A principal maritime state, Odisha has a coastline of about 480 km, extending from Bahuda Mouth in Ganjam district in the south to Bichitrapur (Talashari) in Balasore district in the north. The coastline traverses six coastal districts of the state, namely, Balasore, Bhadrak, Kendrapara, Jagatsinghpur, Puri and Ganjam. The state has a vast hinterland comprising other developing eastern and central Indian states. The establishment of mining-based industrial houses in the hinterland offers long-term potential for cargo that requires seaport facilities in Odisha. The Commerce and Transport Department, Government of Odisha has identified 14 sites for potential development as minor ports, of which 13 have been notified under the Indian Ports Act. Of these, Gopalpur and Dhamra are already operational. Meanwhile, steps are being taken to develop a riverine port on the Mahanadi river near Paradip. The ports and the perennial riverine systems of the state are ideally situated to adopt modern technological advancements in the areas of communication, automation, cargo handling and ship technology. Therefore, the Odisha government intends to implement its vision for the port sector by evolving an integrated strategy.
For the past few years, non-major ports have been leading the growth in the sector. Traffic handled at non-major ports has increased at a compound annual growth rate (CAGR) of 4.29 per cent from 2016-17 to 2021-22. During April-October 2022, India’s non-major ports handled 372.2 mt of traffic, compared to 344.33 mt in the corresponding period of 2021-22, registering a growth of 8.1 per cent. During April-October 2022, Odisha handled 23.53 mt of cargo. Odisha’s share in the total cargo handled by all ports in India is expected to increase from 3 per cent at present to about 23 per cent by 2030.
Odisha port policy
The Odisha state cabinet approved a new port policy on November 18, 2022 which aims to facilitate private sector investments in the maritime sector as well as the development of ports and port-related industries. The policy also promotes other maritime ventures such as coastal shipping, marine tourism, development of multipurpose harbours, introduction of seaplane connectivity, port facilities and the creation of infrastructure for shipbuilding. Further, the policy aims to create an ecosystem that will improve supply chain efficiencies and augment the generation of cargo. It plans to do this by creating land banks around the ports for setting up logistics infrastructure including free trade and warehousing zones, storage facilities, inland container depots, and port and jetty infrastructure. Moreover, a dedicated logistics cell will be established to augment the logistics infrastructure in the state.
Earlier, in 2004, the Odisha government had formulated a policy for private participation in the development of ports. That policy had also proposed a port capacity augmentation plan for the state, which would help identify and improve the cargo handling capacities of the different ports in the state. The policy envisaged an integrated approach, covering ports, industrial and infrastructural development, including inland waterways.
Odisha Maritime Board
Approval of the new policy is crucial, as the state has also constituted the Odisha Maritime Board, whose primary function is to coordinate the activities of non-major ports in the state.
The Maritime Board will reportedly be inviting international competitive bidding and signing an MoU to attract private investors for the maritime development of the state. Besides, captive jetties will be developed, which will enhance the total industrial output of the state.
The Odisha Maritime Board Bill, 2020 was passed in the assembly in February 2021. The bill proposed that the maritime board will have the power to provide for the construction, maintenance and operation of ports in the state directly or via public-private partnership (PPP) mode. As per reports, the Odisha Maritime Board will prepare an maritime perspective plan for the state, encompassing the key strengths and challenges of maritime development. The plan will also study the maritime ecosystem involving ports, hinterland potential, cargo evacuation, port connectivity, environmental enhancement and the development of coastal communities.
Upcoming projects in the state
The central government is planning to turn Paradip Port in Odisha into a mega port, in order to accelerate port-led development in the eastern states of the country. This will comprise various projects at a cumulative investment of over Rs 30 billion. It will involve the deepening and optimisation of inner harbour facilities, including development of the port’s western dock on a build-operate-transfer basis under PPP mode. The development of the new western dock and capital dredging by the selected concessionaire are expected to cost Rs 20.4 billion and Rs 3.52 billion respectively. Paradip port will invest around Rs 6.13 billion towards providing a common supporting infrastructure. Once the project is completed, the port will be able to handle large ships that require an 18 metre draft. This will reduce logistics costs while boosting international trade. Overall, the project will enhance the port’s ability to handle capesize vessels, contribute to the port’s planned capacity addition of 25 million metric tonnes per annum, and improve port efficiency, cargo handling, trade and employment generation. Once completed, these projects are expected to facilitate the import of coal and limestone and the export of granulated slag and finished steel products, considering the large number of steel plants in the hinterland of Paradip Port.
The Odisha government has also identified 300 hectares of land for the development of a riverine port on the Mahanadi river at Akhadasali village in Mahakalapada block. However, only 175 hectares of land will be utilised in Phase I of the project. The remaining portion will be used for future development of the facility. Additionally, Phase I will see the development of 18.43 million tonnes per annum (mtpa) of the port’s projected cargo handling capacity of 45.88 mtpa.
In a recent development, the joint venture of Aicons Engineering Private Limited and IVI Ventures Private Limited won a contract worth Rs 9.99 million for the preparation of a detailed project report for two port connectivity projects in Odisha. The Astaranga port connectivity project involves the construction of a road connecting National Highway (NH)-16 to Astaranga port in Puri district. The Subarnarekha Port connectivity project involves the construction of a road connecting NH-16 to Subarnarekha port in Balasore district. The projects are being implemented under the Bharatmala Pariyojana.
Challenges
Several projects have suffered delays despite the existence of a policy for private participation in the port sector. These were on account of delays in acquiring land, approvals and clearances, as well as other issues. For instance, the Odisha government had signed a concession agreement with Navayuga Engineering Company Limited for the development of Astaranga Port under PPP mode in 2010. The project is still in its early stages, and is facing legal constraints. The total cost of the project is about Rs 73.42 billion. Similarly, the state government had signed a concession agreement with Subarna-rekha Port Private Limited for the development of a greenfield port at the mouth of the Subarnarekha river in 2008. The project has not been able to make much progress due to land acquisition issues and objections from the Ministry of Defence, among other roadblocks.
However, some PPP port projects in the state have seen the light of day. For instance, Dhamra port has become a model of modern maritime trade in Odisha and a successful example of a PPP project. Adani Ports Special Economic Zone was able to complete Phase II of the Dhamra port project ahead of schedule. The port serves as a gateway to Nepal, Bangladesh, Myanmar and the entire ASEAN region.
Next steps
Going forward, focus will be placed on adopting the latest technology and enabling sustainable maritime development in the state. Facilitating private sector investments in the maritime sector will help Odisha emerge as a favoured investment destination, and also provide employment opportunities.
Sidra Siddiquie
