INTERVIEW – New Silk Route says Indian ports “most promising”
Asia-focused private-equity firm New Silk Route is looking to raise funds and believes India’s ports are an attractive investment, a top official said. India, which has 12 major ports, will build 50 new ones over the next five years as it looks to reduce congestion. “Not only ports but also in the ancillary services that go into making a port. It’s the most promising investment in India,” said Darius Pandole, who focuses on private equity opportunities in the Indian sub-continent for New Silk Route, which manages $1.4 billion. Ancillary services include freight transport to and from ports and warehousing. India’s major ports handle three-quarters of the country’s annual traffic of 723 million tonnes. The rest is handled at 200 smaller ports. Reliance Industries and Larsen & Toubro plan to invest in ports, while JSW Group, which runs JSW Steel, recently unveiled a new port on India’s western coast. “About 90 percent of trade in India goes through the sea. We need more ports, more containers, more investments… on the east coast, on the west coast,” Pandole, who joined U.S.-based New Silk Route at its inception in February 2007, told Reuters at an offshore oil and gas exploration and shipping conference. With its strategic location straddling major trade routes and a long coastline that boasts a port every 20 miles (32 km), India’s port sector was expected to be a major driver of trade and economic progress, but has not managed to deliver so far. When trade was at its peak in the past two or three years, ships at India’s largest container port, Jawaharlal Nehru Port Trust (JNPT), had to wait for up to 10 days to load and unload, compared with about a half a day in Singapore. Power generation and transmission and distribution are also attractive to New Silk Route, Pandole said. The firm’s investments in India include financial services company Dawnay Day AV, media and entertainment firm INX Media Pvt Ltd and telecom infrastructure provider Reliance Infratel. India’s power infrastructure remains woefully inadequate, with businesses large and small forced to self-generate power in order to ensure supply. Regulatory hurdles, difficulties with land acquisition and red tape have curbed development of infrastructure in the world’s second-most populous country, but Pandole said they are easing. “Government regulations will ease because they have to. There is no way out. We have to upgrade our roads, our ports, airports, railways… no choice,” he said.