The requirement of dredging at Indian ports is huge. To address the long-pending issues of industry stakeholders, the Ministry of Shipping (MoS) is releasing new guidelines for dredging projects at the major ports. Speaking at India Infrastructure’s eleventh annual conference on Dredging in India, H.N. Aswath, development advisor (ports), MoS, shared his views on the current dredging scenario at the major ports, new dredging guidelines, the effect of Covid-19 on dredging projects, future maintenance and capital dredging requirements, and the way forward for the segment. Excerpts…
A significant amount of dredging activity is being undertaken at ports and inland waterways to increase navigable depths. During 2017-18 and 2018-19, 159.36 million cubic metres (cum) of capital and maintenance dredging was carried out at the major ports. Of this, capital dredging accounted for about 20 per cent.
New dredging guidelines – Need and proposed amendments
The Guidelines on Undertaking Dredging at Major Ports, 2016, cover the standard operating procedures (SOPs) for capital dredging as well as maintenance dredging works. However, since 2016, several developments have taken place in the dredging segment that have necessitated the revision of the guidelines. Key among these was the strategic sale of the Dredging Corporation of India (DCI) to a consortium of four major ports – the Visakhapatnam Port Trust, the Paradip Port Trust, the Jawaharlal Nehru Port Trust and the Kandla Port Trust. DCI’s stake was disinvested in order to bring in greater transparency, ensure efficient utilisation of dredgers and increase efficiency in dredging projects.
The incorporation of the National Technology Centre of Ports, Waterways and Coasts (NTCPWC) in the ambit of the Sagarmala programme is another development in the dredging segment. The NTCPWC was set up to develop state-of-the-art technologies and products, provide appropriate solutions, enable fast-track innovations, etc., for dredging activities at the major ports.
However, taking into consideration the changed requirements of the dredging segment, there is a need to revise the guidelines. Additional parameters need to be incorporated in order to match the best international practices being followed at key transshipment hubs of Colombo, Rotterdam, Antwerp and Singapore to ensure optimal utilisation of waterways. Besides, revised parameters are required to include various developments in the field of survey technologies; estimate the dredging cost as per the operational cost of the dredger deployed and the cost involved in its mobilisation and demobilisation; ensure effective use of dredged material; minimise disputes and ensure their quick redressal; adopt the latest technical parameters for surveys and investigations as recommended for dredging projects internationally; and engage project management consultants for projects along with a separate third-party surveying agency to avoid future conflicts.
With respect to contracting practices, the MoS is planning to undertake dredging projects on a public-private partnership (PPP) basis. It is also exploring the possibility of deploying the hybrid annuity and assured depth models for dredging projects.
The new guidelines, which are expected to be released in the next two-three months, comprise specific chapters relating to SOPs for dredging projects; soil investigations; detailed project reports (DPRs); an environmental code of practice for estimating the cost of dredging projects; a monitoring mechanism, a periodic review of dredging works and an information system; and a PPP model for dredging projects; among others.
One of the key aspects of the new guidelines is with respect to DPRs. The MoS has revised the guidelines so that the major port trusts include all the particulars of a project in the DPR itself – the need for and scope of dredging works, details of the studies undertaken (such as investigations and surveys), outcome of feasibility and traffic studies, site information, navigation requirements, project economics, environmental assessment, measurable/ quantifiable deliverables, project implementation schedule, dredging volume estimates, alternative use of dredged material, etc.
Much emphasis has also been laid on the involvement of contractors from the early stages of a contract. In this regard, the new guidelines will necessitate that contractors carry out their own investigations so as to avoid any disagreements at a later stage. Meanwhile, the major ports will provide all the geotechnical information on their websites, and this will be freely accessible to the contractors. Besides reducing arbitrations arising out of discrepancies in geotechnical investigations, the new guidelines also aim to give more power to contractors in project execution.
The guidelines also stress on the need for a standardised procedure for estimating the cost of a dredging project. Cost estimates will be determined on the basis of scientifically determined market rates, that is, the ratio of the total cost of a dredging project and its execution to the total quantity to be dredged.
With regard to the tendering criteria for dredging projects, the new guidelines will include the pre-qualification criteria for dredging firms, efficiency parameters and technical specifications of dredgers, besides a specific procedure for contracting on an engineering, procurement and construction basis for an assured depth contract.
The way ahead
In light of the increased demand for greater depths at Indian ports and the emphasis being laid on developing inland waterways as an alternative mode of transport, the MoS expects the net dredging quantity to increase to around 3 billion cum (1.6 billion cum capital dredging and 2.4 billion cum maintenance dredging) in the next 10 years. Capital dredging is imperative for increasing draught levels at the major ports. In this respect, dredging companies including DCI are expected to gear up for the increased capital dredging requirements. In order to achieve this, the MoS has conceived of the Maritime Vision 2030 which covers all aspects of the ports and shipping sector under its ambit.
While the outbreak of Covid-19 affected all the segments of the maritime industry, dredging has been relatively less impacted. Although capital dredging projects came to a complete halt, maintenance dredging projects continued despite the pandemic. Meanwhile, ground-level works, such as dry docking, faced delays due to lack of workers. However, the ministry expects dredging works to resume fully post-Covid.
With regard to the future demand for dredging, the greenfield ports envisaged under the Sagarmalaprogramme are expected to give a major impetus to the segment. For example, the upcoming Vadhavan port in Maharashtra that has been planned with a draught level of 18 metres presents significant opportunities to dredging contractors. The MoS is also planning to increase draught levels at ports further so that they are able to handle vessels with a capacity of up to 20,000 twenty-foot equivalent units. This will necessitate dredging to the tune of 2 million cum-4 million cum at ports, offering huge scope in the capital dredging segment. Given the dredging requirement, growth prospects exist for both domestic and international dredging players, since DCI alone will not be able to meet the increased demand.