Published on March 14, 2014

The recent reforms, which helped get rid of the tariff setting authority, have pulled the Indian port sector out of muddy waters. Two of the biggest international port operators are keen on investing in India.

In February, PSA International Pte Ltd, the global container port operating firm owned by Temasek Holdings Pte Ltd, won the bid to build and operate the Rs 7,900 crore fourth terminal at Jawaharlal Nehru Port Trust (JNPT), located near Mumbai. The project involves the biggest single FDI of about Rs 2,700 crore in an Indian port project.

The firm also managed to secure a 10-year contract to operate and maintain container loading facilities at Kolkata port, which can handle nearly 450,000 standard containers per year. PSA is likely to invest Rs 450 crore to install cranes and container handling equipment at the port.

PSA always believed that India has tremendous potential. They are looking forward to develop their existing port projects in India and will continue to look for more investment opportunities. This firm was the first one to invest when the India opened its ports to private investments in 1990s. It operates a 1.5 million standard container capacity per year terminal at Chennai port and a 450,000 standard container capacity a year terminal at VO Chidambaranar port.

The port contracts they won in February helped India attain the target for awarding port contracts for the year. PSA helped at a time when the Shipping Ministry was struggling to bring in private investments due to a sluggish market and an unfavourable government policy framework.
Port operators often face difficulty in getting clearances. Escalating costs and delaying projects are other issues that need to addressed immediately.

International Monetary Fund and the World Bank have made growth assessments while taking a long-term view on India and the viewpoint of both these organisations are positive. The optimistic outlook of the two international bodies has brought about more investors. Also, demand in India is very good, which is bringing in more foreign investments.

In FY14, the government managed to award 30 projects, which involve an investment of over Rs 21,000 crore. The reforms implemented by the government, including the plan to disband TAMP (Tariff Authority for Major Port) have helped improve the Indian port sector.


With the end of the reign of tariff setting authority, new projects will not be under TAMP and even old projects will be provided with the same benefits. The government also succeeded in laying down strict timelines for acquiring security and green clearances for projects and a new land policy.

By - Priyanka Menon (Author)