Dredging has emerged as a distinct industry over the years to increase the draught levels at Indian ports. While most of the major ports have a draught level of at least 14 metres, this is lower than the level at many international ports. The ministry is now planning to increase draught levels by 2-3 metres, to a total of 17 metres, enabling ports to handle container ships of higher capacity.
Besides ports, dredging is being undertaken at national waterways (NWs) and for beach nourishment, land reclamation and pipeline laying. The Inland Waterways Authority of India undertakes regular assured depth-based dredging on required stretches of NWs.
A look at the dredging activities at ports and waterways…
Experience so far
Both capital and maintenance dredging is undertaken at Indian ports. Between 2014-15 and 2019-20, at least 400 million cubic metres (cum) was dredged at the country’s major ports. Of this, capital dredging of 49.08 million cum was carried out at an expenditure of Rs 30.96 billion. During fiscal year 2019-20, the maximum capital dredging was carried out at Paradip port (1.05 million cum). It was followed by the Jawaharlal Nehru Port Trust (JNPT) (0.44 million cum).
With respect to maintenance dredging, works to the tune of 347.02 million cum were undertaken at major ports between 2014-15 and 2019-20. Port-wise, during 2019-20, the maximum maintenance dredging was carried out at Cochin port (25.21 million cum), followed by the ports of JNPT (8 million cum) and Kolkata (8.48 million cum). Among the Indian ports, Cochin port has the highest annual siltation load, leading to a high demand for maintenance dredging all through the year. Besides, the Haldia Dock Complex at Syama Prasad Mookerjee port (erstwhile Kolkata port) has depth limitations on account of high siltation; hence, the requirement of high annual maintenance dredging.
With regard to dredging players, the Indian dredging market has both public and private players. The Dredging Corporation of India (DCI), a public sector entity, is one of the key players in the dredging industry. DCI has a fleet of 17 dredgers at present. It accounts for a notable share in the dredging market and its disinvestment bodes well for the corporation. In March 2019, the central government sold a 73.44 per cent stake in DCI to a consortium of four major port trusts – Paradip Port Trust, Visakhapatnam Port Trust, JNPT and Deendayal Port Trust. Currently, DCI has a healthy order book for the next couple of years and its dredgers are fully employed.
In February 2021, DCI signed an MoU with the New Mangalore Port Trust for undertaking maintenance dredging for a period of three years at an estimated cost of Rs 1.11 billion. Following this, in March 2021, the corporation signed an MoU with Vizag Sea Port Private Limited (VSPL), Visakhapatnam, for maintenance dredging at the berths of VSPL for a period of five years. It is expected to cost around Rs 100 million. Furthermore, DCI has been awarded maintenance dredging contracts at Paradip and Cochin ports for the year 2021-22. The total quantity to be dredged at Paradip port is 7 million cum at an estimated cost of Rs 980 million. It has commenced dredging at the approach channel, entrance channel, turning circle, docks, the Mahanadi river mouth and sand trap of the port. With regard to Cochin port, the quantity to be dredged is 24 million cum and is estimated to entail a cost of Rs 1.23 billion. Meanwhile, DCI has commenced works at Cochin port by deploying its Dredge XV and Dredge VIII dredgers.
Much attention has been given to the indigenous manufacturing of dredgers under the Make in India initiative or the Atmanirbhar Bharat Abhiyan. Treading on the same lines, Cochin Shipyard Limited (CSL) will build two high-end and large capacity dredgers for DCI in a deal worth Rs 20 billion. An MoU for the same was signed between DCI and CSL in February 2021. This is the first time that a high-end complex dredger will be constructed in an Indian shipbuilding yard as per international standards. Further, this will be the first dredger to be built by CSL at its yard in Cochin, following an MoU signed with IHC Holland BV, the world’s largest dredger builder, in November 2020, for collaboration on technology and design for high capacity complex dredgers.
Accordingly, trailing suction hopper dredgers (TSHDs), used to maintain the channel of ports, will have a hopper capacity of 12,000 cum each. The construction of the dredgers will be funded through a mix of equity from CSL and the four major ports of Paradip, Visakhapatnam, Deendayal and JNPT, besides a bank loan. Meanwhile, the scope of the deal includes an option for the construction of a third dredger through technology collaboration with a Dutch firm. However, the capacity of the third dredger will be finalised on the basis of gap viability analysis of the dredging market in 2025 to achieve the dredging requirement at major ports, as envisaged in the Maritime India Vision 2030.
The flagship programme of the maritime sector, Sagarmala has also given an impetus to the dredging industry. Investments worth more than Rs 12 billion are being planned under the programme for dredging at both major and non-major ports. Other than brownfield ports, greenfield port development projects also offer abundant opportunities to dredging contractors.
In recent times, there has also been a focus on ensuring sustainable dredging practices and alternative use of dredged material. The recently launched Dredging Guidelines, 2021 provide a road map for dredging activities for the next 10 years. In addition to ensuring timely and cost-effective implementation of projects, the guidelines focus on the use of modern techniques of dredging. The guidelines also specify that the recycling of dredged material should be included in the bid documents of the dredging projects to ensure its reuse. Furthermore, the guidelines define points for project award on a public-private partnership (PPP) basis and doing away with the upfront payment for projects. Currently, two committees are working on the modalities of the PPP model for tendering of dredging projects.
What lies ahead?
With more port development, waterway expansion and fairway development works being undertaken, the demand for dredging will increase in tandem. The Dredging Guidelines, 2021 estimate a net dredging of 3 billion cum over the next decade, thus offering sizeable dredging opportunities. Further, the development of greenfield ports by major port trusts and state maritime boards offers considerable dredging opportunities.
While the current scenario paints a lucrative picture of the dredging market, there is also a need to augment the dredger fleet to match its requirements. Addressing various unresolved concerns such as inaccurate assessment of project costs and scope, lack of dredger building and repair facilities, inefficient investigation and survey techniques, and shortage of trained personnel is another must. Meanwhile, ensuring timely and cost-effective completion of dredging projects is the key.
Nonetheless, continued emphasis on deepening and widening the draught levels at ports as well as government initiatives for the development of inland waterways will expand market opportunities for dredging contractors, technology and equipment suppliers, consultants and other stakeholders.