Interview with Abhishek Chandra: Deputy Secretary, Ministry of Shipping

Deputy Secretary, Ministry of Shipping

Port-led Prosperity

The Sagarmala programme, launched by the Government of India on July 31, 2015, aims to promote port-led development (direct and indirect) and provide infrastructure to transport goods to and from ports in a quick, efficient and cost-effective manner. In a recent interview with Indian Infrastructure, Abhishek Chandra, deputy secretary, Ministry of Shipping (MoS), shares his views on the progress under the programme, issues, challenges and the way forward…

What has been the progress under the four components of Sagarmala?

Sagarmala is the flagship programme of the MoS. The programme aims to promote port-led development in the country by harnessing the 7,500 km long coastline, 20,000 km of potentially navigable waterways and the strategic location on key international maritime trade routes. The main vision of the Sagarmala programme is to reduce logistics costs for export-import (exim) and domestic trade with minimal infrastructure investment.

Under the programme, 542 projects, at an estimated investment of over Rs 8 trillion, have been identified for implementation over the next 20 years. Of these, 452 projects (estimated project cost Rs 3.02 trillion) are targeted to be taken up by 2019-20. Further, 289 projects worth Rs 2.17 trillion are already under various stages of implementation and development.

Progress under the four components

Port modernisation and new port development

A total of 241 projects, at an estimated cost of Rs 1.39 trillion, have been identified under this component. To cater to the growing traffic, a roadmap has been prepared for increasing capacity at Indian ports to more than 3,500 million tonnes per annum (mtpa) by 2025. As a part of the programme, master plans have been finalised for the 12 major ports. Based on these plans, 142 port capacity expansion projects have been identified for implementation over the next 20 years. To fill the demand-supply gap, six locations have been identified for new ports.

For improving operational efficiency, a study to benchmark the performance of major Indian ports to comparable international ports was undertaken and the recommendations of the study are being implemented. The benchmarking study identified a total of 116 initiatives for implementation during 2016-18 to improve the operational efficiency and profitability of the major ports. Of the 116 initiatives, 86 have already been implemented so far resulting in an additional capacity realisation of around 80 mtpa at the ports. Further, a total of 48 projects (Rs 23.77 billion) have been taken up for financial assistance under the coastal berth scheme. Of these, 26 projects worth Rs 12.07 billion have been sanctioned and financial assistance amounting to Rs 2.66 billion has been released. The remaining 22 projects are under various stages of development and approval.

Port connectivity enhancement

Under the port connectivity enhancement component, a total of 208 connectivity projects have been identified for implementation at an estimated cost of Rs 2.5 trillion. Of these, 41 last-mile rail connectivity projects (Rs 210.69 billion) are to be taken up by Indian Port Rail Corporation Limited, 34 rail connectivity projects (Rs 427.03 billion) by Indian Railways, and 97 road connectivity projects (Rs 1,688.53 billion) by various agencies such as the National Highways Authority of India, state public works departments, port authorities and others. Of the 97 road connectivity projects, 56 projects are proposed to be taken up in convergence with the Bharatmala Pariyojana.

With a view to boosting connectivity, Phase 1 of the roll-on, roll-off passenger (ro-pax) service between Ghogha and Dahej in Gujarat was inaugurated on October 22, 2017. The ro-pax service will ply across the Gulf of Khambhat between peninsular Saurashtra and south Gujarat. Allowing vehicles and passengers on board, the service is expected to save not only time but also fuel and will help decongest roads as more and more people avail of it. Due to the huge cost involved in terminal construction and dredging, the Gujarat Maritime Board was assigned the task of providing infrastructure and terminal facilities to make the ferry service viable.

The port connectivity component also includes the development of 16 multimodal logistics parks and six projects pertaining to inland waterways development (Rs 82.98 billion). Besides, three pipeline projects worth Rs 45 billion are also under various stages of implementation and development.

Port-linked industrialisation

Overall, 49 projects involving an investment of Rs 4.49 trillion have been indentified for implementation. With a view to developing port-proximate industrial capacities near the coast, 14 coastal economic zones (CEZs) have been identified and perspective plans for all the CEZs have been developed. Other initiatives under this component include the development of a marine shipbuilding park in Gujarat, a maritime cluster in Tamil Nadu, a port-linked special economic zone at the Jawaharlal Nehru Port Trust (JNPT), smart port industrial cities at Kandla and Paradip and industrial development at the V.O. Chidambaranar Port Trust and Kamarajar port.

Coastal community development

A total of 44 projects worth Rs 56.81 billion have been proposed for development under this component. An integrated approach is being adopted with a focus on skill building and training, technology upgradation, and the development of specific and time-bound action plans for improving physical and social infrastructure in collaboration with the coastal states. In this regard, the skill gap study for 21 coastal districts has been completed and the domain ministries and concerned state governments have been asked to implement the district action plans.

As a part of the fire safety training programme for workers at Alang Sosiya, 2,796 workers have been trained and additional training programmes are under way. Besides, a Centre of Excellence in Maritime and Shipbuilding is being set up at Visakhapatnam and Mumbai in coordination with the Indian Register of Shipping and Siemens, at a cost of Rs 7.66 billion. Other institutes that are being developed under the component include the National Technology Centre for Ports, Waterways and Coasts at the Indian Institute of Technology Madras, and a multiskill development centre associated with JNPT (in coordination with the Ministry of Skill Development and Entrepreneurship).

What is the status of greenfield port projects and the 14 coastal economic zones that have been announced?

The six greenfield ports are proposed to be developed at Vadhavan (Maharashtra), Enayam (Tamil Nadu), Tajpur (West Bengal), Paradip Outer Harbour (Odisha), Sirkazhi (Tamil Nadu) and Belekeri (Karnataka). The techno-economic feasibility report has been prepared for five locations and is under preparation for the new port at Tajpur.

In-principle cabinet approval for the development of a transshipment port at Enayam has been obtained. Meanwhile, the preparation of detailed project reports (DPRs) is in progress for the ports at Vadhavan, Enayam and Paradip Outer Harbour.

The concept of the proposed CEZs is now being perceived as coastal “employment” zones to promote exports and create jobs. A committee has been constituted under the ambit of NITI Aayog to look after the development of such employment zones. Further, the government is exploring the option of providing budgetary support to those states which offer 25 square km of land and are willing to sign a state support agreement for the development of these employment zones. A “challenge” methodology has been proposed to be followed while awarding the contracts for the employment zones.

Of the 14 CEZs identified under the port-linked industrialisation component, DPR preparation has been taken up on a pilot basis for one CEZ each in Andhra Pradesh and Gujarat.

What are the MoS’s targets and achievements in terms of project award and completion?

Sagarmala aims to reduce logistics costs for exim and domestic cargo by reducing the cost of transporting domestic cargo. It aims to achieve this by optimising the modal mix, lowering the logistics cost of bulk commodities by locating future industrial capacities near the coast, optimising the time/cost of exim container movement and improving export competitiveness by developing port-proximate discrete manufacturing clusters.

What are the funding sources being explored for the Rs 8 trillion investment requirement?

These projects are being implemented by the relevant central ministries, state governments, ports and other agencies primarily through the private or public-private partnership (PPP) mode. Innovative means of funding are being explored by the MoS. Sagarmala Development Company Limited has been incorporated to look at the financing models with equity support up to 50 per cent of the project cost.

Sagarmala requires efficient coordination between the centre and states for its successful implementation. What are the steps being taken in this regard?

As a part of the institutional structure and to ensure coordination between the state and central governments, various committees such as the National Sagarmala Apex Committee, the Sagarmala Coordination and Steering Committee and state Sagarmala committees have been set up. These committees meet at regular intervals to discuss various aspects related to the programme. Besides these, stakeholder workshops are conducted regularly with the governments of maritime states and other stakeholders across the country.

What are the key challenges being faced in the implementation of the programme?

Issues such as delays in land acquisition and obtaining environmental clearance are the key challenges in the timely implementation of some of the infrastructure projects proposed in the programme.