Incentivising Water Transport: Progress under the Coastal Berth Scheme

Progress under the Coastal Berth Scheme

India is witnessing a definite, albeit slow, shift towards the use of coastal routes for the transportation of goods. This is as a result of the increased attention given to this mode of transport, especially in the past few years. There is a renewed focus on coastal shipping and that too on a much bigger scale. Ports have set up dedicated coastal berths, reduced port charges, offered discounts, etc., to promote coastal traffic.

As per the latest estimates available, during 2016-17, of the total traffic handled at Indian ports, coastal traffic accounted for about 201.01 million tonnes (mt), a 17 per cent share in total traffic, as compared to 16.67 per cent in 2015-16. During the five-year period from 2012-13 to 2016-17, coastal traffic at major ports grew at a compound annual growth rate of 5.42 per cent, while traffic at non-major ports grew at 5.06 per cent. The year-on-year growth also remained positive during 2012-17 except a negative growth of 3.62 per cent in 2013-14.

Coastal Berth Scheme: Scope and progress

The government’s biggest programme for the maritime sector till date, Sagarmala aims to double the share of domestic waterways (coastal and inland) by 2025. The Coastal Berth Scheme (CBS) is one of the key enablers for meeting this objective. The scheme will help ports create dedicated infrastructure for handling coastal cargo. The projects sanctioned under the scheme are expected to create around 10 million tonnes per annum (mtpa) capacity for handling such cargo.

The CBS aims to provide financial support to ports and state governments for the creation of infrastructure for cargo and passenger movement by sea or national waterways (NWs). The financial assistance from the central

government, which is 50 per cent of the total project cost, is subject to the following:

  • A maximum of Rs 250 million for projects relating to the construction/upgradation of coastal berths at major/non-major ports.
  • A maximum of Rs 10 million for the construction of platforms/jetties for hovercraft and seaplanes by ports/state governments and passenger jetties in NWs and islands by state governments.
  • A maximum of Rs 150 million for the mechanisation of berths by major/non-major ports.
  • A maximum of Rs 50 million each for capital dredging at operational non-major ports and for the construction of breakwater for existing and greenfield ports.

The balance expenditure has to be incurred by the respective ports/ state government from their own resources.

Under the CBS, projects for the construction/upgradation of exclusive coastal berths for coastal cargo and berths/jetties for passenger ferries, mechanisation of coastal berths, capital dredging for operating non-major ports, construction of breakwaters for existing and greenfield non-major ports, construction of berths/jetties in NWs and islands by state governments, and construction of platforms/jetties for hovercraft/seaplanes are considered for assistance.

The government has also extended the period of the CBS from April 1, 2017 to March 31, 2020. The scope of the scheme has also been expanded to cover the cost of detailed project report (DPR) preparation and capital dredging at the major ports.

In addition, the Ministry of Shipping (MoS) has taken up projects worth Rs 23.02 billion for financial assistance under the scheme. The projects are distributed across eight states with the highest number of projects in Maharashtra (12), Andhra Pradesh and Goa (10 each), Karnataka (6), Kerala and Tamil Nadu (3 each), Gujarat (2) and West Bengal (1).

The most recent beneficiaries of the scheme are the Jawaharlal Nehru Port Trust (JNPT) and the Karnataka government. The MoS sanctioned funds worth Rs 250 million as grants-in-aid to JNPT and another Rs 500 million to the Karnataka government for Karwar port for developing various infrastructure facilities. The funds sanctioned for JNPT will be utilised for executing a project involving the construction of a coastal berth (270 metres x 30 metres) and a port craft jetty, and reclamation and capital dredging works at the coastal berth. The project at Karwar port involves the extension of the existing southern breakwater by 145 metres and the construction of a new north breakwater of 1,160 metres.

The way forward

In addition to financial assistance, 14 coastal economic zones (CEZs) have been identified along the country’s coastline under Sagarmala, with each coastal state having one or more CEZ. These zones have been geographically mapped out covering one or more districts, and specific industrial clusters relevant for each CEZ have been proposed. “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 these zones. Meanwhile, of the 14 CEZs identified, preparation of DPRs for two CEZs in Andhra Pradesh and Gujarat has been taken up on a pilot basis,” says Abhishek Chandra, deputy secretary, MoS.

Going forward, the successful implementation of the scheme coupled with better infrastructure for coastal shipping would be key for ensuring an increased share of coastal cargo in the total traffic handled at the ports.

Garima Arora