The Indian dredging market is serviced by both domestic and foreign players. Some of the major players are the Dredging Corporation of India (DCI), Mercator Limited, Jan De Nul Dredging, and Dharti Dredging and Infrastructure Limited. These companies procure and charter a diverse fleet of dredging vessels and other auxiliary equipment to undertake operations in the country.
In the coming years, immense dredging opportunities will arise from the increasing seaborne trade, government impetus through initiatives such as the Sagarmala programme and the Jal Vikas Marg Project, and desilting of reservoirs, lakes and waterbodies.
Experience so far
In terms of value, the current size of the Indian dredging market is estimated to be around Rs 18 billion. Of the total, major ports account for a share of 80-85 per cent; capital dredging accounts for about 55 per cent while maintenance dredging accounts for the remaining 45 per cent share.
A major challenge being faced by the dredging industry today is the unfavourable tendering process. The conditions stipulated in the tender documents for capital dredging projects are so stringent that only foreign companies or their subsidiaries in India can meet them. This often results in aggressive bidding for maintenance projects. Another factor responsible for aggressive bidding is the existence of excess capacity of trailing suction hopper dredgers in the country. The number currently stands at 28, while only 18 are required for carrying out maintenance dredging. This leads to companies bidding aggressively to capture a higher market share.
At present, several dredging projects are being undertaken at Indian ports. Some of these are the capital dredging Phase II works at the Jawaharlal Nehru Port Trust, dredging at liquefied natural gas terminals in Gujarat (including rock dredging), dredging in the Andaman & Nicobar Islands for the Indian Navy, and maintenance dredging at Kolkata port and capital dredging at Paradip port by DCI.
Dredging of inland waterways is also a focus area for the government. At present, only 60 cutter suction dredgers (CSDs) are undertaking dredging works along the 14,500 km of navigable inland waterways. In contrast, in Bangladesh, there are around 236 CSDs for a total navigable length of 4,500 km of waterways (of which 100 dredgers are owned by the government).
Issues and concerns
Contractual issues are a key area of concern for dredging contractors. At present, there are no standardised contracts for awarding dredging projects. Dredging contracts are treated like other civil engineering contracts. Even though all the major ports come under a single government entity, the Ministry of Shipping, each has a different style of working (in terms of contracts, surveys, etc.). Despite repeated efforts, Fédération Internationale Des Ingénieurs Conseils conditions have not been adopted universally. Besides, the contracts do not clearly spell out technical specifications (such as soil and subsoil information) and engineering requirements in the tender document. This lack of clarity leads to cost escalations, and arbitration and disputes.
Further, there are concerns over the paucity of dredger building and repair facilities in the country. Though there are a few public and private yards for repair of vessels, dedicated dredger dry docking facilities are absent. In addition, technically competent engineers are not available for dredging vessels. In terms of technical know-how, India is still dependent on global assistance because of the lack of a dedicated institute or university providing courses and structured training. Recently, though, some initiatives are being taken in this direction.
Another industry concern is the limited encouragement from the government to the segment in the form of zero import duties, relaxation of customs duties, etc. Dredging companies are required to pay port entry, port exit and other charges though no service is being utilised at the port.
While dredging has been recognised as a crucial activity for port development, a number of issues and concerns still remain unresolved. These need to be urgently addressed to ensure timely implementation of dredging projects. Moreover, the dredging industry also needs to explore new areas of business to reduce dependence on dredging activities at ports as a major source of revenue. Emerging areas such as desilting of water reservoirs, cleaning and rejuvenation of rivers and lakes and dredging of upcoming national waterways will offer huge opportunities to the dredging industry. Finally, greater emphasis should be laid on manpower training and skill development. w
Based on a panel discussion among M.S. Rao, Director, Technical, Dredging Corporation of India; T. Janakaraj Thomas, Marine Consultant, Jan De Nul Dredging India; Dr V.V. Reddy, Executive Director, Dharti Dredging and Infrastructure; and Dr G.Y.V. Victor, President, Mercator Limited, at a recent India Infrastructure conference