“Sizeable dredging opportunities”

Views of DCI’s Dr George Yesu Vedha Victor

The Dredging Guidelines 2021 are an amalgamation of policies, guidelines and provisions that provide a road map for the next 10 years. They enable sustainable dredging, using modern dredging techniques. The guidelines have been introduced to ensure cost-effective and timely implementation of projects. At a recent conference on “Dredging in Asia”, Dr George Yesu Vedha Victor, Managing Director and Chief Executive Officer, Dredging Corporation of India (DCI), talked about the need for the new dredging guidelines, their salient features, the upcoming dredging requirements, and future plans and strategies. Excerpts…

Need for revised guidelines

In order to streamline dredging operations, the Ministry of Ports, Shipping and Waterways (MoPSW) formulated comprehensive dredging guidelines in August 2016. However, following salient features, the latest technological systems on survey and investigations recommended capital dredging projects; need for ascertaining the estimation of project cost based on acceptable international standards; requirement for the engagement of two different agencies for project management consultancy and third-party survey to avoid conflicts of interest; providing fair and equal opportunities to new entrants; and the need for ensuring beneficial use of dredged material necessitated the new set of guidelines. Following this, in May 2020, the MoPSW came out with a more elaborate version of the dredging guidelines, which are applicable to dredging projects at major ports and naval dockyards in India.

Salient features of the guidelines

The Dredging Guidelines, 2021 envisage dredging to the tune of 3 billion cubic metres (bcm) (1.6 bcm capital dredging and 2.4 billion cum maintenance dredging) over the next 10 years. Currently, 120 million cum annual dredging is being carried out at major ports and dockyards in the country. The guidelines also envisage sustainable dredging, using modern dredging techniques. They promote the waste-to-wealth concept of recycling dredged material and ensuring its beneficial use. To put things in perspective, Haldia port has recently started the treatment of sand for selling it for construction purposes, on a small scale. In addition, the ports of Visakhapatnam, Chennai and Paradip have undertaken beach nourishment works to avoid excess soil erosion.

With regard to the use of modern techniques of dredging, till date, major port trusts have been undertaking dredging works within the framework of environment parameters made available to them, either by the government or dredging-related international bodies. However, in 2019, it became imperative to ensure adherence to enhanced requirements as per the International Maritime Organisation’s regulations, Ports Authorities Bill, amended Environmental Act, National Waterways Act and Merchant Shipping Act.

In a nutshell, the guidelines essentially involve adopting an international work environment and standards; calculating costs based on dredger-specific calculations rather than generic calculations; providing fair and equal opportunity for new entrants (wherein new entrants can bid for a project in joint venture/collaboration with an experienced dredging company); and allowing major ports, to nominate directly to the port-owned DCI or to invite dredging bids through open competitive bidding. Meanwhile, strict enactment of the guidelines specified under the Permanent International Association of Navigation Congresses, International Association of Ports and Harbors, the International Hydrographic Organization, the Construction Industry Research and Information Association (cost guidelines), BS Standards and International Federation of Consulting Engineers contract has been specified in the guidelines. Further, the guidelines follow cost estimates of the CIRIA dredging model, which is a globally acceptable model.

One of the most important aspects of the Dredging Guidelines, 2021 is with respect to its dispute resolution mechanism. In this regard, the central government has already constituted two different committees for dispute redressal – Society for Affordable Redressal of Disputes-Ports (SAROD-Ports) and Conciliation and Settlement Committee (CSC). The CSC is a three-member committee consisting of a lawyer and subject matter experts from the MoPSW and the Ministry of Statistics and Programme Implementation. SAROD-Ports is for providing affordable and timely resolution of disputes in a fair manner and enrichment of the dispute resolution mechanism with the panel of technical experts as arbitrators. Meanwhile, the guidelines also necessitate the incorporation of a dispute resolution board by all major ports, with a dredging expert, a representative from the port trust and another expert from the contractor’s side, for ensuring quick redressal of legal issues. Further, the Dredging Guidelines, 2021 call for keeping a check on consultants and due penalties have been introduced in the case of improper execution of a project.

With regard to the award of dredging projects, major port trusts can nominate DCI following market price discovery, which was included in the earlier guidelines as well. As per the new guidelines, major port trusts are now allowed to invite open competitive bidding as well for the award of dredging contracts. However, they have to ensure adherence to certain guidelines and parameters stated under the Make in India and Atma Nirbhar Bharat programmes. Accordingly, any tender that is worth less than Rs 2 billion has to be awarded to a domestic company.

As a way forward, major port trusts have to upload their past dredging information, both commercial and operational, on their websites, containing information related to the volumes dredged, frequency of dredging, slopes maintained, project duration and contractors involved, among others. Further, major port trusts are required to submit a five-year dredging plan to the MoPSW and the Indian Ports Association.

With respect to project formulation, a generic road map for the implementation of a dredging project is to be created at the time of commencement of the planning exercise. In order to appreciate this, a generic decision chart for maintenance and capital dredging projects has been provided in the guidelines. The guidelines also make a case for undertaking assessment of bathymetry, soil or sediment type and its characteristics, possibility of reuse of dredged material, selection of disposal and/or reuse site, dredging quantity and cost estimates at the planning stage itself. In addition, environmentally friendly dredging will be a permanent element in dredging projects. Identification of dredging projects, wherein the most appropriate disposal option for dredged material to be undertaken in a time-bound manner with a duration of up to 10 years (2020-30), to achieve Maritime India Vision 2030, could be a key to this aspect. Accordingly, this exercise should be started by all major ports immediately in order to achieve the respective goals in terms of cost and environmental benefits.

So far, dredging projects at major ports have been awarded on an engineering, procurement and construction basis, depth-based model, lump sum basis, or cubic metre basis. The Dredging Guidelines, 2021 have clearly defined points for a public-private partnership (PPP) model for dredging works. At present, two committees – one at the NITI Aayog level and the other at the MoPSW level – are working on the modalities of the PPP model for tendering in dredging projects. The committees are expected to come out with a report on the same in the coming three to four months. The Dredging Guidelines, 2021 have also clearly stated the methods to be followed for both maintenance and capital dredging projects. Meanwhile, the guidelines advocate doing away with the upfront payment for dredging projects.

Future opportunities and the way forward

The Indian maritime sector offers abundant opportunities in the dredging segment. It is foreseen that major ports will deepen and widen their navigational channels to attract deep draught vessels. The forecast indicates that the net dredging quantity to be dredged in the next 10 years would be approximately 3 billion cum, thus offering sizeable dredging opportunities. The development of greenfield ports by major port trusts and maritime states also offers considerable dredging opportunities. To exemplify, Andhra Pradesh is coming up with three greenfield ports, which would require a significant amount of dredging works.

Further, the deepening and widening of ports under brownfield development; development of waterways; and restoration of waterbodies, floodplains, dams and reservoirs offer considerable opportunities to the dredging contractors. Given the future plans, there is an acute shortage of dredgers in India, making it necessary to augment the current fleet to cater to the requirement.

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