Landlord Port

The Background

There are more than 2,000 seaports active throughout the world to cater to the requirements of sea borne cargo to the volume of around 5.3 billion tonnes. With the growing move for privatisation of the seaports all over the world subsequent to reforms, private sector participation in operations and infrastructure activities of seaports has increased substantially over the last few years. This has resulted in a radical change in the organisational model of ports, converting from Service Port model to Landlord Port model, where port authority retains the port infra-structure and regulatory functions, whereas the port services are provided by private operators.

Ennore Port was originally conceived as a satellite port to the Chennai Port, primarily to handle thermal coal to meet the requirement of Tamil Nadu Electricity Board (TNEB). The scope was expanded taking into account subsequent developments such as the plan of Government of Tamil Nadu to set up

The concept

A review of the top 100 container ports of the world during 1997 showed that 88 out of 100 ports conform to the Landlord Port model. In this model

The port authority constitutes a landlord, which manages the basic port assets by letting land and infrastructure to port operators in an efficient manner. The Landlord Port in this model would be involved in planning, lease negotiation, safety, navigation and overall coordinating functions. Cargo services, marine service, ancillary services, berths etc are privatised on captive/BOT basis to the primary port users. Port operators and other undertakings which need to be located in the Port, lease the land, infrastructure and associated services and provide them to the secondary users - cargo owners, ship owners and cargo ship owners.

With a view to improve efficiency and cost-effectiveness, the role of Indian ports is changing from a Service port model to a Landlord port model.