Rising Demand

Port operators’ experience, issues and outlook

Dredging has emerged as a distinct industry in the past few years with huge demand from ports and inland waterways. However, there is a lag between dredging capacity and the emerging demand in the country. At present, Indian ports are facing the challenge of handling larger vessels with the global shipping fleet growing in terms of size and capacity. There is a significant need to undertake capital dredging activities at both major and non-major ports to accommodate these vessels. This would require the government to take steps towards resolving issues such as lack of competition and high investment requirements to make the dredging segment more attractive for private players.

Dredging is required by most ports round the year. At present, most of the ports are only engaged in maintenance dredging activities with plans to undertake capital dredging in a couple of years. Indian Infrastructure takes a look at the dredging initiatives taken across select ports…

New Mangalore Port Trust

The lagoon area of the New Mangalore Port Trust (NMPT) is 129 hectares, and has been developed by capital dredging in phases. The most recent capital dredging activity was carried out in 2016-17 wherein berth no. 16 was developed. The volume of dredging undertaken was 0.87 million cubic metres (mcm) at a cost of Rs 335 million. Further, in 2019-20, maintenance dredging of 7.45 mcm was undertaken at a cost of Rs 404 million as compared to 5.58 mcm of dredging undertaken in 2018-19 for Rs 262.7 million. Most of the dredging works at NMPT have been undertaken by the Dredging Corporation of India (DCI). At present, the port trust has invited bids for dredging works to the tune of 6.5 mcm. However, there are no plans to undertake capital dredging at present Initial investigations have revealed the need for the creation of a new berth (no. 17) which will have a component of capital dredging.

Cochin port

The riverine port has to undertake regular maintenance dredging due to siltation issues. Dredging to the extent of 24 mcm is taken up at the port annually. At present, only maintenance dredging is carried out at the port. However, there are ongoing discussions with the government regarding future capital dredging plans.

Cochin port plans to undertake capital dredging in the next two-three years, for which estimates have been provided by the National Technology Centre for Ports, Waterways and Coasts. The Cochin Port Trust was the first to economise on dredging works with the use of the nautical depth concept. The concept is applied to survey muddy ports and channels to determine safe navigation depths and eliminate stretches that are inefficient to dredge due to low solid concentration and low-value material. This reduces the depth to be dredged, thereby cutting down dredging expenses. The port has brought down costs from Rs 1.4 billion per annum in 2015-16 to Rs 0.84 billion per annum at present using the nautical depth concept. However, there is no common formula that can be applied to all ports as dredging is mostly dependent on the geotechnical specifications which are unique for all ports.

Jaigarh and Dharamtar ports

The JSW Infrastructure-owned Jaigarh and Dharamtar ports are also actively undertaking dredging works. The group had undertaken capital dredging to the tune of 18 mcm at Jaigarh port in 2015. It also undertakes 2 mcm of maintenance dredging at the port annually. At its Dharamtar port, JSW had undertaken 2 mcm of capital dredging and 50,000 cubic metres of maintenance dredging. There are no capital dredging plans for this year at the ports. However, JSW is working towards developing ports at new locations, including the port expected at Paradip that will involve 20 mcm of capital dredging works.

JSW has started awarding maintenance dredging contracts for a period of three years. This has helped in maximising the dredging depths, and ensuring that dredging is more economical and the pre-decided work is delivered on time. This method has turned out be beneficial for both the ports as well as the contractors.

Challenges faced by ports

One of the major issues faced by ports is inadequate participation by contractors in the dredging segment. This results in a lack of competitive bids, besides reducing price efficiency. Most of the dredging works are awarded to DCI on a nomination basis. However, its capacity is not commensurate with the demand for dredging works in the country. The investment requirement in the dredging segment is huge, and this has resulted in very few players in the market. In order to become self-sufficient in dredging, India needs to attract greater participation in the segment as there is requirement for dredging round the year.

Besides, a large number of capital dredging contracts in the country are under arbitration because the contractors contend that the data provided to them is no the same as the on-ground situation. This issue has been faced by ports with both domestic as well as foreign players. Therefore, there is a need to have sound and reliable geotechnical investigations with third-party players who are experienced in survey and measurement of depths. Another challenge faced by the ports is the tardy process of obtaining environmental clearances for dredging works. Capital dredging should be liberalised in terms of easier environmental clearances to increase the activity. Finally, another issue related to dredging is the reuse of dredged material for commercial purpose as it is dumped/wasted under current practices. There is huge scope for research on the utilisation and reuse of dredged material.

Impact of Covid-19

The Covid-19 pandemic did not have much impact on maintenance dredging works at ports. Since dredging is also included in port operations, maintenance dredging activity continued unhindered at the ports even during the pandemic. However, all the ports have suffered huge cargo losses due to trade restrictions. Cochin port, in particular, lost about 30 per cent of the cargo volume in the first quarter of 2020-21 as compared to the last quarter of 2019-20. Therefore, while the pandemic did impact operations adversely, it did not affect the dredging activities.

The way forward

In India, there is a lack of capacity to undertake capital dredging while only a handful of players dominate the maintenance dredging market. There is an urgent need to increase competition in the dredging segment. The private sector is reluctant to enter the market due to uncertainty in the dredging business. The practice of standard contracts with fair allocation of risks and responsibilities between ports and contractors can go a long way in attracting private players. There is a need to ensure that reliable and sound geotechnical surveys and third-party surveys are undertaken. The contracts should be clear and unambiguous, leaving no scope for misinterpretations/disputes at a later stage. Other issues such as high cost of dredging, limited knowledge of dredging contracts, a shortage of qualified and certified personnel for dredging, lack of proper soil investigations, and environmental impact of dredging need to be addressed in a timely manner. Besides, exploring the market for reuse of dredged material is vital to reap the commercial benefits of dredging and may be help the ports in recovering a part of their dredging costs. Therefore, the government as well as the ports should tap the opportunity to make the segment more attractive for domestic and foreign players.

Based on a panel discussion among Prasant Das, Dredging Head, JSW Jaigarh Ports; ParitoshBala, Chief Engineer and A.V. Harinath, Deputy Chief Engineer, Civil, New Mangalore Port Trust; and G. Vaidhyanathan, Chief Engineer, Cochin Port Trust, at a recent India Infrastructure conference




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