importers to use the Godowns as storage points
for cargo before clearance. Kandla Port’s endeavor for public private participation in port
operations has also encouraged substantial private investments in modern equipments inside
the Port, which has resulted into substantial investment in Handling Equipments.
This is one of the major reasons of improvement in the productivity, clearance of cargo from
wharf for import cargo and proper feeding of vessels for export cargo. Similarly, the varied
private equipments have aided in handling a range of Commodities.
Kandla has emerged as a nerve center of India’s economic activity and playing a vital role in
the growth and development of the regional economy. The port has already positioned and
has been recognized as India’s biggest POL Products Handling Port. Also, the largest
Offshore Oil Terminals have been built in the Port waters of Kandla Port. The Port has an
impressive track record of contributing significantly to the country’s international maritime
trade over fifty years.
Numerous welfare measures have been implemented. The e-governance in the Port
Administration and Port Operations has been initiated with a lot of transactions now going
online. The KPT has also taken several measures in last 2-3 years to increase Transparency
by introducing e-tendering, e-auction, standardized tender documents etc.
On January 20, 1952, Pandit Jawaharlal Nehru, then Prime Minister of India, laid the
foundation stone for mew Port on the western coast of India. It was declared a Major Port on
April 8, 1955 by late Shri Lal Bahadur Shastri, then Ministry of Transportation and the Port
Trust was formed in 1964.
Since, then the Major Port of Kandla has come a long way in becoming the Port of new
millennium. The development of Port took place in two distinct complex wise
 Oil jetty area
 Cargo berth area.

1.5 Port Location:

Kandla Port is situated in the creek and is 90 Kms. From the mouth of the Gulf of Kutch. It
is protected natural harbour.
 Page|5

Figur 1.1 Port Layout

Latitute: 23 o 01‘N Longitude: 70 o 13 ' E

 Page|6

1.6 Key Objective of Port:

 To provide efficient and economic port services.
 To render value for money and value added services to customers
 To create facilities of international standard and facilities quicker turnaround
of vessels.
 To maintain peaceful industrial relations by recognizing the work force as an
asset and develop them to the changing port scenario.
 To participate in social developed by contributing its mine to the society at
large.
 To be environment friendly.

1.7 Strategic and Climate Advantages of Kandla Port :

 All weather port – 365 days, 24*7.
 ISO 9001-2008& ISO 14001:2004 Port and I.S.P.S. compliant port.
 The Indian major port that is nearest to the Middle East and Europe.
 Protected and safe harbour.
 Fourteen Multi Purpose Cargo Berth with quay length of 3.15 km.
 Six Liquid Jetties.
 Total Custom Bounded Port Area is 330 hectares.
 2 Nos. of 63 tones capacity Mobile Harbour Cranes.
 Port with highest liquid storage capacity in Asia.
 Lowest cost per ton amongst all Major Ports and non-major ports.
 Excellent road and rail connectivity.
 Low tariff than other Major Ports.
 Deeper Draft of 13 Mtrs for kandla and 33Mtrs for Vadinar.
 Security by CISF.
 Page|7

1.8 Vision:
To be the one of the most economical Modern Ports rendering cost effective services
to our customers.

1.9 Mission:
Kandla Port will emerge as a vibrant, world class, multi-cargo port offering services
at multiple locations and having a dominant share of regional cargo by virtue of its ability to
effectively leverage its locations and land resources for facilitation of growth of economic
activities and investments, with the objective of developing mutually beneficial and
sustainable linkages with port based industries and users, thereby making Kandla the driver
of economic growth in the region.

1.10 QHSE Policy:

“We at Kandla Port Trust are committed to Providing Maritime Services Timely of
best Quality with cost effectiveness & matching the expectation of customers with
professionalism with commitment to managing environmental matters as an integral part of
our business. In particulars, it is our policy to assure the environmental integrity of our
processes and facilities at all times and at all places. We will do so by adhering to the
following principles”:

1.10.1 Compliance:
Comply with applicable laws and regulations and will implement programs and
procedures to ensure compliance. Compliance with environmental standards will be a key
ingredient in the training, performance reviews and motivation of all employees.

1.10.2 Risk Reduction, Prevention and Resource Management:

Seek opportunities, beyond compliance requirements, for reducing risk to the
environment, establish and meet our own quality standards where employee management
systems and procedures are specifically designed to prevent activities and/or conditions that
may pose a threat to the environment. looking for ways to minimize risk and protect our
employees and the communities in which we operate by employing clean technology,
including safe technologies and operating procedures, as well as being prepared for
emergencies.
 Page|8

Strive to minimize releases to the air, land or water through use of cleaner technologies and
the safer Handling. Minimize the amount and toxicity of waste generated and will ensure the
safe treatment and disposal of waste. Manage scarce recourses such as water. energy, land
and forests in an environmentally sensitive manner.

1.10.3 Communication:
Communicate our commitment to our employees, vendors and customers.Soicit their
inputs in meeting our ESM goals.

1.10.4 Continuous Improvement:

Continuously measure our progress. We will review our progress at least on an
annual basis. . Continuously seek opportunities to improve our adherence to these principles
and will periodically report progress to our stakeholders. Comply the requirement of
International Standards for continual improvement.
 Page|9

CHAPTER- II
ORGANISATION OF KANDLA PORT

Kandla Port is a major port and basically managed to the principle of a service port
management system. This implies that the infrastructure, the superstructure and the basic port
service such as cargo handling, storage, pilotage etc. provided by public sector. The ministry
of surface transport appoints the officers of Kandla Port Trust. The board of trustees is the
essential governing body, which is responsible for the overall management policy of port.
The daily management is trusted to the chairman, the deputy Chairman and HOD’s.

Principle officers:
o Shri. Ravi M Parmar, IAS-Chairman.
o Shri. Alok Singh, IRS-Deputy Chairman.
o Shri. Shishir Srivastava, IRS-Chief Vigilance Officer
o Shri. Bimal Kumar Jha, Secretary
o Shri. D N Sondhi, FA & CAO.
o Shri. Mukesh Balani, Traffic Manager.
o Shri Y.P Singh, Chief Mechanical Engineer.
o Shri P Ashok Raj, Chief Engineer.
o Shri T.Shrinivasan, Deputy Conservator.
o Shri K R Gandhi, Chief Medical Office.
o Shri G.S. Rao, Chief Operation Manager.
 P a g e | 10

2.1 Existing Structure of Kandla Port:

BOARD OF
TRUSTEES

CHAIRMAN

Dy.CHAIRMAN

General Traffic Marine

Admin. Finance Deptt. Civil Engg. Mechanicsl Medical Project moni.
Deptt. Deptt. Deptt Engg.Deptt.
Deptt. Deptt. Cell

Traffic Deputy Chief Chief Chief

Secretary FA&CAO Mechanical Chief Project
Manager Conservator Engineer Medi.
engineer Officer officer

Dy.HOD Harbour
Dy.HOD Dy.HOD Master Dy.HOD Dy.HOD Dy.HOD Dy.HOD

Divisional Divisional Divisional Divisional Divisional Divisional

Officer Officer Officer Divisional Divisional
Officer Officer Officer
Officer Officer

2.2 Management of the Port

The Port is an Autonomous Body constituted by the Government of India under the MPT
Act, 1963. At the top of the organization, there is a Board of Trustees, consisting of the
Chairman, Deputy Chairman and 17 other members, representing Central Government, State
Government, Railways, Customs, Coast Guard, Trade & Commerce, Mercantile Marine
Dept., Associations, representing Port-users, Labour employed in the Port & other Interests,
etc., as may be appointed by the GOI from time to time.

2.3 Organisational Set up :

The Kandla Port Trust is having nine departments viz., General Administration, Finance,
Civil Engineering, Mechanical Engineering, Medical, Traffic, Vigilance, Marine at Kandla
 P a g e | 11

and Off-shore Oil Terminal at Vadinar and the operational departments are providing various
services to the Port-users, including infrastructural facilities. Shri Ravi Parmar, IAS, was the
Chairman of the Port during the year under report. Utmost customer satisfaction through
quick, efficient and qualitative services, has been the foremost objective. The Port’s major
thrust has been on replacement and modernization of existing productive assets, in order to
maximize operational efficiency and to ensure sustained growth in cargo handling capacity,
to cater to the ever increasing expectations of customers.
The Kandla Port is an ISO 9001: 2008 & ISO 14001:2004 certified and ISPS compliant Port.

Board of Trustees for the Term 2016-18

1. Shri Ravi M Parmar, IAS Chairman

2. Shri Alok Singh
3. Shri Rajat Sachar Advisor (Eco), Representative of Ministry of Shipping
4. Shri P. V. R. Reddy, IRS
5. Shri Ajay Bhadoo, IAS
6. Shri Sanjay Goel, IRTS
7. Comdr. Yagendra Kumar
8. Shri S. B. Mishra, DIG
9. Capt. S. K. Shukla, (Rep. MMD)
10. Shri M. L. Bellani
11. Shri Mohan K. Aswani
12. Shri Ranchhodbhai C. Faldu
13. Shri Bharatbhai D Rajgor
14. Shri Mavjibhai B. Sorathia
15. Shri Lakvindersingh, IFS
Dy. Chairman
Commissioner of Custom, New Kandla,
Representative of Dept. of Custom
CEO and Vice Chairman , Gujarat Maritime Board
Chief Freight Transportation Manager, WR,
Representative Indian Railway
Chief Staff Officer to FOGNA, Headquarters ,
Gujarat Representative Defence Services
Chief of Staff, Headquarter, Coast Guard
Regional (NW),Gandhinagar, Representative
Defence Services
Principal Officer, Marine Mercantile
Department,Kandla, Representative MMD
Representing Labour
Representing Labour
Representing Other Interest
Representing Other Interest
Representing Other Interest
Representing Ministry of Environment,
Forest & Climate Change
 P a g e | 12

2.4 Description About Various Departments and their Functions:

2.4.1 Traffic Department :
This department takes care about loading, unloading of cargo, storage of cargo, etc. in
the port during the transit of the relevant cargo. All these functions are handled under the
head of department known as the Traffic Manager.

2.4.2 Marine Department:

This department looks after the functions of the pilotage of the vessels at the port
enforcement of marine rules, regulations, etc. All these functions are handled under the head
of department known as the Deputy Conservator.

2.4.3 Civil Engineering Department:

This department looks after the civil construction like berths, roads, buildings and
their maintenance. All these functions are handled under the head of department known as
Chief Engineer.

2.4.4 Finance Department:

This department looks after the accounting procedures of port and sees it is carried to
MPT Act, it maintains the accounts of port, which provide information about revenue and
expenditure. All these functions are handled under the head of department known as
Financial Advisor and Chief Accounts Officer.

2.4.5 Medical Department:

This department is responsible for providing appropriate medical treatment to the port
employees and their dependents. All these functions are handled under the head of
department known as the Chief Medical Officer.

2.4.6 General Administration Department:

This department indicates the work of coordination with other department, conducting
the meetings of the board of trustees, personnel management, estate management, legal
matters and industrial relation and labour welfare, public relations, etc. All these functions are
handled under the head of department known as the Secretary.
 P a g e | 13

2.4.7 Mechanical Department:

This department looks after the operations and maintenance of the various cargo
handling equipment’s, marine crafts, etc. it is also actively participating in the efficient and
smooth handling of different types of cargo at the port as also for uninterrupted supply of
electric power for various operations. . All these functions are handled under the head of
department known as the Superintendent engineer.

2.4.8 Project Monitoring Cell:

This project monitoring team of Kandla Port Trust defines monitoring as watching the
progress against time, resources and performance schedule during the execution of the
project.
 P a g e | 14

CHAPTER-3
PORTER’S FIVE FORCE ANALYSIS INCLUDING SWOT ANALYSIS
3.1 Porter Five Force Analysis
Named after the professor and researcher Michael E. Porter, this model identifies and
analyses five competitive forces determining in every sector, required for determining its
profitability degree and shaping a competitive strategy. Next image shows each force and the
principal factors that act on them.
The determination of the profitability level of the maritime sector is carried out in the port
sector there are situations of over-capacity in installed production and Products , services are
not sufficiently differentiated and The port sector is highly concentrated in a reduced number
of large companies.. by a series of questions regarding each competitive force, if the answer
of the question is True, that factor will increase the impact of the economic force in the
sector; by the contrary if the answer is False it will reduce this degree. This method can be
applicable to any business area.
Figure 3.1 :Porter Five Force model
 P a g e | 15

3.1.1 Bargaining Power of Buyers

The sector is not dominated by customers, although it's true they have certain power over
suppliers, in this case customers are determined as import / export companies of the
hinterland of the Kandla Port. In the port system there are other customers such as shipping
companies and forwarding agents, but this micro-environment analysis focuses on import /
export companies that use port services to transport their goods as they represent the final
customer. Customers have certain power over the suppliers of port services by different
considerations: inexistence of high switching costs, large sizes of orders and high level of
services information offered by suppliers.
A first consideration relating to the limitation on the bargaining power of customers is the
relative importance of product costs. If the product is one of the essential components or
represents a significant part of their production, (as in the case of most import and export
companies that use the services of the port of Kandla, specialized in bulk traffic necessary for
various industries such as construction, ceramics, fertilizers…), it is very likely that
customers try to cut prices as much as possible. If, on the contrary, the product represents
only a small proportion of their costs, it is easier to obtain better prices.

3.1.2 Threats of Substitute

The threat of substitute products in this sector is virtually zero, since there is a low degree of
substitutability in the maritime transport. The services provided from the port infrastructure
and facilities are often irreplaceable, so demand often has a low elasticity with respect to
price and quality of the service. Therefore, the risk of abuse of authority is evident and grows
proportionally with the absence or inadequacy of alternative means of transport.
In the pie chart below it stands out the high percentage of imports and exports carried by sea
in India, especially in the case of imports, being one of the causes the limited degree of
substitute means of transport which have the same characteristics as maritime transport. The
high percentage of imports carried by sea is due to the predominant presence of raw materials
from distant countries that have to be necessarily transported by this mean and due to the
constant irruption of manufactured goods ; and the high level of exports is due to the export
capacity of India in some strategic sectors such as Agriculture, construction, automobile...
The next most used mean of transport is the road, transport that is often connected with the
maritime one in order to carry the goods to or from the exporter or importer port,
respectively.
 P a g e | 16

Figure 3.2 Chart Distribution of means of transport employed in India imports and exports.

Export
By Sea By Air By Other

2%

32%

66%

Import
By Sea By Air By Other

2%

36%

62%

Source :WTO stat official

 P a g e | 17

3.1.3 Bargaining Power of Suppliers

In this case, we define suppliers as companies providers of port services, such as:
 Technical-nautical services:
I. Pilotage services
II. Tugboats services
III. Mooring and unmooring services
 Transport services:
I. Loading and unloading of vehicles with passengers
 Disposal of ship-generated waste service
 Cargo handling services.

3.1.4 Threat of New Entrant

Currently, this competitive force poses no threat to the port sector according the Porter
analysis made, partly due to its medium/low level of profitability. Initially this was an
extremely attractive sector because of its high barriers to entry (public port domain and large
investment in infrastructure). However, the level of profitability has declined because of the
difficult economic situation so the entry of new competitors has also been reduced, after
years in which the high economic growth in India attracted many companies in the maritime
sector in general, mainly foreign.
This reduced threat of new entrants is due in part to economies of scale in the sector, as ships
are a mean of transport whose capacity increases in proportion to its size. Hence there is a
general tendency to increase their size as well as ports modify the physiognomy of their
infrastructure in order to adapt to the needs of ships seeking access to their facilities.
 P a g e | 18

3.1.5 Rivalry among Existing Competitors

According to Porter's analysis, in the port sector there is a high degree of rivalry between
competitors, and we can also say between the direct competitors of the Kandla Port ( Mundra
port, JNPT etc.).
More than a competitive force, rivalry among existing competitors becomes the result of the
previous four forces. The rivalry defines the profitability of a sector: the more competition
exist in the sector, it will be less profitable and vice versa; relationship that occurs in the case
of the port system.
This high degree of rivalry among competitors is determined by factors such as the slow
growth of the industry, since this is not a mature industry where competition not only
becomes a scene for seeking greater market share. Rivalry also intensifies when fixed and
storage costs are high since, because of this fact, companies try to make use of the maximum
of its productive capacity. But, when companies employ all their productive capacity the
entire industry is affected by a certain degree of overcapacity in installed production
(equipment, infrastructure, personnel…), fact reflected in the port system in lower prices
accentuating competition.
Rivalry also intensifies because of the strong existing barriers to exit (specialization of
actives, fixed costs, government and social restrictions…) that make more difficult the exit of
the company from the sector, thus force it to be more competitive to stay in the marketplace.
Apart from the barriers to exit, rivalry is also enhanced by high strategic interests. The
geographical position is an important element of this factor, because when two companies are
in the same geographical area greater competition and knowledge of the competitors actions
can be generated, what occurs in the case of the port of Castellon and its direct competitors.
In addition, the strong rivalry that has traditionally characterized the sector has been
intensified considering the current economic situation, some companies opting for the tariff
reduction in order to achieve greater market share and/or appropriate customers from the
competition.
According to Porter's analysis and the high rivalry level in the sector, it is concluded that the
port sector's profitability degree is medium / low. It should be stressed that, although initially
this was an extremely attractive sector because of its high barriers to entry (public port
domain and large investment in infrastructure), the virtual absence of substitute means of
transport and the control of the supply chain achieved, they have been taken measures which
have undermined the attractiveness and competitiveness of Indian ports in recent years.
 P a g e | 19

3.2 SWOT Analysis

Originated by Albert S. Humphrey in the 1960s, the tool is as useful now as it was then. You
can use it in two ways – as a simple icebreaker helping people get together to "kick off"
External Analysis and the SWOT Matrix is sometimes called an IE Matrix
strategy formulation, or in a more sophisticated way as a serious strategy tool.
Strengths and weaknesses are often internal to your organization, while opportunities and
threats generally relate to external factors. For this reason, SWOT is sometimes called
Internal-

Figure 3.3: Swot Analysis

 P a g e | 20

3.2.1 Strength
 The location of the port is main strength for it. It is nearest to the
Middle East and Europe
 The road connectivity and rail connectivity are good.
 It covers most of the north India as hinterland – Punjab, Haryana,
Delhi, Rajasthan and Gujarat these hinterland has very good export
oriented manufacturing base.

3.2.2 Weakness
 Lake of modern machineries.
 Low draught level.
 Lack of IT Technology.
 Storage area management.
 Procedural delays.

3.2.3 Opportunities
 Development of new jetties/berth
 Growth potential
 Revenue generation modern facilities.

3.2.4 Threats
 Increasing competition from Gujarat maritime board ports (Non Major
ports)
 The upcoming private ports
 P a g e | 21

CHAPTER –IV
CASE STUDY ANALYSIS
Case 1: Kandla aim to reach 185 mtpa capacity by 2020 with development of SIPC
Kandla
4.1.1 Abstract
Kandla Port in Gujarat, which handled a cargo of about 106 million tonnes in 2015-16, is
now looking to unlock value from its huge land bank in Kutch.
The new Major Ports Authority Bill, 2016, aimed at reorienting the governance model in
central ports to a landlord port model in line with the successful global practice is also
expected to bring transparency in operations of major ports.
In an interview, Ravi Parmar, chairman of Kandla Port Trust (KPT) talks about expansion,
focus on container cargo as a growth area, new projects, including a port facility at Veeri in
Kutch, and a plan to set up a renewable energy park.
Parmar also discussed Kandla Port Trust’s plans to achieve an overall cargo handling
capacity of 185 MTPA (million tonnes per annum) by 2020 across three port facilities in
Kandla, Vadinar and Tuna Tekra.
This is a big challenge for the Kandla port to achieve this capacity because of Mundra ,which
have good technology comparison to Kandla situated only 60kms from Kandla .Having these
challenges how Kandla achieve 185 mtpa capacity, and what are the advantages have with
Kandla port answered by Ravi Parmar (Chairman kandla Port) .

4.1.2 The basic Key Issues Are:

4.1.2.1 Kandla Port Trust has retained its position of being the country’s top major
port, having crossed the 100 million tonnes mark of cargo handled for the second year
in a row now (2016-17). What are your plans to keep the momentum going?
From our present cargo handling capacity of about 115 MTPA, we aim to reach 185 MTPA
by 2020.
We are in the process of investing about Rs1,000 crore of which Rs415 crore would include
setting up two berths for dry cargo, two oil jetties and a rail over-bridge. Also a part of this
amount, which we might raise through the ECB (external commercial borrowing) route, will
be for development of Smart Industrial Port City at Kandla(SIPC KANDLA).
At our port, we have an additional 7.5 million tonnes capacity that is ready for
implementation. One of our major thrust areas is development of Kandla as a major liquid
hub. About 60% of the cargo handled at Kandla is liquid while remaining is dry cargo. Essar
 P a g e | 22

Oil’s refinery at Vadinar is likely to undergo expansion by adding 25 MTPA to their refining
capacity. All this cargo will be handled by Kandla Port Trust.
Various factors contribute to our growth story and this is reflected in our financial
performance too. Kandla Port Trust’s net profit has gone up from Rs322 crore in 2015-16 to
Rs.651 crore in 2016-17, a rise of 54%.

4.1.2.2 How do you see the overall port sector in the country shaping up? From a
services port model how do you see Kandla Port Trust moving towards a landlord port
model?
In Europe, 35-40% of the cargo traffic movement is through canals, seas and rivers whereas
in India, it is less than 7% and is mostly by sea. So, this gives a huge opportunity for port
developers in India. While Sagarmala project is a larger concept with an aim to develop all-
round coastal development, it will also decongest highways and make transportation more
cost effective with better cargo handling.
If you look at some of the most successful ports across the world like the Port of Antwerp,
mainly run by municipal authorities or government bodies for centuries, only recently they
began following the ‘landlord ports’ model after they felt that unless they do not lease out
their land to industries that uses port for import or export, they will not be able to increase
their cargo traffic.
Kandla Port Trust is implementing the ‘landlord ports’ model in a big way wherein industries
are encouraged by the port authorities to set up by their operations in the vicinity of the port.
Kandla Port Trust has the largest land bank among all major ports in the country. The overall
land bank of Kandla Port Trust would be close to 220,000 acres but a lot of this is in inter-
tidal zone. We would have close to 25,000 acres that can be utilized for warehousing, salt
farm, tank farms, etc.
Land was earlier leased out by Kandla Port Trust at nominal rates perhaps due to lack of
demand back then. However, the new land policy guidelines for major ports wherein land can
only be leased by way of auction has unlocked a lot of value for major ports like ours. For
example, we auctioned 12,000 acres of salt pans last year that gave us huge premium. Earlier,
we used to get Rs.144 per acre per year while this new market-determined rate gave
Rs.39,000 per acre per year.
The Smart Industrial Port City project which is one of our major upcoming projects and
includes a smart industrial zone at Kandla port will give a major boost in this direction. The
 P a g e | 23

project envisages to develop a smart industrial zone at Kandla and a well-planned modern
township at Gandhidham.

4.1.2.3 You have been the chairman of two major ports of the country – earlier at
Mumbai Port and presently at Kandla Port Trust. How are the two different from each
other?
The challenges are different for both. Mumbai port is 150 years old and its draft is a major
constraint. Also, evacuation is a major issue in case of Mumbai as the city has outgrown the
port. The development of Mumbai also gets restricted in the port area. Also, land is very
scarce and this results in high storage charges. In comparison, Kandla is a modern port and it
can easily go for mechanization. Kandla Port Trust has vast availability of land and with the
national highway right up to the gate and a rail track right up to the berth, Kandla port can
afford to have reasonable storage charges. Also, in the last three years, a lot of new projects
have been taken up by Kandla Port Trust.

4.1.2.4 At Kandla port, two berths for container terminals were commissioned a few
months ago. Where does container cargo fit in your overall growth plans?
Having terminated a contract with a private company after they failed to meet minimum
operation targets, we auctioned Berth No 11 and 12 to another private entity last year. The
trend of commodities being containerised is growing rapidly in the port industry and we
wanted to get a strong foothold in container handling industry. The two terminals became
operational on January 28 this year and so far we have handled 10,000 TEUs (twenty-foot
equivalent units). These two berths will be a major achievement in attracting additional cargo
as we hope to handle more than 1 lakh TEUs this year. Container cargo is the new growth
area for us.

4.1.2.5 Non-major ports like Adani group’s Mundra port have been giving some stiff
competition to major ports. Your comments on this…
Competition is always good. In the past, a lot of traffic from Kandla had migrated to some
privately owned non-major ports as their storage capacity was higher and their rentals were
lower as compared to ours. We auctioned land for setting up liquid storage tank farms,
resolved congestion issues and lowered our rentals, as a result of which we reversed the trend
of cargo being diverted to other ports. We have one of the lowest cargo handling charges
 P a g e | 24

which is about Rs62 per tonne. Also, we handle a wide range of cargoes including sand, coal,
timber, petroleum & oil products, agri-commodities, etc.

4.1.2.6 What is the progress on Chabahar Port project in Iran that you are jointly doing
with Jawaharlal Nehru Port Trust (JNPT)? Are you looking at any other overseas
projects?
India Ports Global Pvt. Ltd (IPGPL), the JV between JNPT and Kandla Port Trust, has
recently invited bids for selection from private companies for setting up a container terminal.
IPGPL will develop two container terminals and three multi-purpose cargo berths. India and
Iran had signed a memorandum of understanding (MoU) in May, 2015 regarding the
development of the Chabahar Port. The port is of great strategic importance for development
of maritime transit traffic to Afghanistan and Central Asia.
IPGPL is looking at a couple of more overseas port projects including one in South Africa.

4.1.2.7 Are you looking at any new port projects in India?

We are looking at developing a port facility at Veera which is close to Kandla. The area has a
natural draft of 19-20 metres and we are looking to develop this for setting up an SPM (single
point mooring).

4.1.2.8 What is the status of a 5,000-hectare special economic zone that Kandla Port
Trust had proposed to set up in Kutch some years ago?
We have been told by the state pollution control authority that about 2500 hectares out of the
total 5,000 hectares land identified for our port based multi-product SEZ falls in the coastal
regulatory zone area. So, we are now proposing to set up a renewable energy park in this area
and are studying its feasibility. We are actively pursuing the SEZ project and awaiting some
necessary approvals.

Case: 2 Development of Kandla under Sagarmala Project .A detailed Study?

3.2.1 Background
The Sagarmala initiative is one of the most important strategic imperatives to realize India’s
economic aspirations. The overall objective of the project is to evolve a model of port-led
development, whereby Indian ports become a major contributor to the country’s GDP.
As shown in Figure 3.2, the Sagarmala project envisages transforming existing ports into
modern world-class ports, and developing new top notch ports based on the requirement. It
 P a g e | 25

also aspires to efficiently integrate ports with industrial clusters, the hinterland and the
evacuation systems, through road, rail, inland and coastal waterways. This would enable ports
to drive economic activity in coastal areas. Further, Sagarmala aims to develop coastal and
inland shipping as a major mode of transport for the carriage of goods along the coastal and
riverine economic centres.
As an outcome, it would offer efficient and seamless evacuation of cargo for both the EXIM
and domestic sectors, thereby reducing logistics costs with ports becoming a larger economy.
Sagarmala aims to optimize the logistics route for port increase focus on port led
development for country
Figure 3.2 Aim of Sagarmala Development

In order to meet the objectives, Indian Port Association (IPA) appointed the consortium of
McKinsey and AECOM as Consultant to prepare the National Perspective Plan as part of the
Sagarmala Programme.

3.2.2 Scope of Work

The team of McKinsey and AECOM distilled learnings from the experience in port-led
development, the major engagement challenge to develop a set of governing principles for
our approach is shown in Figure 3.3 below.
 P a g e | 26

Figure 3.3 Governing Principles of our Approach

As indicated above, the origin-destination of key cargo (accounting for greater than 85% of
the total traffic) in Indian ports have been mapped to develop traffic scenarios for a period of
next 20 years. The forces and developments that will drive change in the cargo flows are also
identified. This would lead to the identification of regions along the coastline where the
potential for the expansion of existing port exists. The various activities involved in the port
led developments are charted in Figure 3.4.

Figure 3.4 Port Led Developments

 P a g e | 27

As part of the assignment, we are also expected to coordinate with the team working on
“Benchmarking Operational Improvement Roadmap for Major Ports in India” study (which is
being carried out simultaneously along with this assignment) and identify current and future
logistic constraints (at the Major Ports) for the top 85% cargo categories based on analysis of
current port capacity, productivity levels in comparison to international benchmark and
evacuation bottlenecks in the logistics chain. This understanding would be an input in
defining the 2035 Master Plan for each port.
Accordingly, this Master Plan report has been prepared taking into consideration the inputs
provided on the future traffic and the benchmarking and operational improvements suggested
for this port.

3.2.3 Present Submission

The present submission is the Final report on Master Plan for Kandla Port as part of
SAGARMALA assignment. This report is organised in the following sections:
Section 1 : Introduction
Section 2 : The Port and Site Conditions
Section 3 : Details of Existing Facilities
Section 4 : Performance, Options for debottlenecking & Capacity Assessment
Section 5 : Details of Ongoing Developments
Section 6 : Traffic Projections
Section 7 : Capacity Augmentation Proposals
Section 8 : Port External Connectivity and Infrastructure
Section 9 : Scope for Future Capacity Expansion
Section 10 : Shelf of New Projects and Phasing

3.2.2 The Port and Site Conditions

3.2.2.1 Kandla Port
Port of Kandla governed by Kandla Port Trust is located at the west coast of India, is one of
the 12 major ports of India and the only Major Port in the state of Gujarat. It was declared as
a Major Port on April 8, 1955.
Kandla Port is a natural harbour situated in Kandla Creek and is 90 km from the mouth of
Gulf of Kutch. Geographically, the port is spread in three locations viz., Kandla, Vadinar and
Tuna Tekra. These site locations are as shown in the Figure 3.5.
 P a g e | 28

Figure 3.5 Geographic Location of Kandla Port.

3.2.2.2 Rail and Road Connectivity

3.2.2.2.1 Background
Access to the port will play a key role in linking the port expansion to the rest of its supply
chain. Ensuring that surface transport links to the port expansion are adequate will be crucial
in ensuring the efficiency of the overall supply chain. Kandla Port needs to have an efficient
“whole of chain” system to maximise the port’s attractiveness to shippers and thus its
competitiveness.
Whilst the mode split of cargo to and from the port will be determined to a large extent by the
types of products hauled, and hence the detailed road and rail requirements, there are a
number of general issues which need to be considered concerning road and rail access.
It is clear that road and rail infrastructure in the port is already in place which could be
utilised to serve the port expansion, although some additional facility will be required to
customise the connections to the various terminal areas and to upgrade the internal transport
infrastructure generally to provide the level of service required.
With regard to the external connectivity, the Port is well connected by the network of rail and
road. It caters to the trade requirements and provides gateway port for export and import of
traffic of one of the most highly productive granary and industrial belt of the country
stretching across the hinterland states of northern Indian states of Jammu & Kashmir,
Delhi,Punjab, Himachal Pradesh, Haryana, Rajasthan, Gujarat and parts of Madhya Pradesh,
Uttaranchal and Uttar Pradesh.
 P a g e | 29

3.2.2.2.2 Road Connectivity :

Kandla Port is connected with National Highways NH 8A connecting Ahmedabad and
Mundra/ Mandvi through Gandhidham. The four lane NH 8A extends right up to the port’s
main gate. The port is also connected through NH 141. The port also has fully developed road
network, both in and around the Port area to facilitate faster movement of cargo. The road
network within the port area is as below:
x Inside Cargo jetty area 30 km x Outside Cargo Jetty area 31 km

3.2.2.2.3 Rail Connectivity :

Broad gauge (BG) tracks directly connect the Port at Kandla with the principal cities of
Mumbai, Ahmadabad, Surat, Baroda, etc., and also Delhi, Punjab and Haryana through the
route Ahmadabad – Ratlam – Kota – Mathura to Delhi. The second route is via Palanpur –
Ajmer to Delhi. The nearest railway station is Gandhidham railway station is 24.3 km.
The port has railway connectivity inside the cargo jetty area up to CJ 10 and is being
extended till CJ 16.
Figure 3.6 External Rail and Road Connectivity to Kandla
 P a g e | 30

3.2.3 Site Conditions

3.2.3.1Meteorology
The climate at Kandla is governed by the monsoons. In the months June-September, the
south-west monsoon occurs. The later period is often indicated as the post-monsoon period.

3.2.3.1.1 Winds
Non cyclonic maximum winds (30-40kmph) occur during May-August. Wind speeds are
relatively less during North East Monsoon. However, wind speeds up to 180 KMPH have
been observed during cyclonic storms.

3.2.3.1.2 Rainfall
Rainfall at Kandla is low. Annual average rainfall is about 322 mm per annum with the total
number of rainy days of 17 per year, about 90% of which is received during the south-west
monsoon season, i.e., between June and September with a maximum of 153 mm in July.
April and May are dry months with average rainfall below 0.6 mm per month.

3.2.3.1.3 Temperature
The mean daily maximum temperature is 34°C and with 40°C the highest occurring in May.
Mean daily minimum temperature is 20°C and with 12°C the lowest occurring in January.

3.2.3.1.4 Visibility
Throughout the year visibility is good as the region has zero fog days. However, during rains
and squalls, the visibility deteriorates.

3.2.3.1.5 Relative Humidity

Relative humidity is generally high and rises to about 80% during the monsoons in the month
of August.

3.2.4 Initiative Improve productivity in dry cargo berths

3.2.4.1 Initiative: Increase crane throughput by optimizing grab sizes to commodities.
3.2.4.1.1 Initiative Overview
Currently, KPT is operating 6 ELL cranes of 25MT, 4 ELL cranes of 16MT, and 2 ELL
cranes of 12MT between berths CJ1 to 12. Kandla already has the disadvantage of operating
these old and low capacity cranes, impacting the overall productivity. Increasing the volume
 P a g e | 31

per lift will help increase the crane productivity. Thus, defining the size of grab by crane
capacity and type of commodity is important to improve crane productivity.

3.2.4.1.2 Key Findings

Currently, there is no norm or metric defining what type and size of grab should be used for
what type of crane or commodity. Common grab is used for all ELL cranes. This
standardization is reducing the crane productivity. Thus, the following grab sizes were
identified for the 25MT ELL cranes, differing by material type and density:
Figure 3.7: Grab Chart

Recommendations
Identify optimal grab size on the basis of commodities handled, and use those for crane
operations.

Expected Impact
Utilization of optimal grab size will result in increase of volume per lift by ~50%, crane
productivity by ~25%, and increase in operating surplus by ~ Rs. 5 Cr.
 P a g e | 32

CHAPTER –V
FINDING, SUGGESTIONS AND CONCLUSION
5.1 Finding
 Since last 10 years Kandla port is No.1 port in cargo handling operations.
 The price charged (wharfage cost, cargo handling cost, storage cost,etc.) by Kandla
port is lowest compare to all other ports.
 Key customer is PANAMA.
 Due to demurrage charges shipping companies are not satisfied.
 Construction of new berth is at very low pace.
 The building of new berth is done by other private companies on tender basis.
 The documentation process at OTB should stopped.
 The draught level is low.
 The time taken for clearance and other procedures is high.
 The shipping companies are shifting their cargo vessels to other port as the time taken
for loading and unloading is very more compare to other ports.
 The maintenance cost for berth is very high.
 The highest profit generation of Kandla port is through Vadinar port because
maintenance cost is very low at Vadinar port.

5.2 Suggestions
To retain the no.1 spot in traffic handling and to improve their brand image following are the
suggestions :-
 Kandla port should upgrade the port with modern technologies to handle cargo at
quicker pace.
 Kandla port should appoint a capable new chairman who can have control over all the
wrong activities so that proper management takes place.
 Focus should be delivered on the handling of the liquid cargo by developing more no.
of liquid cargo berth instead of multipurpose cargo berth since saturation is observed
in multipurpose cargo handling business.
 The jetties should be built with high draught level.
 The cargo handling operations should be fast so that the demurrage charges would
decrease.
 P a g e | 33

 Corruption and ill legal activities should be fast so that the demurrages charges would
decrease.
 SOR (scale of rates) should be kept low.
 The environment at port should be trader friendly.
 Kandla port should build a proper container terminal because now a day most of cargo
export import takes place in container. Kandla port should introduce unloading of
cargo directly to conveyor belts to godowns.
 The HRD of Kandla Port should handle the strikes and other problems efficiently.
 Proper efforts should be made to improve the night navigation system.
 The documentation process at OTB should be stopped instead should take place near
to port only.
 Kandla port should be develop Tuna port as the draught level is high their and
container terminal should be built there.

5.3 Conclusion
The summer internship project has helped to gain practical knowledge, which can’t be gained
through books. The experience gave an opportunity to learn new things which provided a
peek into the corporate world.
Kandla Port continues to be India’s no.1 Port with 100.01MMT (106 MMT in 2015-16)
traffic handling. It has been at top for many consecutive years. Kandla Port contributes 16.5%
to India’s total Major Ports handlings. Port has 12 dry cargo berths with total length of
2.57KM in straight line and 6 Oil jetties for handling of POL and Chemical. The single buoy
mooring in Vadinar can handle Very Large Crude oil Vessels (VLCC) with a pumping
capacity of 5000 tonnes per hour.
Maximum output, excellent infrastructure, well connectivity, all-round services and cost
effectiveness are the major strength of Kandla Port. It is the gateway to the northwest India
and due to its unique locational advantage it accesses a vast hinterland of 1 million Sq. Kms,
stretching up to jammu and Kashmir by broad gauge railway system, national highway no.8A
and air connectivity.
From this report we can conclude that Kandla port is lacking behind in modern
mechanization, skilled employees, documentation and procedural work, but then also low
scale of rates and other services Kandla port is able to retain their No.1 spot in handling cargo
traffic since 10 years. To retain this No.1 spot Kandla port is focusing on new projects and
investing in Vadinar and Tuna port.
 P a g e | 34

BIBLIOGRAPHY

www.kandlaport.gov.in

http://www.gmbports.org/

http://shipping.nic.in/

http://www.ipa.nic.in/

www.ibef.org

Administration Report (2015-2016), Kandla Port Trust Gandhidham.