Favourable Climate: Enabling policy environment facilitates growth

Enabling policy environment facilitates growth

Gujarat’s major and non-major ports account for around 41 per cent of the total traffic at Indian ports. The state’s favourable location and supportive policy and regulatory framework have helped it attract significant private participation in sectors such as ports, shipbuilding and ship-breaking. At present, the state has several projects on the anvil, ranging from developing new terminals, improving hinterland connectivity and setting up coastal economic zones (CEZs) and smart port cities, etc.

Indian Infrastructure provides an overview of state’s port sector…

  • There are 49 ports (one major and 48 non-major) along Gujarat’s 1,600 km long coastline. The state also has the highest number of operational commercial cargo ports in the country.
  • Gujarat was the first Indian state to establish a maritime board (in 1982) and subsequently, in December 1995, formulate a comprehensive port policy for integrated and balanced port-led development. This policy has played an integral role in bringing in private sector participation. Further, after receiving state government approval in May 2016, the Gujarat Maritime Board (GMB) has now decided to revise the two-decade-old policy. Under the policy, new locations for greenfield ports will be identified and the concession period for these ports will be increased. The policy will also encourage the deployment of advanced technologies for mechanised cargo handling, integrated port management systems and integrated security management systems.
  • As of March 31, 2016, Gujarat’s total port capacity was 597.06 million tonnes (mt), of which major and non-major ports accounted for 131.06 mt (21.95 per cent) and 466 mt (78.05 per cent) respectively. Between 2011-12 and 2015-16, capacity at its major port increased at a compound annual growth rate (CAGR) of 9.4 per cent, from 91.22 mt to 131.06 mt while capacity at its non-major ports increased at a CAGR of 9.6 per cent, from 323 mt to 466 mt.
  • Gujarat handled 41 per cent of India’s total traffic in 2015-16 as compared to 37 per cent in 2011-12. Between 2011-12 and 2015-16, the overall traffic at Gujarat’s ports increased at a CAGR of 6.5 per cent, from 341.5 mt in 2011-12 to 439.88 mt in 2015-16.
  • Kandla port accounted for 22.8 per cent of the total traffic handled in the state. It
  • handled 100.05 mt of cargo in 2015-16, an increase of over 8 per cent over the 92.49 mt traffic volumes in 2014-15. With this, Kandla became the first major port in the country and the second overall (after Mundra) to handle over 100 mt of cargo in a year.
  • Non-major ports accounted for 77.2 per cent of the total traffic handled in Gujarat during 2015-16. Traffic increased at a CAGR of 7.02 per cent from 259 mt in 2011-12 to 339.78 mt in 2015-16. Sikka port accounted for the maximum share at 37.67 per cent.
  • Of the total traffic at Gujarat’s non-major ports in 2015-16, imports and exports accounted for 70.3 per cent and 29.7 per cent respectively. The top three imported commodities were coal (38.5 per cent), crude oil (27.6 per cent) and containers (10 per cent), while the top three exported commodities were petroleum, oil and lubricants (44.6 per cent), containers (23.8 per cent) and bauxite (7.9 per cent).
  • The Gujarat government has also announced the Ship Recycling Policy, 2016. The policy has been framed by the state government and GMB keeping environmental concerns in mind. The policy aims to give an impetus to the ship recycling industry at Alang Sosiya.

  • The Alang Sosiya ship recycling yard, developed by GMB in 1982, is one of the largest ship recycling yards in the world operated on the beaching method. The yard has a capacity to recycle about 450 ships per year. There are 167 plots available for ship recycling, spread along a 10 km stretch on the coast of Alang. During 2015-16, 249 ships were beached at Alang, as against 415 in 2011-12. So far, more than 7,263 vessels with a light deadweight tonnage of over 56 million have been recycled at the yard. Meanwhile, the Ministry of Environment, Forest and Climate Change has also granted environmental clearance for the upgradation of the ship recycling yard.
  • The Gujarat maritime industry is all set to grow with the impetus provided by the government’s new programmes such as Sagarmala to develop waterways, ports and CEZs. A draft report on port-led industrial development of the coastal economic clusters has identified one major maritime cluster in Gujarat. Moreover, 14 CEZs have been proposed for development along the country’s coast under Sagarmala, of which three are planned to be developed in Gujarat.
  • Meanwhile, GMB is also planning to start roll-on, roll-off ferry services between Dahej and Gogha in the Gulf of Khambhat. Further, GMB subsidiary Gujarat Ports Infrastructure and Development Company Limited is planning to establish a world-class maritime university in the state to provide high quality maritime education. Moreover, the country’s first floating liquefied natural gas terminal is also planned for development at Jafrabad in Gujarat. The 10 mt capacity terminal will be developed at a cost of Rs 40 billion.
  • Gujarat offers significant opportunities for stakeholders in the maritime segment, with six multiproduct special economic zones proposed to be set up near the state’s ports. One of India’s first smart industrial port cities is also planned to be developed at Kandla.
  • With a strong pipeline of projects, the state aims to maintain its port sector lead in the country.