Port cargo shows growth after seven months of decline
PORTS & SHIPPING

Port cargo shows growth after seven months of decline

Cargo at Indian ports has turned positive for the first time after seven consecutive months in October and November 2020, recording a 3% and 1% year-on-year (y-o-y) growth respectively, financial services and credit rating agency ICRA reports.

The port sector had been adversely impacted during the period March-September 2020 due to the Covid-19 outbreak and the subsequent lockdown introduced by India and other major economies. Although the sector was classified under essential services and remained operational after the initial period of lockdown, the adverse impact on the domestic economic activity and slowdown in global trade resulted in steep contraction in cargo volumes at the Indian ports. 

During the first eight months in the current financial year, cargo reported a 12% decline. However, that is a significant improvement over the 22% decline recorded in Q1 FY2021. 

The pace of decline has moderated sequentially every month for key cargo segments, indicating continuing signs of a recovery. 

ICRA Ratings says the pace of recovery in the port sector will be contingent on the pace of recovery of the domestic industrial activity and the global economy, and that they expect volume contraction of about 10% in the FY2021. A revised projection of the earlier expectation of a 12-15% decline puts the decline rate at 10-12%, largely driven by the quicker than earlier expected pickup in industrial output and consequently higher exim volumes.

The credit profile of port sector companies would continue to remain under pressure on account of the lower than anticipated cargo volumes during FY2021, especially those that have just commenced operations or concluded debt funded capacity expansions or have a concentrated cargo profile, ICRA believes. Nonetheless, well diversified players (cargo-wise) and SPVs promoted by stronger sponsors should have higher financial flexibility to weather this downturn and their debt servicing is unlikely to be materially impacted.

Source: Press release

Cargo at Indian ports has turned positive for the first time after seven consecutive months in October and November 2020, recording a 3% and 1% year-on-year (y-o-y) growth respectively, financial services and credit rating agency ICRA reports.The port sector had been adversely impacted during the period March-September 2020 due to the Covid-19 outbreak and the subsequent lockdown introduced by India and other major economies. Although the sector was classified under essential services and remained operational after the initial period of lockdown, the adverse impact on the domestic economic activity and slowdown in global trade resulted in steep contraction in cargo volumes at the Indian ports. During the first eight months in the current financial year, cargo reported a 12% decline. However, that is a significant improvement over the 22% decline recorded in Q1 FY2021. The pace of decline has moderated sequentially every month for key cargo segments, indicating continuing signs of a recovery. ICRA Ratings says the pace of recovery in the port sector will be contingent on the pace of recovery of the domestic industrial activity and the global economy, and that they expect volume contraction of about 10% in the FY2021. A revised projection of the earlier expectation of a 12-15% decline puts the decline rate at 10-12%, largely driven by the quicker than earlier expected pickup in industrial output and consequently higher exim volumes.The credit profile of port sector companies would continue to remain under pressure on account of the lower than anticipated cargo volumes during FY2021, especially those that have just commenced operations or concluded debt funded capacity expansions or have a concentrated cargo profile, ICRA believes. Nonetheless, well diversified players (cargo-wise) and SPVs promoted by stronger sponsors should have higher financial flexibility to weather this downturn and their debt servicing is unlikely to be materially impacted.Source: Press release

Next Story
Infrastructure Transport

BMC Gets CRZ Nod For Rs 40 Million Gorai Bridge Rebuild

The Brihanmumbai Municipal Corporation (BMC) has secured Coastal Regulation Zone (CRZ) clearance for the reconstruction of the Poisar River bridge in Gorai, located in Mumbai’s western suburbs. However, the proposed demolition of the existing 100-metre bridge has sparked opposition from local residents, who claim it serves as the only direct access route between the Lower and Upper Koliwada areas. The three-decade-old bridge, situated within the CRZ buffer zone, was recently declared structurally unsafe following a civic audit. The BMC has sanctioned its reconstruction at an estimated cost ..

Next Story
Infrastructure Transport

NHAI Completes Rs 15.9 Billion Four-Lane Stretch On ECR

The National Highways Authority of India (NHAI) has completed the four-laning of the 38 km Puducherry–Poondiyankuppam stretch, ending near Cuddalore, in a development that will cut travel time by up to two hours, according to a report by The New Indian Express. The upgraded section, built at a cost of Rs 15.9 billion under the Bharatmala Pariyojana Phase I, marks a major milestone in the ongoing East Coast Road (ECR) widening programme. The project promises a smoother, faster drive for motorists travelling towards Cuddalore, Chidambaram, Sirkazhi, and Nagapattinam. With this completion, 22..

Next Story
Infrastructure Transport

Encroachments Delay Rs 1 Billion Ghatkopar Bridge Project

The construction of a new cable-stayed rail overbridge at Ghatkopar and the widening of the Andheri–Ghatkopar Link Road (AGLR) have been delayed due to the presence of nearly 250 encroached structures on both sides of the road. In response, Municipal Commissioner Bhushan Gagrani has directed officials to carry out a structural audit of the existing bridge over the railway line and enforce temporary restrictions on heavy vehicles to ensure public safety. The bridge, which starts at the Golibar Road junction near LBS Marg and extends up to the Eastern Express Highway (EEH), serves as a critic..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?