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Published on: Nov. 19, 2023, 3:59 p.m.
Unwavering voyage of Mundra Port
  • Mundra can push India to the centrestage as a global transhipment hub

By Lancelot Joseph. Executive Editor, Business India

In the bustling sphere of Indian maritime operations, a new pinnacle has been reached. October saw an extraordinary volume of cargo handled, totalling 16 million metric tonnes. The operational synchrony included 1,852 trains – 1,527 container trains alongside 325 general goods trains – and 377 vessels. Such a feat is indeed unprecedented in the nation’s history, and sets a new industry standard in maritime activity. Achieving this operational marvel stands a singular entity — the Mundra Port. With an unyielding commitment to operational excellence and the steadfast dedication of its adept team, Mundra Port, which recently completed its 25th-year milestone, continues to break barriers.

As a flagship venture of the Adani Group, Mundra has etched its place as a premier, state-of-the-art seaport on the global stage. Since its first ship, MT Alpha, docked on 7 October 1998, the port has surged forward as a crucial conduit for international commerce and a versatile transport interchange, spurring both trade and economic dynamism within the region and in India.

Indeed, the port’s impact resonates deeply through its fiscal contributions – exceeding Rs2.25 lakh crore to both state and national treasuries over a quarter of a century – and its generation of over 7.5 crore man-days of employment, underscoring its pivotal role in the nation’s march towards progress. Currently, about 13,000 people are required daily to run the port.

Harbour of dreams

So, it’s no surprise that the Mundra Port extends well beyond its impressive logistical statistics; it is a symbol of India’s developmental aspirations and economic resilience. This port has not just facilitated trade but has actively fostered prosperity, enriching lives and livelihoods across the nation.

On this journey of transformation, Gautam Adani, chairman Adani Group and the visionary behind this powerhouse, says: “Mundra, for me, is much more than just a port. It is the beachhead of a horizon of possibilities for the entire Adani Group. 25 years ago, when we started the journey, we dreamt of a beacon that would represent India’s march forward. The heartbeat of this commitment resonates not just in Mundra but throughout the nation and echoes in the confidence of every stakeholder who had the faith to sail on this journey with us. As we mark our silver jubilee, Mundra stands as a testament to the wonders that can unfurl when foresight, tenacity and a united community converge. Along with our employees and partners, we did not merely construct a port; we sculpted an emblem of global excellence, transforming an entire region and crafting new blueprints. Our confidence has never been higher and Mundra will continue to trailblaze, setting benchmarks on the global canvas.”

Expanding horizons

Over the years, the port has achieved several milestones. In 2014, it became the first port in the country to handle 100 MMT of cargo. Today, it handles over 155 MMT – another first for the country. This constitutes nearly 11 per cent of India’s total maritime cargo. Almost 33 per cent of India’s total container traffic passes through this port, which has the capacity to handle 260 MMT annually.

Mundra’s expansion potential and constant upgrade efforts have made it a critical asset for import and export (EXIM) cargo in India, which is poised to become a key player in global maritime trade. As the country’s largest commercial port, spread over 37,000 acres, Mundra boasts the largest coal import, fertiliser, and container terminals. Its deep draft and all-weather capabilities mean efficient cargo evacuation and minimum turnaround time. The port also offers multimodal transportation and is well connected to the national road and railway networks. This further boost cargo evacuation and transportation processes and helps streamline logistics.

  • Adani: setting global benchmarks

    Adani: setting global benchmarks

Reflecting on this journey of progress, K Mohandas, former Secretary to the Government of India in the Ministry of Shipping and former officer, Indian Administrative Services says: “The Adani group started it as a captive jetty in 1998, added an SPM in 2001 and the first container terminal in 2003, and continued to develop the cargo-handling capacities for various cargos using the best of technologies; it has now emerged as India’s top port in terms of cargo handling. The growth story of the port over the last quarter century represents several growth stories – the development of Indian infrastructure, private participation in infrastructure development, the Gujarat model of development, the emergence of the Adani group as a major player in multiple sectors, and the port-led development of a region.”

No doubt, when the port kicked off operations, there was little economic activity. Over the years, the Adani Group invested in building systems and operations. “The preference of the ports would normally be to invest in activities that generate cargo; investment in social infrastructure needs a different form of social commitment. The Adani Group did both – they developed India’s largest port-based multi-product industrial park and simultaneously contributed to the development of a whole region,” adds Mohandas.

Ports for progress

On the other hand, India requires the port infrastructure to fire on all cylinders if it has ambitions to become a five trillion-dollar economy and beyond. Ports serve as the backbone of its economic structure, playing a pivotal role in boosting trade, industrial expansion, energy procurement, tourism, and job creation. Integral to the nation’s prosperity, ports handle a staggering 95 per cent of trade by volume and 68 per cent by value, as highlighted by the ministry of ports, shipping, and waterways.

The post-Independence period saw a lull in port development, but the past 30 years have seen remarkable growth, fuelled by economic advancements and strategic government policies. Today, India boasts 12 major ports and over 210 smaller ones, with active participation from the private sector. Among them, the Mundra port and the Adani Group’s Vizhinjam seaport have developed quickly and play a major role.

“Privately owned Mundra Port has the critical advantage of a 15-metre natural draught that allows for handling large vessels with up to 75,000 metric tonnes of cargo. Similarly, the Adani Group’s deep-water international seaport in Vizhinjam, Kerala was set up in a public-private partnership. The recent Global Maritime India Summit 2023 in Mumbai inaugurated by Prime Minister Narendra Modi signals the importance of this infrastructure,” says Dhanendra Kumar, a former chairperson of the Competition Commission of India and executive director at the World Bank.

While the 2006 Special Economic Zones (SEZ) Act further invigorated the sector, leading to the creation of port-connected SEZs, government reforms especially through the Sagarmala scheme, aim to strengthen this sector, with a vision of completing 802 projects by 2035. The scheme has already seen the completion of projects worth Rs1.12 lakh crore, with many more underway. “Revenue from ports, like the Mundra port’s Rs80,000 crore contribution to customs, underscores the significant economic impact of this sector,” adds Kumar.

  • Mohandas: growth stories galore

    Mohandas: growth stories galore

Global hub

Mundra is now poised to be elevated as a central hub for the India-Middle East-Europe Economic Corridor (IMEC). The memorandum of understanding for IMEC was signed by key global entities, including Saudi Arabia, the European Union, India, the UAE, France, Germany, Italy, and the US, at the G20 Summit in New Delhi in September 2023.

Under IMEC, two corridors are proposed: one connecting India to the Arabian Gulf and the other linking the Arabian Gulf to Europe. The goal is to bolster road, rail, and maritime connectivity, ensuring seamless movement of goods and services between key regions including India, the UAE, Saudi Arabia, Jordan, Israel, and Europe.

The Mundra port on the west coast of India has a strategic advantage of being close to the international trade route. Added to that is its proximity to the Middle East – a key trading ally for India. “The Adani group’s acquisitions of the container terminal in Colombo and the port in Haifa (Israel) will add to their role in global maritime transportation. The proposed India–Middle East–Europe Economic Corridor connecting India’s west coast to Europe through UAE, Saudi Arabia, Israel, and Greece is an ambitious collaborative project for multi-modal transportation with economic benefits for all the participants; this would run parallel to the Chinese BRI. The Adani Group can play a key role in this, as the owners of Mundra Port as well as Haifa Port,” says Mohandas.

What’s more, shipping lines are deploying larger vessels for transhipment because of reduced costs. On the other hand, seaports are struggling with cargo evacuation infrastructure, handling capacity and operational inefficiencies. Mundra has not only effectively addressed some of these issues but is also continuously enhancing its container handling capacities.

Earlier, a large part of India’s container volume would be transhipped through foreign ports. But the trend is shifting with the development of strategic facilities like Mundra that can push India to the centre stage as a global transhipment hub. With seaports on both the east and the west coasts of India, Adani Ports and Special Economic Zone Limited (APSEZ), the country’s largest private port operator has also invested in building strategic partnerships with major shipping liners. These associations have facilitated capacity enhancement in ports like Mundra, and they have immense potential in building and maintaining long-term cargo tie-ups.

In FY22, Mundra Port managed around 1.72 MTEUs of transhipment-based container volume, marking a 28 per cent YoY increase. According to data, transhipment-based volumes constituted 23 per cent of the total container volume processed by APSEZ in FY22, an increase from 21 per cent in FY21 and 14 per cent in FY20.

From managing one port in 1998, APSEZ now oversees 14 ports/terminals across the country. The company’s share in the total cargo handled at India’s ports has risen from 10 per cent in FY13 to 24 per cent in FY23. APSEZ has recorded a growth in handling cargo over the years and in FY23, it managed 339 MMT.

  • Kumar: significant economic impact

    Kumar: significant economic impact

Future ready

The trajectory is seeing a shift towards containerised volumes’ market share reaching 42 per cent in FY23. In FY20 it was 36 per cent and in FY18 it was 33 per cent. Containerisation provides a mechanism to consolidate goods into standardised units, or Twenty feet equivalent units (TEUs). Its advantages are manifold, and it has been one of the most impactful innovations in maritime trade. Containerisation helps streamline processes and reduces dependency on manual labour; it enhances cargo security and facilitates timely and cost-effective transportation.

“Containerisation has emerged as a key trend in cargo handling, with APSEZ standing as a key beneficiary, due to its flagship port in Mundra,” states a recent research report from Motilal Oswal. The investment in Mundra Port over the years has been both robust and forward-thinking. Last year it infused Rs2,300 crore and has enhanced infrastructure and expanded terminals. “APSEZ has been a key beneficiary of this trend, with Mundra leading the way through the setup of incremental container handling capacities. Additionally, the combinations of an expanded and well-diversified portfolio, strategic port locations, and efficient operations have led to continued market share gains. APSEZ has evolved from operating just two ports (Mundra and Dahej) in FY11 to a portfolio of 14 ports/terminals across India. The company now accounts for 24 per cent of the total cargo handled at India’s ports (FY23) vs just 10 per cent in FY13,” adds the Motilal Oswal report.

With Rs4 lakh crore earmarked for the next half-decade, Mundra is set to be at the centre of witnessing a transformative leap with new projects that include port expansion, new berths for copper ore, a state-of-the-art copper smelter plant, ventures in green hydrogen, and renewable energy developments. The port’s reach, which spans the industrious north and the entrepreneurial west of India, is of strategic importance.

It is within this context of growth and innovation that Mohandas projects an optimistic future. “With a massive hinterland covering Delhi, Punjab, Haryana, UP, and Rajasthan, and a near hinterland in the industrially developed and further developing Gujarat, Mundra Port will continue to grow,” he asserts. As Mundra strides into the future, it is distinctly shaping the epoch-making era of India’s maritime legacy.

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