The Ministry of Shipping (MoS) has taken a number of initiatives to step up investments and attract greater private participation in the maritime sector. The Sagarmala programme with its focus on port-led development will be the biggest game changer for the maritime sector. At a recent India Infrastructure conference, Kailash Kumar Aggarwal, joint secretary, Sagarmala, MoS, shared his views on the progress in the sector, the ministry’s accomplishments in the past few years, key challenges and future areas of focus…
Indian port capacity has increased substantially in the past few decades. As of March 2019, total port capacity stood at 2,406 million tonnes per annum (mtpa), which is sufficient to cater to traffic growth for next the four to six years, even at a 10-15 per cent growth rate. Of the total capacity, major and non-major ports accounted for 1,514 mtpa and 892 mtpa respectively. Overall, capacity is not a constraint, though for certain locations and some particular types of cargo, there is need for capacity creation. Ports are already working in this direction. A roadmap has been created for increasing Indian port capacity to 3,300 mtpa to cater to the projected traffic of 2,500 mtpa by 2025.
In 2018-19, total cargo traffic at Indian ports stood at 1,277.6 million tonnes (mt), a year-on-year growth of 5.7 per cent. The year-on-year growth for major and non-major ports stood at 3 per cent and 9.2 per cent respectively. Between 2015-16 and 2018-19, total cargo traffic (bulk and container) at the major ports increased at a compound annual growth rate (CAGR) of 4.8 per cent, to reach 699 mt. Of the total traffic at the major ports, bulk cargo accounted for the largest share at 79 per cent (554 mt) and the balance 21 per cent was container traffic (146 mt). However, in terms of growth in the past four-five years, containers took the lead with 6 per cent growth, while for bulk it was 4 per cent.
Coastal shipping and inland water transport have become key focus areas for the government with a number of supportive measures announced recently. Licensing relaxations have been made under Sections 406 and 407 of the Merchant Shipping Act, 1958, for fertilisers, agricultural products, fisheries, horticultural and animal husbandry products, empty containers and exim containers being transshipped from another Indian port, special vessels such as roll-on, roll-off, ro-pax, project cargo and over-dimensional cargo. Allowing carriage of coastal containers through the territorial waters of Sri Lanka, Bangladesh and Myanmar; streamlining the mechanism for freight subsidy reimbursement for fertilisers; a minimum 40 per cent discount on vessel- and cargo-related charges for vessels carrying coastal cargo at the major ports, and allowing exim containers to be used for domestic purposes and domestic containers for exim purposes are other initiatives that have been taken.
In light of the increased attention given to the segment, coastal traffic at Indian ports increased at a CAGR of 11.3 per cent between 2015-16 and 2018-19. In contrast, between 2011-12 and 2014-15, the CAGR stood at 2.2 per cent. In 2018-19, the growth of coastal cargo was 14.3 per cent, while the growth of exim cargo was 4.9 per cent. At the start of the Sagarmala programme in 2015-16, coastal cargo was 12 per cent of the total cargo volume, while in 2018-19 it increased to around 20 per cent. The growth in coastal container movement has also been quite substantial. Between April-December 2015 and April-December 2018, coastal container traffic increased at a CAGR of 38 per cent. Overall, the government aims to reach a volume of 370 mt by 2025 (220 mt via coastal shipping and 150 mt by inland waterways). In 2018-19, traffic through the coastal and IWT routes stood at 120 mt and 72 mt respectively.
In the past few years, the MoS has announced a number of policies and reform measures to attract more investments into the maritime sector. The model concession agreement for public-private partnership projects at the major ports has been revised. A number of modernisation and mechanisation initiatives as part of the ease of doing business (EODB) measures have been taken under the Sagarmala programme to improve overall efficiency of ports. The EODB initiatives taken at the Jawaharlal Nehru Port Trust (JNPT) (on a pilot basis) so far will be extended to all the other major ports. As per the World Bank report on Ease of Doing Business, 2019, India has taken a huge leap of 23 ranks from 100 in 2017 to 77 in 2018. The present port community system (PCS) 1.0 has been upgraded to PCS1x. Container movement has started on national waterways and the Sahibganj multimodal terminal is slated to be operational soon.
Areas related to skill development and manpower training are receiving increased attention. The MoS has signed a memorandum of agreement with IIT Kharagpur for setting up the Centre for Inland and Coastal Maritime Technology on its premises. The centre, to be set up at a cost of Rs 692 million, will cover five domain areas – ship design for coastal/inland waterways, shipbuilding technology and structural design, transport systems and logistics, cryogenic cargo handling, and harvesting green/renewable energy from coastal and inland waters.
Meanwhile, the National Technology Centre for Ports, Waterways and Coasts has been set up at a cost of Rs 705.3 million. The centre has designed a 3D computation model for three major ports to provide forecasts of sediment patterns and water depth, development of and updates on new and existing port layouts for navigation studies in channels using desktop simulators, aerial mapping and development of a complete 3D model of the port area to conduct both onshore and offshore studies.
Major ports are utilising the huge land bank available with them to set up new facilities such as special economic zones, free trade and warehousing zones, etc. Port-led industrialisation projects are under way at JNPT, Deendayal, VO Chidambaranar, Paradip and Kamarajar ports.
However, some issues continue to hamper the growth of the sector. The share of coastal shipping in total cargo movement is quite low at 6-7 per cent. The ecosystem for multimodal transportation is underdeveloped. There is limited availability of rakes at congested sections of Indian Railways. The average distance from the hinterland to the port is quite high as compared to China and other European countries. India’s best container port, JNPT is ranked 28th in the world. Lack of skilled manpower for the port sector and low technology adoption for ports, waterways and inland vessels are other issues impacting the growth of the maritime sector.
The ministry is being proactive and is taking concrete steps to address these issues so that the growth momentum can be enhanced.
“At the start of the Sagarmala programme, coastal cargo was about 12 per cent of total cargo volume, while in 2018-19, it has grown to around 20 per cent.”