India is the 20th largest maritime country in the world. The potential of the maritime trade in India is huge considering the country having the coastline which is over 7800-km. The maritime infrastructure is not in place and acting as a big deterrent for the interested ones to setup business in India. The maritime sector in India comprises of ports, shipping, shipbuilding and ship repair as well as inland water transport systems. Building maritime infrastructure needs to be considered as one of the top priority to explore the immense potential of maritime trade. Sandeep Sharma takes a look at the Maritime Transport segment….
FACTS AND FIGURES
About 90% of the country’s trade by volume and 70% by value is moved through maritime transport. With India’s current share in global merchandise trade at around 0.80%, building a sound maritime infrastructure could play a dominant role in pacing up our economic development.
EXPORTS (including re-exports)
Exports in December 2018 were US $ 27.93 Billion, as compared to US $ 27.83 Billion in December 2017, exhibiting a positive growth of 0.34per cent. In Rupee terms, exports were Rs. 1,97,535.86 Crore in December 2018, as compared to Rs. 1,78,802.77 Crore in December 2017, registering a positive growth of 10.48 per cent. The cumulative value of exports for the period April-December 2018-19 was US $ 245.44 Billion (Rs.17,11,905.60 Crore) as against US $ 222.77 Billion (Rs.14,36,614.25 Crore) during the period April-December 2017-18, registering a positive growth of 10.18 per cent in Dollar terms (19.16 per cent in Rupee terms). Non-petroleum and Non Gems and Jewellery exports in December 2018 were US $ 21.11 Billion, as compared to US $ 20.88 Billion in December 2017, exhibiting a positive growth of 1.08 per cent. Non-petroleum and Non Gems and Jewellery exports in April-December 2018-19 were US $ 177.66 Billion, as compared to US $ 164.66 Billion for the corresponding period in 2017-18, an increase of 7.90 per cent.
Imports in December 2018 were US $ 41.01 Billion (Rs. 2,90,032.95 Crore), which was 2.44 percent lower in Dollar terms and 7.41 per cent higher in Rupee terms over imports of US $ 42.03 Billion (Rs.2,70,015.44Crore) in December 2017. Cumulative value of imports for the period April-December 2018-19 was US $ 386.65 Billion (Rs.26,97,306.82 Crore), as against US $ 343.34 Billion (Rs.22,14,370.92 Crore) during the period April-December 2017-18, registering a positive growth of 12.61 per cent in Dollar terms (21.81 per cent in Rupee terms).
YEAR 2018 REVIEW
The year 2018 has been a significant one for the Ministry of Shipping, Government of India. Bolstered by progressive policy interventions like amendment of Model Concession Agreement, revision of tariff guidelines and the various steps taken towards facilitating Ease of Doing Business, the major ports kept up their impressive performance of the past four years in terms of capacity addition and improvement of efficiency parameters. The Sagarmala Programme saw the completion of 89 projects, while 443 projects worth Rs. 4.32 lakh crore are under various stages of implementation and development.
Inland water transport sector received a push with the inauguration of the multi modal terminal on River Ganga at Varanasi resulting in the movement of container cargo from Kolkata to Varanasi on the river. The integrated movement of cargo commenced from Kahalgaon in Bihar to Pandu in Assam over three waterways – Ganga, Brahmaputra and the Indo Bangladesh Protocol Route.
The modernized international cruise terminal was inaugurated at Chennai Port and Mumbai-Goa cruise service was launched.
The Centre of Excellence in Maritime & Shipbuilding (CEMS) was set up at Vizag and Mumbai, National Technology Centre for Ports, Waterways and Coasts (NTCPWC), at IIT Madras in Chennai and the decision to set up Multi-skill Development Centers (MSDC) at all major ports under Sagarmala.
The Ports in India handle 90% by volume and 70% by value of India’s external trade. In order to meet the ever increasing trade requirements of the country, the focus has been on the infrastructure development and capacity enhancement of the Ports. Over the years the cargo handling capacity of the major ports has been growing steadily as under:
YearCapacity (in MTPA)
*Re-rated – Ports capacity re-rated based on Berthing Policy as per International norms.
Traffic handled at the major ports has also been increasing as shown in the Table below:
YearTraffic (in MT)
2018-19 (upto October, 2018)403.39
Some of the port projects are listed below:
The Andaman Lakshadweep Harbour Works (ALHW) is implementing the following projects: 1) The restoration of damaged Breakwater at Hut Bay - Placing of CC block of size 1m x1m x1m and 8T Tetrapods from 800m to 1200 m chain age at Sea side of Breakwater at Hut Bay in Little Andaman at an estimated cost of Rs. 14.66 crore and it will be completed by August, 2019. 2) The restoration of damaged breakwater at Kalpeni Island in Lakshadweep at an estimated cost of Rs. 34.56 crore and the project would be completed by June, 2020. 3) The construction of Seawall /Shore protection work at Mus in Car Nicobar in Andaman & Nicobar Islands at an estimated cost of Rs. 49.19 crore. The project would be completed by Dec, 2020.
JNPT has increased its cargo handling capacity from 6000 TEUs to 12,500 TEUs as a result of the deepening and widening of the existing channel from 14 mt to 15 mt draft. Nearly 114 projects will be undertaken by JNPT at a cost of Rs 2.35 trillion as part of the Sagarmala project entailing investment of Rs 16 trillion.
DRY DOCK AT COCHIN
Cochin Shipyard Ltd is setting up India’s largest dry dock. The foundation stone was laid on 30.10.2018 for the project costing Rs 1,799 cr.
DEENDAYAL PORT PROJECT
Deendayal Port formerly known as Kandla Port, is a seaport in the Kutch District of Gujarat. The port plans to have an exclusive, mechanized facility at berth number 14 for handling fertilizer cargo. Initially the proposed facility will handle 2.60 MMTPA. The project completion is targeted by October, 2020.
COMMERCIAL PORT AT KONA
Kakinada Gateway Port Ltd (KGPL), the subsidiary of Kakinada SEZ Ltd (KSEZ), has signed the Concession Agreement with the GoAP for development of a greenfield commercial port on Design, Build, Finance, Operate and Transfer (DBFOT) basis in Kona Village, East Godavari District, Andhra Pradesh. The work is likely to start by October, 2019.
TAJPUR DEEP SEA PORT
Kolkata Port Trust (KoPT) plans to develop the Tajpur deep sea port. Bhor Sagar Port Ltd is the SPV created to execute the project. Bhor Sagar Port is a 74:26 percent joint venture between KoPT and state government. The detailed project report will be ready in another 10 months. The Techno-Economic Feasibility Report draft was recently submitted.
RAMAYAPATNAM PORT PROJECT
The Government of Andhra Pradesh has decided to undertake the construction of Ramayapatnam port which is the world's largest breakwater project. The investment estimated is to the tune of Rs 5,000 crore. The port is likely to commence operation by 2023. Around 3500 acre of land is allotted for the project.
DEVELOPMENT OF NEW PORTS
Six new port locations namely – Vadhavan (Maharashtra), Enayam (Tamil Nadu), Tajpur (West Bengal), Paradip Outer Harbour (Odisha), Sirkazhi (Tamil Nadu), Belekeri (Karnataka) have been identified to increase overall cargo handling capacity.
The Model Concession Agreement has been amended with a view to obviate the problems being faced in execution of PPP Projects on account of certain provisions of the present MCA, in order to enhance confidence of investors and make the investments in the Port Sector attractive.
The tariff guidelines were revised to provide flexibility to port operators to align the tariff closer to market tariff subject to achievement of certain performance standards.
100% FDI is being allowed in PPP Projects in the Port Sector. A new Major Ports Authorities Bill to replace existing Major Port Trusts Act 1963 to provide greater autonomy and modernization of institutional structure is under consideration and has been introduced in the Lok Sabha on 16.12.2016. This is awaiting consideration and passing by the Lok Sabha.
Revised guidelines have been issued to all the Major Ports for moving away from the practice of parking their surplus funds solely in the Public Sector Banks and investing their pension /provident/gratuity fund and surplus funds in accordance with guidelines of Ministry of Labour and Employment and Department of Public Enterprises,
NATIONAL MARITIME DEVELOPMENT PROGRAMME (NMDP)
The objective of the programme is to facilitate focused and accelerated investment in specific infrastructure including port infrastructure, tonnage acquisition and institutional capacity building. It envisages a total investment of Rs. 100,339 crores out of which Rs. 55,804 crores is for major ports and the rest for shipping and inland water transport sectors. The programme comprises a total of 387 projects which cover the entire gamut of activities in ports, merchant shipping and inland water transport.
The programme aims at:-
India has 12 major ports and approximately 200 non-major ports administered by Central and State Governments respectively. More than 605 projects having a total cost of Rs. 8.8 lakh crore(cr.) have been identified under Sagarmala. Of these, 89 projects worth Rs. 0.14 lakh crore are completed and 443 projects worth Rs. 4.32 lakh crore are under various stages of implementation and development. Sagarmala Programme aims to promote port-led development with a view to reducing logistics cost for EXIM and domestic trade.
As per the studies conducted under the Sagarmala Programme, it is expected that by 2025, cargo traffic at Indian ports will be approximately 2500 MMTPA while the current cargo handling capacity of Indian ports is only 1500 MMTPA. A roadmap has been prepared for increasing the Indian port capacity to 3500+ MMTPA by 2025 to cater to the growing traffic. This includes port operational efficiency improvement, capacity expansion of existing ports and new port development. Towards this end, 249 port modernization projects have been identified. Out of these, 107 port capacity expansion projects (cost: Rs. 67,962 cr) were identified from the port master plans of 12 major ports and are expected to add 794 MMTPA to the major port capacity over the next 20 years.
To promote trade, ease of doing business and Coastal Shipping in India as per the stated objectives of the Sagarmala Programme, relaxation under Section 406 and 407 of the Merchant Shipping Act 1958 with respect to cabotage was notified with respect to fertilizers, agricultural products, fisheries, horticultural and animal produce commodities, and containers. Based on feedback of industry on this relaxation, a clarification was further issued in September 2018 that the minimum movement of fertilizer to the extent of 50% of the total cargo onboard a ship is applicable only for cargo loaded at any Indian port for coastal movement .
To boost domestic shipbuilding activities in the country, the Government of India has declared an ongoing Rs. 4000 cr Ship building Financial Assistance Policy for 10 years (2016-2026). Under this policy, financial assistance is granted to Indian Shipyards equal to 20% of lower of ‘Contract Price” or the “Fair Price” or actual receipt of each vessel built by them. The rate of financial assistance will be reduced by 3% after every three years.
MULTI-SKILL DEVELOPMENT CENTRES FOR MARITIME LOGISTICS
Under Sagarmala program, the development of Multi-skill Development Centers (MSDC) at all major ports is being taken up with the objective to achieve the vision of 100% skilled manpower at ports and fulfill skill requirements of the employers in the Port and Maritime sector,
COASTAL BERTH SCHEME
The Coastal Berth Scheme aims towards the creation of infrastructure to promote movement of cargo/passengers by sea/National waterways. The scheme has been extended upto March 2020 and its scope now includes the cost of preparation of DPR and capital dredging at Major Ports. Forty one projects worth Rs 1,535 cr have been sanctioned under the Coastal Berth Scheme for financial assistance of Rs. 633 cr out of which Rs. 334 cr has been released to Major Ports/State Maritime Boards/State Governments.
INLAND WATER TRANSPORT
JAL MARG VIKAS PROJECT
The Cabinet Committee on Economic Affairs (CCEA) approved the implementation of the Jal Marg Vikas Project (JMVP) on 03.01.2018 at an estimated cost of Rs. 5,369 crore with technical and financial assistance of the World Bank. The objective of JMVP is to improve navigability of National Waterway-I (NW-1) for plying of vessels of up to 2000 Deadweight Tonnage (DWT). The major activities under the project are construction of multi-modal terminals, jetties, river information system, channel marking, navigational lock, river training and conservancy works. It is scheduled to be completed by March, 2023.The Loan Agreement and Project Agreement relating to IBRD loan of USD 375 million were signed on 02.02.2018. and these have become effective from 23.3. 2018. The status of implementation of different components of JMVP is given below:-
(a) Fairway Development
The work has commenced for providing least assured depth on the stretch between Farakka and Kahalgaon (146 kms) .Similarly, for the Sultanganj-Mahendrapur stretch (74 Kms) and Mahendrapur–Barh stretch (71 Kms) evaluation of tenders is in progress.
(b) Multi-modal Terminal, Varanasi
The multimodal terminal built at a cost of Rs 206 crore with a current capacity of 1.26 MTPA was inaugurated by the Hon’ble Prime Minister on 12.11.2018. It is the first multimodal terminal on river Ganga which is expected to generate 500 direct employment and 2000 indirect employment opportunities.
(c) Multi-modal Terminal, Sahibganj
The construction of the terminal was awarded at a cost of Rs. 280.90 crore and is scheduled to be completed in June, 2019. 54.81% work has been completed so far.
(d) Multi-modal Terminal, Haldia
Work for construction of the Terminal at a cost of Rs. 517.36 crore was awarded on 30.06.2017 and is scheduled to be completed in December, 2019. 22.43% work has been completed so far.
MOVEMENT OF CARGO ON NWS
IWAI has been making special efforts for promoting movement of cargo on National Waterways. In the first half of 2018-19, cargo traffic has increased to 33.8 MMT which is 102 % more as compared to 16.7 MMT in the same period in 2017-18.
PROCUREMENT OF RO-RO VESSELS
IWAI has signed an agreement with M/s. Cochin Shipyard Limited for construction and supply of 10 Ro-Ro/Ro-Pax vessels at a cost of Rs 110 cr. on 11.07.2018. The vessels will be delivered between June, 2019 to December, 2019 for deployment in NW-1, 2 and 3.
NEW RO-RO SERVICES
Ro-Ro services between Ibrahimpatnam and Lingayapalem on NW-4 have commenced thereby reducing road distance of approximately 70 km.
IWAI, in collaboration with Assam Government has launched a new RO-RO facility connecting Neamati-Majuli island in Assam on 12 Oct 2018 . The facility is being provided by IWAI vessel, Bhupen Hazarika having a capacity to carry 8 trucks and 100 passengers. The Ro-Ro facility traverses a distance of only 12.7 km on the river route which has cut down the circuitous road route of 423 km that trucks take from Neamati-Majuli Island via Tezpur Road Bridge.
DEVELOPMENT OF EIGHT NEW NWS
Mandovi (NW-68), Zuari (NW-111),Cumbarjua (NW-27), Barak (NW-16), Gandak (NW-37), Rupnarayan (NW-86), Alappuzha-Kottayam-Athirampuzha Canal (NW-9) and Sunderbans (NW-97), were considered for development during 2017-18.
FREIGHT VILLAGE AND LOGISTIC HUB AT VARANASI
To improve logistics efficiency, cargo aggregation, warehousing facilities and multimodal transportation, a Freight Village and Logistic Hub is proposed at Varanasi to be set up in continuation of the multi-modal terminal as part of the JMVP. The proposal for undertaking the pre-investment activities relating to setting up of the Project at an estimated cost of Rs.165 crore was appraised by the Delegated Investment Board (DIB) and approved by the Competent Authority.
NEW NAVIGATIONAL LOCK, FARAKKA
The work was awarded on 24.11.2016 at a cost of Rs. 359.19 crore and is scheduled to be completed in April, 2019.
IWAI AND IOCL SIGNS MOU
Inland Waterways Authority of India (IWAI) and Indian Oil Corporation Limited (IOCL) has recently signed a Memorandum of Understanding (MoU) for jointly developing the required infrastructure for fuels, lubricating oil, LPG, Natural Gas and any other related fuel and gas for meeting the requirement of National Waterways.