25-04-2016

Maersk keen on taking ports on lease in India: Julian Michael Bevis

JulianMichaelBevis

Shipping company AP Moller-Maersk is keen on taking Indian ports on lease, but is waiting for a clear picture from the government of India. In an interview, Julian Michael Bevis, senior director, group relations, South Asia, Maersk Line India Pvt. Ltd, said he is very positive about the shipping and port sector, especially with the present government. Policies like Sagarmala will create a lot of opportunities, Bevis said. Edited excerpts:

Is it the right time to invest in India?

Certainly it is the right time, as evident from the fact that the economy is growing at 7.5% and this size is enormous. It is supported by statements from the government that makes India an extremely interesting place. But it is not that it is without any challenges. The minister has been very explicit about it and he is being honest, which is extremely positive. There are connectivity and access issues along with legislative issues. So, one has to tread with some care. But in all of that, I think we will find some opportunities with the right commercial and regulatory circumstances and that will be the projects we will be very interested in.

What are your investment plans?

Our general view of the marketplace is very positive. Maersk group through its terminal and infrastructure business has already invested $800 million in less than 10 years in India and we first got into the port at Nhava Sheva in 2004-05. There are policies like Sagarmala in place, which means there will be a number of opportunities. However, exactly when and where those opportunities will emerge is quite difficult to tell. But we are a group that is very keen to invest and to grow. We invested $1 billion in acquiring a group of 11 ports based out of Spain. I mean they don’t have a footprint in India but that is illustrative of our appetite for growth. We have just announced an $800 million investment in Tangier. So, the point I’m making is that we are prepared to invest when we see the right opportunity in this part of the world. We are very keen to do something like Tangier over here.

Are you looking at acquiring any existing port and are some of them on your radar?

If such an opportunity is presented, then we will certainly consider that and there are lots of things on radar. You can count the number of ports on the list in Sagarmala. If you go through the website of the ministry of shipping there are about 200 projects. Depending on the nature of how they are presented, we will have a look, but exactly how is difficult to pin down because we really don’t know about them. At this time, for commercial reasons we cannot say the ones that we are keen on.

You have referred to various things that Indian government needs to do. Could you elaborate on it?

In logistics space, I think there are two or three major policy directions that the government needs to consider. This needs to be a collaborative effort between the government and the industry. No problem on this earth can be solved by just one person. You need all stakeholders to be on board. And that is why I keep on saying that initiatives like Maritime Summit are good one but it is not sufficient that it happens for once and should happen on a regular basis.

Julian Michael BevisBevis started his career in London in 1971 as a management trainee with Overseas Containers Ltd. He was regional director, Middle East, South Asia and African Region for P&O Nedlloyd, when it was acquired by Maersk Line in 2005. Following the acquisition, Bevis was appointed as area line and operations manager for South Asia for Maersk Line. In October 2013, he moved to the position of senior director, group relations, South Asia and is responsible for all government, regulatory and major stakeholder matters. He is a British national and a post-graduate from Oxford University.

Second point is around market forces. Instead of always reaching for regulator to deal with the policy issues which is the stance that has been taken by the government in the past and whenever there is policy issue, government would read the rule book and add another 10 pages. My view is as far as possible, let the market do it for you because generally speaking, market forces are the best regulator. That doesn’t mean that you can leave everything to the market. In ports, you have got a market; so let that market regulate rather than having this tariff authority for major ports telling people what to charge. There, we need to get rid of and this is a time for transition and we should do it as quickly as possible.

There are people nervous about that but market in the end will find people out and that’s healthy. And I think if you can have effective market, then infrastructure has to be built of a scale because logistics is about scale; now that is why there are big ships, big airplanes and heavy trains, big trucks and things. It’s not big boy toys but it is because these larger assets will deliver economies with scale if they deliver in the right way. And those economies which scale, deliver benefits which ultimately help the market they are serving.

Do you think with the present government, ease of doing business has really improved?

Business environment has definitely improved. You have never seen something like this (Maritime India Summit) happening 20 years ago. You had never seen the nature of exchange with the politicians and bureaucrats and business happening in the way as it’s happening now. Chief ministers are sitting down with the group of potential investors and saying, tell me what your issues are. Has that ever happened 20 years ago? You know the answer. It has never happened. So, that’s the answer that things are moving in the right direction.

But these are competitive times. There are many countries competing with India for getting more and more investments. Latin America, Africa, Asia and its not necessary that someone is better or worse but the point is where the investor gets the best returns. So, in that sense, India is going in the right direction.

How do you see shipping ministry’s initiative to have a platform like Maritime India Summit?

It’s good in two respects. Firstly, it sends strong signals by statement of various ministers and the prime minister making about the government’s intent. Now, what is very clear is that by comparison of what we were 10 years ago when shipping and logistics were not the focus of the policy makers, now they are. Effective logistics are a very important component for making manufacturing competitive, making almost all aspects of trade competitive.

And therefore, if initiatives like Make in India and other (such initiatives) are really going to work, then it has to be supported by a competitive, energetic set of policy mechanism in terms of logistics.

It is an opportunity for the government to explain things and to answer questions in front of big audiences for long periods of time which is very constructive and equally, the other way, the government being talking formally and informally to the industry and asking them questions and put them under pressure too. I think it’s very constructive.

Source: Live Mint

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