Indian Port Sector

By Hans Ole Madsen – CEO, South Asia for A.P. Moller-Maersk

Port Pipavav

1
About A.P. Moller-Maersk
> Established in Svendborg, Denmark in 1904

> More than 110,000 employees in over 125 countries

> Global group turnover of USD 40 Billion

2
 Main Business Activities

Container Shipping related activities

> Maersk Line and Safmarine are market

leaders in global container services

> Network of more than 550 container vessels

and 1.4 million TEU

> APM Terminals operates more than 45

terminals

> Multimodal Supply Chain Management

services through Maersk Logistics

3
 Main Business Activities

Other Shipping related activities

> Transport of crude oil, refined products

and gas by Maersk Tankers

> Maersk Supply provides supply vessels

for anchor-handling, cable laying etc

> Maersk Contractors is involved in

mobile production units and drilling
rigs

> Over 260 vessels and rigs operated

4
Main Business Activities

Energy

> Production and exploration of oil

and gas

> Production Activities in Denmark,

United Kingdom, Qatar, Algeria and
Kazakhstan

> Exploration activities in the North

Sea (Denmark, United Kingdom,
Norway and Germany), Algeria,
Morocco, Angola, Oman, Brazil,
Surinam, Colombia and
Turkmenistan

5
Main Business Activities

Retail and other industry

> Supermarkets and hypermarkets in

Europe and UK

> Brands include the Føtex stores, the

Netto stores and the Bilka hypermarkets

> Shipyards in Denmark, Germany and the

Baltic countries

> Industrial production of plastic products

> Star Air engaged in contract parcel flying

in Europe

> 50% ownership of Martinair Holland

engaged in air freights and charter
service for passenger

6
 Our Presence in India
> Maersk Line operating in India since 1952

> The leading container shipping line in India

> Nationwide presence through 33 offices

> Employs over 5,500 people in India

> Established the 1st Private CFS in Nhava Sheva in

1994

> Pioneered the back-office (BPO) concept in the

maritime industry

> Established the 1st Maritime Training Academy by a

foreign shipping line in India

> Among the 1st participants in the privatisation of rail

freight in India

7
 APM Terminals in India
> The 3rd Container Terminal at Nhava
Sheva harbour within JNPT
> Converted existing bulk terminal on
BOT for 30 years
> Joint Venture with CONCOR
> Handling capacity to be 1.4 mio TEU
> Total quay length 712 metres
> Draft limited to channel draft of 12.5
metres
> Located in Gujarat on the west coast of
India to handle containers, bulk and
liquid cargo
> Container volumes handled to exceed
250,000 in 2006
> Projected Container terminal capacity
of 1.3 mio TEU
> Bulk cargo in 2006 apx 2.5 mio tons
> Total quay length of 725 metres
8
Current Scenario
> Growth projections indicate continued demand for capacity

> Encouraging response from both local & international companies for Port
development projects in India

> Major international container port operators have a presence in India and are eyeing
new projects

Demand Projection

14000
T e u s i n '0 0 0

12000
10000
8000
6000
4000
2000
0
2006 2007 2008 2009 2010 2011 2012
Year

9
Regulatory Environment

> Model Concession Agreement

> Major v/s Minor Ports

> Tariff Regulation

> Major Port Trusts Act

10
Financing

> Need for long term financing/debt options

> Current interest rates high thus increasing the overall cost and risk

> Viability gap funding scope to be broadened

11
Public Private Partnership in Ports

> Private investment attracted towards port projects with reasonable returns
and payback period

> Support infrastructure to be developed by the Government to ensure success

of the PPP model
> Government to undertake infrastructural development where payback is
commercially unviable but essential for overall development such as capital
channel dredging, breakwater, rail/road linkages etc

> PPP to be used as a tool to speed up infrastructure development and not as a

replacement of Government spending

12
Productivity and Efficiency
> Berth productivity has improved at some Indian ports from 20 moves per
hour in the 90’s to 70-80 moves per hour

> The benchmark is now higher

> Emma Maersk, the worlds largest container vessel, had berth productivity of
540 moves per hour at Yantian

13