Will the delay in acquiring land in Maharashtra for Dedicated Freight Corridor project affect JNPT port in Mumbai?

On June 20, a double-stack container train, comprising 178 boxes in two layers, departed from Gujarat’s Mundra port on a trial run. The rake carried real goods: glycerine, softwood pulp, aluminium scrap, base paper, electric parts, compressors, knitting machines and polyester fabric, all imported from countries such as France, Germany, Mexico, Italy and the United Arab Emirates. Their final destination was either Delhi-NCR (National Capital Region) or Punjab.
A day later, an elated Railway Minister Piyush Goyal tweeted, “The first trial run for double stack container train from Mundra, Gujarat to NCR has been completed successfully,” adding how his ministry’s move would lead to efficient movement of freight between ports of Gujarat and the rest of India.

Meanwhile, Indian Railways (IR) is, at the time of writing this report, waiting for a date to be conveyed by Prime Minister Narendra Modi to flag off a container train in the 646 km stretch from Rewari in Haryana to New Palanpur in Gujarat, comprising 42% of the western Dedicated Freight Corridor (DFC) project. With feeder routes to three Gujarat ports — the government-run Deendayal (erstwhile Kandla) and the privately held Mundra and Pipavav— being overhauled and upgraded for carrying double-stack containers, what is waiting in the wings is a faster, uninterrupted and highly costeffective journey of export-import items between north India and coastal Gujarat. It sounds like a perfect script — till this stage.

But there is a problem, and that has arisen out of the partial rollout of the DFC project due to a delay in acquiring land in Maharashtra. The Mumbai-based, government-owned Jawaharlal Nehru Port Trust (JNPT) port, also called Nhava Sheva, fears that it will be left in the lurch, with a big diversion of freight traffic to ports in Gujarat. A railway official in the know says JNPT has taken up the matter with the ministries of shipping and the railways.

JNPT Chairman Sanjay Sethi says, in an email interview to ET, that once the DFC is partially rolled out, the Mundra port of Gujarat will gain some initial volume. However, he insists that a market-driven rail tariff will finally decide the volume between Mundra and JNPT. He says JNPT’s losses in the short run could be 10-20% of the present ICD (inland container depots) volume, which means cargo originating from dry ports.

The greater the delay in acquiring land in Maharashtra the more the losses the JNPT could incur. Currently, the flagship DFC project faces major land acquisition bottlenecks in 16 locations in Maharashtra’s Raigad, Thane and Palghar districts, according to documents previewed by ET, making it clear that the rest of the project is unlikely to be wrapped up by June 2022, the new deadline set by DFCCIL (DFC Corporation of India Ltd), the railway entity anchoring the project. The deadline for completing the project has been extended multiple times in the past.

A delay in acquiring land in Maharashtra will likely yield a surprise bonus to three Gujarat ports at the cost of JNPT. What’s more, if cargo vessels get used to the new arrangement, will they ever return to Mumbai even after the DFC corridor gets extended to JNPT?

“That Gujarat ports will have a temporary advantage is not by any design. It just happened,” says Anurag Sachan, who was managing director of DFCCIL till last year. “First, land acquisition has been more challenging in Maharashtra. Relocation of families living in the city of Mumbai is not yet over. Second, when Japanese agency JICA gave loan in tranches (since 2010), the Railways decided to start the work from the Delhi end,” he says, adding that in normal circumstances the entire western DFC (1,506 km from Dadri in UP to JNPT) would have completed at the same time. The Rs 95,238 crore DFC project has two components, western and eastern. The eastern corridor, also under construction, runs from Ludhiana (Punjab) to Dankuni (West Bengal).

The completion of a long section of DFC on the western side means that goods from North India could now be ferried at a cheaper rate to Gujarat ports, first via DFC’s trunk route till New Palanpur station before getting those diverted on feeder routes — 318 km for Deendayal, 380 km for Mundra and 469 km for Pipavav.

What if the same goods needed to be transported to JNPT?

In an email reply, DFCCIL MD Ravindra Kumar Jain explains, “We have planned certain inland container depots at New Swarupganj (Rajasthan) and New Varnama (Gujarat) which, in turn, will provide double- to single stacking facilities for JNPT-bound traffic. These containers will thus have a part journey at a reduced cost before being carried to JNPT on usual Indian Railways’ routes.”

In other words, faster and low-priced, double-stack journeys (rate could be 30% less) will be available between North India and ports of Gujarat whereas for JNPT it will be a break journey, partly in elite double stack and partly in ordinary railway lines.




LAND IN TROUBLE
Former Railway Board chairman and CEO Vinod Kumar Yadav says JNPT port will continue to be relevant though it will be affected temporarily. “JNPT’s traffic could be hit a bit for some time, but once the entire western DFC is ready, likely to be in June 2022, there will be a level-playing field once more. The Maharashtra government should ensure the remaining part of the land is acquired fast,” he says.

One more year would not have made a big difference, but people associated with the project say it is impossible to complete the rest of the line by mid-2022. They have a reason. Although the non-acquired land impacts just 4.9 km or 0.3% of the length of the western DFC corridor, it is not one stretch. The disputed areas are scattered across several districts, involving too many stakeholders. In a linear project such as highways or railways, even a small dispute over just 100 metres of land could end up stalling the entire project.

A DFCCIL spokesman tells ET that till recently there were disputes in 5.7 km, but since more people have agreed to vacate their homes, allowing local authorities to demolish those buildings, the disputed area has come down to 4.9 km. Though many of these disputes are old, frequent political tussles between BJP-ruled Centre and the state’s Shiv Sena-NCP-Congress government has further slowed down the pace of land acquisition. In some areas, protests against the project are still going on.

Meanwhile, DFCCIL has paid Rs 90 crore as compensation to owners of some 800 structures. As many as 450 buildings have been vacated and demolished in Maharashtra while another 105 are in the process of getting razed, the spokesperson adds.

WHERE WILL CARGO GO?
If the land issue does not get resolved soon, JNPT’s container business is bound to suffer more. It can lose container traffic from north India because of comparative cost and time factors. And Gujarat ports could gain.

In Covid-hit 2020-21, for example, JNPT’s total container cargo business shrunk by 7% to 4.67 million TEUs (twenty-foot equivalent units) from 5 million TEUs a year ago. During the same period, Adani-owned Mundra port witnessed a robust 18% growth in container volumes, registering 5.65 million TEUs in FY 2021, as against 4.81 million TEUs in FY 2020, piping JNPT for the first time to become India’s biggest container port by volume. The government-run Deendayal Port, still better known by its earlier name Kandla, handled only 0.5 million TEUs of containers in 2020-21, which is just 10% of JNPT’s container business. ET’s questionnaire to Adani Ports & SEZ Ltd did not elicit any response.


According to DFC officials, a new roll-on-roll off (Ro-Ro) rail service, to be unveiled soon, will be useful for JNPT and Gujarat ports. The service, according to the blueprint, will be available for the 646 km stretch from Rewari to New Palanpur; here containerised trucks will be loaded on flat rail wagons, prompting a faster and cheaper journey. At New Palanpur, these trucks will move out of the train and embark on a road journey to their respective ports.


“Whether the traffic is meant for JNPT or Gujarat ports won’t matter. Both will be able to piggyback on our rail flat wagons and complete the journey in just 10-12 hours, much less than usual road journeys. This environment-friendly and economically sustainable traffic will equally help the JNPT,” says DFCCIL’s Jain.

Ro-Ro could, for now, assuage some of the fears of JNPT.