New Growth Areas: Cruise tourism and ro-ro offer bright prospects

Cruise tourism and ro-ro offer bright prospects

With a 7,516 km long coastline, pristine island chains and abundant tourism sites, the Indian port sector offers several new areas of growth such as cruise tourism and roll-on, roll-off (ro-ro) ferries. Though the two segments are still at a nascent stage of development in the country, they are rapidly gaining popularity through various initiatives taken by the government.

Cruise tourism

The development of domestic cruise tourism is a relatively new phenomenon in the country, although it is a well-developed industry globally. The Indian peninsula extends over a

thousand miles into the Indian Ocean, and this provides a comparative advantage for the development of the cruise tourism sector.

Also, Indian ports are primary ports of call for foreign cruise lines. Presently, while foreign cruise ships are allowed only in Mumbai, Chennai and Kochi, domestic operators offer river cruises on the Brahmaputra and Ganga, which are a part of National Waterways 1 and 2, and sea cruises to the Lakshadweep Islands and the Andaman & Nicobar Islands, from the ports of Mumbai, Kochi, Chennai and Kolkata.

The government has taken several initiatives towards making India a cruise destination. Six major ports located in Mumbai, Goa, Cochin, New Mangalore, Tuticorin and Chennai are being developed as world-class cruise terminals. Of these, four are already operational. Further, a new cruise terminal is being developed at Kochi. The Kerala government has also drawn up a Rs 3 billion Malabar cruise tourism plan, to link the rivers and backwaters of north Kerala. This plan is a part of the development of National Waterway 3 being undertaken, as the stretch is a major tourist destination.

The Ministry of Shipping has also requested the Goods and Services Tax [GST] Council to continue to keep cruise tourism out of the GST ambit. In addition, e-visa facilities have been extended to five major ports – Mumbai, Mormugao, New Mangalore, Cochin and Chennai. A uniform tariff rate of $0.35 per gross registered tonnage (GRT) at all major ports has been fixed to attract cruise vessels. Further, the facility for foreign flag passenger vessels to call at Indian ports without obtaining a licence from the Directorate General of Shipping which was initially allowed for a maximum period of 10 years, has now been extended to 15 years. Major ports provide 25 per cent rebate in vessel-related charges for coastal cruise movement, in addition to the existing rebate of 40 per cent for coastal vessels. Walk-in or preferential berthing is given to cruise vehicles at their home ports, without any extra charge. The government has also constituted a number of port-level committees to address manpower, coordination and logistics issues for the optimal handling of cruise vehicles. The Ministry of Tourism also extends financial assistance to ports for tourism infrastructure, under its Scheme for Assistance to Central Agencies.

Ro-ro projects

Ro-ro ferry service is another emerging growth area for the port sector. In October 2017, Phase I of the ro-ro ferry service between Ghogha and Dahej was inaugurated in Gujarat. Upon completion, the ferry service will be extended to locations across the Gulf of Khambhat and the Gulf of Kutch. To boost the state’s infrastructure, the Gujarat Martitime Board  has planned to take up several other ro-ro ferry projects in the future. These include the Mumbai-Porbandar, Mumbai-Ghogha, Mumbai-Dahej, Mumbai-Hazira, Mumbai-Pipavav, Hazira-Pipavav, Pipavav-Porbandar, Porbandar-Okha and Okha-Mundra links.

At present, Kamarajar is one of the major ro-ro traffic handling ports in the country. The terminal commenced commercial operations in September 2010. The capacity of its general cargo berth is 300,000 cars while that of the backup area adjacent to the berth and the car parking yard is 2,500 and 14,000 cars respectively. On an average, around 200,000 units of automobiles are handled per annum at the Kamarajar port.

In September 2016, Kamarajar port commenced automobile export and import between Cochin and Kandla ports. Since its inception, Kamarajar port has handled around 1,300,000 units of automobiles in 783 ro-ro vessels. In order to facilitate coastal ro-ro shipping, Kamarajar Port Limited has offered several concessions on wharfage and vessel-related charges. Further, it has awarded the second ro-ro terminal with a capacity of 300,000 cars and is in the process of developing an additional storage space spread across 10,000 square metres.

Future outlook

With the concept of a blue economy becoming an important part of global discourse, cruise liner operators are looking for islands as their destinations, which makes India, with over 1,300 islands and islets, a potential cruise hub. Further, under the Sagarmala programme, existing companies and entrepreneurs can set up cruise tourism-related businesses. However, India faces major infrastructural challenges with regard to the development of cruise tourism and ro-ro projects. Also, there is a need to ensure better utilisation of the existing provisions and institutions to fully tap the potential of the Indian port sector. w

Based on presentations by Vasudha Chawla, Research Associate, National Maritime Foundation, and V. Krishnasamy, General Manager, Operations, Kamarajar Port Limited, at a recent India Infrastructure conference