Public Private Partnership: Development game changer in Shipping industry

The Public-Private Partnership (PPP) concept was first implemented in India’s main ports,  in July 1997. The Nhava-Sheva International Container Terminal, a private participant, and the Jawaharlal Nehru Port in Mumbai signed the first agreement. With the launch of the port privatisation strategy in 1997, the port industry drew new investments, including those from abroad and accounts for 90% of new investments in berth and infrastructural development. PPP projects in the port industry have consequently become a  crucial source for improving Indian port’s competitiveness and viability in fortifying India’s position in global trade today. the Brahmaputra.

Why the need for PPP in the port and shipping sector?

Expansion and modernization of port infrastructure are necessary to drive economic development.  The  major role of the PPP model in the port sector can be defined in relation to eight policy issues : activities, investment, contract duration, exclusivity, performance requirements, labour, tariffs and concession fees. Increasing private sector involvement, and transshipment against gateway ports are all associated with higher efficiency in the port sector. As we comprehend the characteristics of the public sector, which is represented by discrepancies and infeasibility that does not respond to the market as soon as possible, the private sector is  much more market-oriented structure to cope, promptly, with the market surrounded by environmental changes. Although private investment is ubiquitous and growing in popularity, the government nonetheless maintains central supervision over all private participation.

PPP promises of improved project organisation and layout therefore, increasing the country’s competitiveness in terms of its supporting infrastructure base and promoting its business and industry related to the development of infrastructure. Private sectors have an enhanced and innovative sense of technological selection based on life-cycle costs and an increased likelihood of completing projects on schedule within the budget. Considering the risk factor, Introducing a public good or service where a private entity assumes a considerable amount of risk and management responsibilities and where compensation is based on their performance.


On the contrary, Complex competitive difficulties may arise if ports are operated privately. The private developers would frequently wish to safeguard the port’s profitability through commitments from the government not to build rival port facilities within a specific geographic area. However, the government would have to watch out for the private operator abusing its monopoly position by denying its rivals in the upstream or downstream access to the port

In one of the popular port models, The “Landlord” port, The public sector is in charge of port development, serves as a regulatory agency, and owns land and essential infrastructure associated with ports. Typically, private operating enterprises or industries like tank ports, refineries, and chemical plants are leased the infrastructure. In terms of the private port’s operators, they have constructed and maintained their own superstructure, or terminals and buildings. Additionally, they are in charge of running the terminal operations and have purchased and installed their own equipment on the terminal premises.