The Sagarmalaprogramme was launched by the Ministry of Shipping (MoS) in July 2015. Progress has been more visible under its port modernisation component than in other areas. However, since the launch of the programme, about 24 per cent of the port modernisation projects are still at the feasibility or preliminary/planning stages.
Background and scope
The Sagarmalaprogramme was launched to harness the potential of the country’s 7,500 km long coastline, 14,500 km of conceivably navigable waterways and strategic location on key international maritime trade routes. The prime objective of the programme is to promote port-led direct and indirect development and to provide infrastructure for transporting goods to and from ports quickly, efficiently and cost effectively. The four pillars of the programme are port modernisation and new port development, port connectivity enhancement, port-led industrialisation, and coastal community development.
As of January 20, 2020, Sagarmala has 513 projects entailing an investment of about Rs 4,477 billion under its ambit. Of the total investment, 49.55 per cent is envisaged for port connectivity, 31.64 per cent for port-led industri-alisation, 17.63 per cent for port modernisation and development of new ports and 1.18 per cent for coastal community development.
With respect to project funding, the central and state governments are expected to provide three-fourths of the total funds. In addition, new sources of financing such as dollar-denominated loans are being explored to meet the huge requirement.
Progress under the port modernisation component
According to traffic studies carried out under Sagarmala, cargo traffic at Indian ports is expected to increase to 2,500 million tonnes per annum (mtpa) by 2025. To cater to the increasing traffic, a roadmap has been drawn up for increasing capacity at ports from 1,500 mtpa to more than 2,500 mtpa by 2025. The roadmap includes operational efficiency improvement at ports, capacity expansion of existing ports and development of new ports.
For increasing operational efficiency, Project Unnati, a study to benchmark the performance of the major ports to comparable international ports, was undertaken, the recommendations of which are being implemented. A total of 116 initiatives were identified across major ports to unlock more than 100 mtpa of capacity through just efficiency improvements. As of February 29, 2020, 95 initiatives had been completed to unlock over 80 mtpa of capacity. Besides, six initiatives are under implementation and the remaining 15 initiatives have been dropped. The maximum number of initiatives were identified for implementation at the country’s biggest container handling major port, the Jawaharlal Nehru Port Trust (JNPT). So far, 16 of the 17 initiatives identified at JNPT stand completed.
As of January 20, 2020, 208 projects worth over Rs 789 billion are at various stages of development under the port modernisation and new port development component of Sagarmala. Of the total 208 projects, around 38 per cent have been completed, while 30 per cent are currently under implementation. Besides, the remaining 32 per cent of the projects are currently in the pipeline – in the planning, detailed project report (DPR) preparation and bidding stages. These projects entail a total investment of around Rs 303.57 billion.
Private participation has also been invited for the modernisation and mechanisation of port facilities and digitalisation of operations, besides the development of berths, container terminals and new ports. Of the total projects in the pipeline, 16 projects worth Rs 145.77 billion are being implemented on a public-private partnership (PPP) basis. These projects are expected to add more than 197 mtpa of capacity. In addition, seven projects worth over Rs 244 billion have been planned to be developed on a PPP basis.
The MoS, in coordination with the port authorities, has also implemented a number of modernisation and mechanisation projects, besides implementing ease of doing business initiatives. As a part of its ease of doing business initiatives, radio frequency identification (RFID)-based gate automation systems were installed at the ports of Cochin, Kamarajar, Haldia, New Mangalore, V.O. Chidambaranar and Visakhapatnam. The RFID systems have been deployed with the intent of eliminating dual checking of containers and minimising transactions at the gate and thereby reducing dwell time and easing congestion.
In order to obviate the need for manual examination of individual containers, huge container scanners have been installed at the major ports. Recently, these scanners have been installed at the ports of Cochin, Kamarajar, Visakhapatnam, New Mangalore and Paradip. Meanwhile, Kamarajar Port Limited and the New Mangalore Port Trust have deployed mobile X-ray container scanners at their respective ports. Apart from adding to the security level, these scanners have the advantage of being quickly deployable at different locations and improving the overall scanning rate at ports. Besides, ports have also deployed mechanised gantry cranes to increase the efficiency of loading/unloading of containers.
Opportunities offered and outlook
With a robust pipeline of port modernisation projects, opportunities exist for all the stakeholders across the maritime chain. According to India Infrastructure Research, 66 projects being implemented under the port modernisation component of Sagarmala are in the pipeline (DPR preparation, DPR prepared and under tendering). These projects are expected to entail an investment of Rs 303.56 billion, offering significant opportunities for technology and equipment providers.
The emerging trend of replacing old equipment, and deploying efficient equipment and port automation systems has created significant demand for new specialised equipment. The major ports are undertaking projects involving mechanisation and modernisation to increase their efficiency and productivity. In addition, the private ports have also been demanding the latest equipment to not only achieve efficiency in their operations but also to outpace government-owned ports. Other than the existing ports, the upcoming greenfield ports also offer ample opportunities to technology providers as these ports are being developed to match global standards.
Going forward, the sector offers huge opportunities for modernisation, mechanisation and digitalisation. Ports are also looking at developing high capacity berths equipped with modern, state-of-the-art equipment with skilled and trained manpower to handle the sophisticated equipment. The increasing level of modernisation and mechanisation is surely expected to increase efficiency levels at ports, including cargo handling efficiency, in the coming times.