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A Case of Kattupalli Port Under Ppp Model in India

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A Case of Kattupalli Port Under Ppp Model in India International Journal of Civil Engineering and Technology (IJCIET) Volume 8, Issue 4, April 2017, pp. 1831–1839 Article ID: IJCIET_08_04_208 Available online at http://iaeme.com/Home/issue/IJCIET?Volume=8&Issue=4 ISSN Print: 0976-6308 and ISSN Online: 0976-6316 © IAEME Publication Scopus Indexed DIFFERENTIATION STRATEGY FOR AN EMERGING PORT - A CASE OF KATTUPALLI PORT UNDER PPP MODEL IN INDIA Dr. M. Bina Celine Dorathy Associate Professor, AMET Business School, AMET University, 135 ECR, Chennai, Tamilnadu, India ABSTRACT The Kattupalli port in Chennai, a greenfield port was established as a joint venture between Tamilnadu Industrial Development Corporation (TIDCO) and Larsen and &Toubro (L&T) under the Public Private Partnership (PPP) model. This port was set up primarily to handle the increased volume of sea trade along the East Coast line of Tamilnadu and to be a modern gateway in the region. The two major ports, Chennai and Ennore located in the same region were choked with traffic and Kattupalli was expected to give some relief. The port was strategically designed to offer more sophisticated services in order to divert the traffic from the two adjacent ports. The port became operational in January 2013. At this juncture, this paper makes an attempt to evaluate the performance of this port since its establishment to assess if the unique features of this port have helped to attract customers and ease traffic in the region. Key words: Port Performance, Operational Indicators, Financial Indicators, Differentiation Strategy Cite this Article: Dr. M. Bina Celine Dorathy, Differentiation Strategy For An Emerging Port - A Case of Kattupalli Port Under PPP Model In India . International Journal of Civil Engineering and Technology, 8(4), 2017, pp. 1831-1839 http://iaeme.com/Home/issue/IJCIET?Volume=8&Issue=4 1. INTRODUCTION Seaports facilitate trade between nations. A port has interface with other forms of transport and in doing so provides connectivity. Ports form a vital link in the overall trading chain. Port efficiency is an important parameter that determines a nation’s participation in international trade. The facilities provided by a port are expensive and hence under-utilization of the services provided would result in capital loss and higher cost for running the port. Optimum utilization of the available resources and efficient management of operations are vital for a port [1]. Measuring Port performance not only helps to understand its efficiency, it also helps to assess the effectiveness of the existing port promotion strategies and to devise suitable strategies for future. The Kattupalli port was promoted adopting the differentiation strategy. Differentiation involves making the products or services different from and more attractive than those of the http://iaeme.com/Home/journal/IJCIET 1831 [email protected] Dr. M. Bina Celine Dorathy competitors. To make the Differentiation strategy a success, an organization must have the following features [2] 1. Good research, development and innovation. 2. The ability to deliver high-quality products or services. 3. Effective sales and marketing, so that the market understands the benefits offered by the differentiated offerings. This article evaluates the data and information collected on Kattupalli port to assess how far the port fulfills the above three criteria. This paper makes an attempt to gauge the effectiveness of differentiation strategy for an emerging port like Kattupalli. Unique features of Kattupalli Port The Kattupalli port in Chennai, a greenfield port was established as a joint venture between Tamilnadu Industrial Development Corporation (TIDCO) and Larsen and &Toubro (L&T) under the Public Private Partnership (PPP) model. This port was set up primarily to handle the increased volume of sea trade along the East Coast line of Tamilnadu and to be a modern gateway in the region. Kattupalli Port was set up as a modern port with state of the art facilities. It has two container terminals and a shipyard adjacent to it. The port became operational in January 2013[3].Recently the port has been taken over by Adani Port Special Economic Zone (APSEZ) and renamed as Adani Kattupalli Port Private Ltd (AKPPL). The port is under compulsion to build its potential to offer niche services since it is in close range to two major ports. Therefore it is equipped to offer a whole new dimension of service, speed and sophistication [4]. The unmatched advantages of the port include • Modern equipment with global best-in-class technology providing effective service. • Proximity to Container Freight Stations (CFS) ensuring faster truck turnaround. Kattupalli International Container Terminal (KICT) is equipped with latest IT solutions to optimize its operational needs and to meet the demands of the customers. It has acquired competent and experienced people to provide high quality service to its customers. KICT functions round the clock and has the potential to handle upto 1.2 million TEUs [5]. KICT has implemented container terminal management system, capable of handling and automating all the varied and complex activities of the container terminal and container freight station (CFS) that leverages on state-of-the-art information technology architecture. With all of these in place, KICT assures its customers of unparalleled, exceptional service anytime of the year. ICAM (Integrated Computer Aided Maintenance) is used for maintenance planning, scheduling and work execution. This system is also used for procurement, supplier performance and warranty tracking with inventory link to other critical systems, i.e. finance/accounting, Content Management System (CMS) and yard management. Kattupalli port has the following facilities for incoming ship operations • Break water • Navigational channel • Maneuvering and berthing • Turning basin • Navigational aid • Power and water supply • Road connectivity http://iaeme.com/Home/journal/IJCIET 1832 [email protected] Differentiation Strategy For An Emerging Port - A Case of Kattupalli Port Under PPP Model In India • Tugs • Storage area for containers • Maintenance and repair platform • Firefighting appliances Kattupalli Port offers best-in-class facilities for Roll On Roll Off (RORO) to shipping lines and Original Equipment Manufacturers (OEMs) in terms of the infrastructure catering to their needs, viz: • Exclusive yard fully paved and well illuminated to the extent of 15 acres which will be expanded in the near future to ultimately accommodate over 10,000 cars. • Proximity of parking yard to berth resulting in faster turnaround and enhanced efficiency in yard and stevedoring operations. • Buffer storage possibility in berths – approx. 500 cars • Competitive tariff to benefit OEMs and shipping lines • Hassle-free, user-friendly gate-house operations speedup entry and exit • Dedicated washing facility with potable or piped water supply • Possibility of Pre-delivery inspection (PDI) activities Salient features of KICT in a nutshell * 2 berths with a combined length of 710 m * Capacity to handle 1.2 million TEUs per annum * 6 Post Panamax Quay Cranes * 15Rubber Tyred Gantry (RTG) * 360 Reefer Plug Points * Congestion-free and 24/7 access roads from / to port * Close proximity to Container Freight Station (CFS) and empty yards enabling faster turnaround times * Connected to all CFSs in Chennai for exports and imports * Connected to all major Internal Container Depot ( ICD) and Special Economic Zone (SEZ) * Connected to CONCOR(Container Corporation of India) for rail movements Adjacent to the terminal is a mega shipyard. The ship yard offers sophisticated Infrastructure facilities for ship construction and ship repair services. It undertakes construction of Commercial and Defense ships and hull, machinery and system piping repairs. The key features of this ship yard are • State-of-the-art technology and processes in design and operations • Construction of complex vessels with experienced specialists • Excellence in quality and on-time deliver The above information on Kattupalli port shows that the port has been developed after good research to deliberately draw customers from the overloaded Chennai and Ennore ports. The port has the capability to offer sophisticated and speedy services to customers which means it can soon emerge as the Modern Gateway of Tamilnadu. The port has fairly met the first two criteria of the differentiation strategy. http://iaeme.com/Home/journal/IJCIET 1833 [email protected] Dr. M. Bina Celine Dorathy 2. PERFORMANCE EVALUATION OF KATTUPALLI INTERNATIONAL CONTAINER TERMINAL (KICT) The available information on the performance of this port has been evaluated using operational and financial indicators and presented below. It has also been benchmarked against industry standards whereever possible. 2.1. Operational Indicators The Primary measures of operational performance are the ship turn-round time and the tonnage handled per ship day in port. Operational performance is also measured in terms of how well the assets of the port such as the berths and cranes are utilised. The following operational indicators have been calculated to measure the performance of Kattupalli port. 2.1.1. Yard Productivity (TEU/hectare of yard) Yard productivity is arrived by dividing the number of TEU’s handled pa by the total area of the terminal. The industry benchmark is generally taken as 20,000 TEU/ hectare/ year. For larger terminals an increase of up to 50% is considered. Table 1 Yard productivity for KICT Year TEUs handled Yard Productivity 2013-14 6,000 300 [6000/20] 2014-15 29,000 1450[29000/20] Sources: Port Statistics from JOC.com and https://www.zaubacorp.com The terminal area available at Kattupalli port is about 20 hectares [6]. Between 2013-14 and 2014-15 it has handled 6,000 and 29,000 TEUs respectively [7]. It can be seen from the above table that KICT’s yard productivity has increased from 300TEUs per hectare in 2013-14 to 1450 TEU’s per hectare in 2014-15. Though this is much below the industry standards of 20,000 TEU/ hectare/ year, Kattupalli being a new port is showing healthy signs of growth since its yard productivity has increased by almost 5 times between 2013-14 and 2014-15.
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