The global dredging market is currently valued at around $17 billion-$20 billion, and is expected to grow at a CAGR of 2.2 per cent to about $20 billion-$22 billion by 2034. The primary contributor to the global demand is seaborne trade, which holds a 50 per cent market share. The majority of this trade comes from three key regions: the Middle East, Southeast Asia and Africa.
The expansion in world trade and an enhanced focus on coastal tourism and protection has contributed significantly to the overall market. For instance, the expansion of Rotterdam port, the Suez Canal, Panama Canal and Antwerp port, and the development of Hambantota port in Sri Lanka has influenced sectoral growth. Similarly, an increase in coastal tourism at Miami Beach, Dubai Marina, Marina Bay Sands, Gold Coast, etc., has been instrumental in driving growth.
The growth in population and rapid urbanisation in India, China, Indonesia, Brazil, Bangladesh, Mexico, Japan, Ethiopia and the Philippines have also played a key role. Further, the transport of oil, gas and other energy resources requires regular dredging maintenance. With the current rise in energy demand, the need for dredging is increasing proportionally to support and maintain the critical sea transport infrastructure.
Following the expansion of the global shipping fleet, both in terms of size and capacity, ports have realised the importance of deeper berths and channels, which help accomodate bigger vessels, attract more cargo and increase revenues. The industry’s growth is also being driven by technology integration, sustainability initiatives (including the deployment of environmentally friendly dredging equipment) and automation.
Present scenario in India
The dredging market in India primarily includes capital dredging (deepening and widening of draughts to create depths) and maintenance dredging (maintenance of depths). At present, the Indian dredging market encompasses about 157 million cubic metres (mcm). Of this, maintenance dredging accounts for about 110 mcm and capital dredging, about 47 mcm.
One of the major focus areas in India’s dredging sector is sustainable dredging, in view of the environmental cost of dredging activities. Dredging guidelines with standard operating procedures were issued by the Ministry of Ports, Shipping and Waterways (MoPSW) in August 2016 for capital and maintenance dredging. These guidelines were revised in 2021 with the introduction of many new technological systems for the survey and investigation of capital dredging projects, to ensure that the estimation of project cost is based on acceptable international standards followed by major ports, or the schedule of rates from the state maritime administration. Further, in March 2023, to introduce the concept of “waste to wealth” in the dredging sector, the MoPSW issued an addendum to the dredging guidelines for major ports. The addendum outlines the wide range of beneficial uses of dredged material, such as engineering use for construction purposes, and environmental enhancement (including beach nourishment).
In order to accelerate the MoPSW’s waste-to-wealth initiative, Sagar Samriddhi, an online dredging monitoring system, was launched in June 2023. This was developed by the National Technology Centre for Ports, Waterways and Coasts, which is the technological arm of the MoPSW. It will ensure synergy between various input reports such as the daily dredging report, and the pre- and post-dredging survey data, before processing and producing a real-time dredging report. Moreover, the system will allow daily and monthly progress visualisation, dredger performance and downtime monitoring, easy location tracking, and snapshots of loading, unloading and idle time.
Catalysts for the Indian dredging market
The Indian dredging market is being propelled by several key growth drivers. Port maintenance and expansion initiatives, such as those at Visakhapatnam port and Kolkata port, have ensured adequate depth in shipping channels for large vessels, while also addressing high siltation issues. The development of inland waterways, as seen with National Waterway (NW)-1 and NW-2, has enhanced year-round navigability, supporting trade and reducing transportation costs. Dharti Dredging and Infrastructure Limited recently won a contract worth Rs 786.39 million for fairway maintenance on quantity-based dredging of the Majhaua-Ghazipur stretch (115 km) under the capacity augmentation project for NW-1 (Jal Marg Vikas).
Land reclamation projects, such as the Mumbai Land Reclamation Project and the Mangrove Restoration Project in Gujarat, have contributed to coastal protection and land reclamation. The overall economic growth and trade expansion has driven the need for enhanced port capacities, as evidenced by developments at Jawaharlal Nehru Port Trust and Paradip port.
India’s major ports are exploring public-private partnership (PPP) in dredging, whereby the operator can recover costs linked to channel traffic. A total of 15 firms have submitted expression of interest bids for the development and maintenance of land to be created off the Vadhavan coast through dredging, reclamation and the construction of a shore protection bund, under the Vadhavan port project. Meanwhile, the Paradip Port Authority recently invited bids for the implementation of a maintenance dredging project at Paradip port in 2025-26. The last date for bid submission was October 29, 2024.
Key players
The Indian dredging market comprises both public and private sector companies. Adani Ports and Special Economic Zone Limited operates a big fleet of 23 dredgers. It also has a large fleet of support vessels and equipment such as multi-utility craft, survey vessels, floating cranes and jack-up barges. This equipment is operated and maintained by a team of over 1,000 personnel. Well-maintained dredgers, highly motivated and trained personnel, innovative in-house workshops, dry dock facilities and survey support are the company’s strengths, enabling efficient operation. Meanwhile, the the Dredging Corporation of India’s fleet and equipment include 10 trailing suction hopper dredgers, one cutter suction dredger, one backhoe dumb (non-propelled) dredger, one inland cutter suction dredger and auxiliary craft to assist the main fleet. Besides, a number of foreign players such as the Netherlands-based Royal Boskalis Westminster N.V. and Van Oord, and the Luxembourg-based Jan De Nul Group have gained a significant foothold in the domestic dredging market.
Sector hurdles
The dredging sector faces several operational challenges. Key issues include a lack of standardisation in contracts and regulatory frameworks, a shortage of repair facilities and outdated equipment. Moreover, inefficient soil investigation and survey techniques diminish the effectiveness of dredging operations. Further, the sector is grappling with a shortage of trained personnel.
The capital-intensive nature of dredging activities, characterised by high labour and equipment costs, presents financial hurdles. Environmental concerns add to these challenges, as dredging can adversely impact marine ecosystems through sediment contamination and habitat disruption. Consequently, regulatory compliance, involving permits and adherence to environmental regulations, becomes necessary. This, again, is a complex and time-consuming process.
Additionally, a major hindrance is the acute shortage of indigenous equipment. Over time, this has led to an overreliance on procurement of foreign equipment and spare parts. This has, in turn, resulted in extended timelines for deliveries and approvals, hampering project execution timelines.
Sector outlook
According to industry estimates, capital dredging is expected to be around 200-250 mcm annually, with a market value of Rs 100 billion-Rs 120 billion per year between 2024 and 2030. Moreover, maintenance dredging demand is projected to be approximately 100-150 mcm annually, with an estimated market value of Rs 50 billion-Rs 70 billion per year.
Significant investments under the Sagarmala programme and the development of new waterways are further stimulating market growth. Besides, the development of greenfield ports (such as Vadhvan, Galathea Bay, Tajpur, Nargol and Belekeri) and regional connectivity projects (such as Kaladan, Sundarbans, Pamban and Sethusamudram) offer a significant opportunity for dredging.
Dredging contracts across major ports are being bundled to ensure a larger contract value. Besides, the royalty-based PPP model is being leveraged to promote sustainable development and the waste-to-wealth concept, which involves the use of dredged material. Further, the use of smart hydrography is going to drive dredging efficiency.
Going forward, international collaborations and joint ventures will facilitate the development of sustainable maritime infrastructure in India.