Business Plan for Chennai Port Trust Final Report Above and beyond Creating a bright future Final Report Business Plan for Chennai Port Trust Table of Content 1 EXECUTIVE SUMMARY ........................................................................................................7 2 MAJOR RESULTS AND CONCLUSIONS...........................................................................24 2.1 PORT DESCRIPTION ................................................................................................................24 2.1.1 INTRODUCTION .....................................................................................................................24 2.1.2 PORT INFRASTRUCTURE ........................................................................................................24 2.1.3 PORT ’S NAVIGATIONAL AND HARBOR DETAILS ....................................................................27 2.1.4 PORT TRANSPORTATION SYSTEM .........................................................................................28 2.1.5 INTERNAL PORT TRAFFIC ......................................................................................................29 2.1.6 ASSESSMENT OF HANDLING OPERATIONS ............................................................................30 2.1.7 STORAGE CAPACITY .............................................................................................................31 2.1.8 MARINE SERVICES ................................................................................................................32 2.1.9 CARGO HANDLING EQUIPMENTS ..........................................................................................32 2.2 COMPETITIVE POSITION ........................................................................................................33 2.2.1 THREAT OF NEW ENTRANTS .................................................................................................35 2.2.2 RIVALRY AMONG EXISTING PLAYERS ..................................................................................36 2.2.3 BARGAINING POWER OF SUPPLIERS ......................................................................................39 2.2.4 BARGAINING POWER OF PORT USERS ...................................................................................40 2.2.5 THREAT OF SUBSTITUTES .....................................................................................................41 2.3 HINTERLAND CONNECTIVITY ................................................................................................42 2.3.1 HINTERLAND MAPPING FOR CHENNAI ..................................................................................42 2.3.2 ROAD CONNECTIVITY ...........................................................................................................43 2.3.3 RAIL CONNECTIVITY .............................................................................................................47 2.4 CARGO FORECAST ..................................................................................................................50 2.4.1 COMMODITY ANALYSIS ........................................................................................................50 2.4.2 MARKET DRIVERS .................................................................................................................54 2.4.3 DEMAND FORECASTING ........................................................................................................55 2.4.4 TARGETED TRAFFIC VOLUMES .............................................................................................59 2.5 CAPACITY AND BOTTLENECK ANALYSIS ..............................................................................68 2.5.1 CAPACITY ANALYSIS ............................................................................................................68 2.6 LAND USE PLAN ......................................................................................................................83 2.7 ORGANIZATIONAL ISSUES ......................................................................................................88 2.8 SWOT FOR CHENNAI PORT AS A WHOLE .............................................................................93 3 BUSINESS PLAN ELEMENTS..............................................................................................96 3.1 DEVELOPING THE VISION AND MISSION ...............................................................................99 3.2 STRATEGIES ..........................................................................................................................101 3.2.1 INTRODUCTION ...................................................................................................................101 3.2.2 FUTURE INDUSTRY SCENARIOS ..........................................................................................102 3.2.3 PROCESS OF FORMULATION OF SCENARIOS ........................................................................103 3.2.4 PROCESS OF FORMULATION OF STRATEGIES ......................................................................106 3.2.5 FUNCTIONAL STRATEGIES ..................................................................................................110 3.3 SELECT PROJECTS INCLUDING MOTIVATION .....................................................................124 3.4 PLAN OF ACTION TO IMPLEMENT STRATEGY ....................................................................136 Page 2 of 185 Final Report Business Plan for Chennai Port Trust 3.4.1 TRANSLATION OF STRATEGY INTO PROJECTS .....................................................................136 3.4.2 CORPORATE PLANNING CAPABILITY ..................................................................................140 4 DETAILED ACTION PLAN.................................................................................................148 5 FINANCIAL ASPECTS.........................................................................................................151 5.1 OVERVIEW OF INVESTMENTS ..............................................................................................151 5.2 APPROACH FOR FINANCIAL PROJECTIONS ........................................................................152 5.3 PROJECTED FINANCIAL STATEMENTS ................................................................................159 Page 3 of 185 Final Report Business Plan for Chennai Port Trust List of Abbreviations ACS Analysis, Consolidation and Strategy AD Ambedkar Dock BD Bharathi Dock BOT Build, Operate & Transfer C&F Cost & Freight CAO Chief Accounts Officer CCP Chief of Corporate Planning CCTL Chennai Container Terminal Pvt. Ltd. CFS Container Freight Station CHAs Custom House Agents ChPT Chennai Port Trust CONCOR Container Corporation of India Ltd. CKD Cars Knocked Down CPCL Chennai Petroleum Corporation Ltd. CPC Corporate Planning Cell CRM Client Relation Management EC Elevated Corridor EMP Environment Management Plan EMRIP Ennore Manali Road Improvement Project ESR Environmental Scanning & Research EXIM Export Import EPZ Export Processing Zone EQ East Quay FEL Front End Loader GDP Gross Domestic Product GRT Gross Registered Tonnes HRD Human Resource Development HMIL Hyundai Motor India LTd ICD Inland Container Depot IMM Implementation Monitoring & MIS IT Information Technology IRR Inner Ring Road JD Jawahar Dock KPCL Krishnapatnam Port Company Ltd Kms Kilometers LOI Letter of Intent MEH Manali Express Highway MIS Management Information System MoU Memorandum of Understanding MoRR Manali Oil Refinery Road m Meter Mtpa Million Tons per annum Mteu Million teu Page 4 of 185 Final Report Business Plan for Chennai Port Trust MTS Multi Trailer System MT Million Tonnes MP Madhya Pradesh NCR National Capital Region NH National Highway NHAI National Highway Authority of India O-D Origin - Destination POL Petroleum, Oil & Lubricants PPP Public Private Partnership PSA Port of Singapore Authority ROB Rail Over Bridge RMG Rail-Mounted Gantry SAIL Steel Authority of India Limited SBM Single Buoy Mooring SEZ Special Economic Zone SPM Single Point Mooring SQ South Quay SPV Special Purpose Vehicle SWOT Strength - Weakness - Opportunities - Threats UP Uttar Pradesh TAA Technical & Administrative Assistants TPP Tiruvottiyur -Ponneri -Pancheti teus Twenty Foot Equivalent Units TISCO Tata Iron and Steel Company Limited VRS Voluntary Retirement Scheme WQ West Quay Page 5 of 185 Final Report Business Plan for Chennai Port Trust List of Tables TABLE NO- 2.2-1: COMPARISON OF FACILITIES AT ALL MAJOR PORTS ....................................................37 TABLE NO- 2.4-1: TONNAGE HANDLED DURING LAST 7 YEARS (IN MTPA )............................................50 TABLE NO- 2.4-2: MARKET DRIVERS ..........................................................................................................54 TABLE NO- 2.4-3: CONTAINER TRAFFIC GROWTH (O RIGINAL )................................................................58 TABLE NO- 2.4-4: CONTAINER TRAFFIC GROWTH (F INE -TUNED ) ...........................................................58 TABLE NO- 2.4-5: COMMODITY -WISE PROJECTED TRAFFIC GROWTH RATES .........................................59 TABLE NO- 2.4-6: OTHER COMMODITIES PROJECTED TRAFFIC GROWTH RATES ...................................59 TABLE NO- 2.4-7: CALCULATIONS FOR TARGETED TRAFFIC FOR COAL ...................................................60 TABLE NO- 2.4-8: YEAR -WISE TARGETED TRAFFIC FOR COAL .................................................................60