We have identified projects worth Rs.1.45 trillion

July 2019
We have identified projects worth Rs.1.45 trillion

In an exclusive interview, Kailash Agarwal, Joint Secretary, Ministry of Shipping, reveals that a roadmap has been created for increasing the Indian port capacity to 3,500+ MMTPA to more than cater to the projected traffic of 2,500 MMTPA by 2025.

What is your view on the present scenario of the port sector and its growth potential?
Ports have been and will remain the gateway for EXIM trade for India. EXIM trade is an important component of the Indian economy, thereby making it necessary for modern ports to meet international standards. As the outlook for growth of Indian economy is positive, trade is expected to continue to grow and provide a stable growth for the ports.

In addition, the Ministry of Shipping is providing policy and procedural push to coastal shipping. The traffic of coastal cargo is about 120 million tonne for FY19 and expected to grow to 220 million tonne by FY25. This will provide additional impetus to the port sector in India. The major ports are also developing cruise terminals to attract modern cruise lines and facilitate coastal tourism - both domestic and international, and increase passenger movement.

Innovation and adoption of technology, development of trans-shipment hubs in India, and growth of cruise tourism are the key drivers for the growth of the sector. Finally, port-led industrialisation is expected to provide long-term cargo growth to the ports under the port-led model adopted successfully by various maritime nations.

Tell us about the progress the government has made so far considering the four important elements of Sagarmala? What would be the total cost of these projects and completion timeline?
Approximately 600 projects have been identified so far under Sagarmala Programme requiring more than Rs 8.7 trillion of investment by 2035. The Sagarmala programme aims to double the share of domestic waterways (inland and coastal) in the modal mix, generate logistic cost savings of Rs 350û400 billion per annum, boost merchandise exports by USD 110 billion, and enable creation of one crore new jobs, including 40 lakh direct jobs by 2025.

Port Modernisation and New Port Development: A total of 262 projects (costing Rs 1.45 trillion) have been identified to enhance the port capacities and efficiencies of port operations. Out of these 262, 62 projects (worth Rs 168.70 billion) have already been completed and 69 (worth Rs 397.26 billion) are under implementation.

A roadmap has been created for increasing the Indian port capacity to 3,500+ MMTPA to more than cater to the projected traffic of 2,500 MMTPA by 2025. Out of 262 port modernisation projects, 109 port capacity expansion projects worth Rs 678.04 billion have been identified from the port master planning of 12 major ports for implementation over the next 20 years and are expected to add 785 MTPA to the major port capacity. Out of these 109 port master plan projects, 24 projects (worth Rs 153.81 billion) have been completed and 36 projects (worth Rs 145.24 billon) are under implementation. The 24 completed projects have already added 148 MTPA to the capacity of major ports.

Further, under Project Unnati, global benchmarks were adopted to improve the efficiency and productivity KPIs for 12 major ports. Around 116 initiatives were identified across 12 major ports to unlock more than 100 MTPA capacity just through efficiency improvement. Out of these, 91 initiatives have been implemented to unlock around 80 MTPA capacity.

Port Connectivity Enhancement: A total of 212 projects (worth Rs 2.49 trillion) have been identified to improve the connectivity to Indian ports. Out of these 212, 29 projects (costing Rs 52.69 billion) have already been completed and 63 projects (worth Rs 612.03 billion) are under implementation. In 2018-19, 15 port connectivity projects (worth Rs 3.07 billion) have added around 32 km length of road and 80 km length of rail.

In the year 2019-20, 20 port connectivity projects (worth Rs 188.25 billion) are likely to be completed and are expected to add around 1,358 km length of road and 514 km length of rail. By 2020, approximately 1,900 km of roads and 1,900 km of rails are expected to be commissioned to boost last-mile connectivity to ports. The programme aims to add 12,000 km of road and rail infrastructure by 2025.

Port-linked Industrialisation: A total of 57 projects (worth Rs 4.74 billion) have been identified for port-led industrialisation. Out of these, two projects (worth Rs 5.12 billion) have been completed and 17 projects (costing Rs 1.47 billion) are under implementation.

The vision of the Sagarmala Programme is to reduce logistics cost and time for the movement of EXIM and domestic cargo and development of port-proximate industrial capacities near the coast. In this regard, 35 potential port-linked industrial clusters in three sectors, namely, energy, materials, and discrete manufacturing have been identified. They include 12 bulk clusters for basic input industries such as power, refineries and petrochemicals, steel and cement, and 23 discrete manufacturing clusters, in the labour-intensive sectors of electronics, apparel, leather products, furniture, and food processing. The master plans for the proposed maritime clusters in Gujarat and Tamil Nadu have been prepared.

Further, development of a SEZ at JNPT (costing Rs 12,624 Cr), smart industrial port city (SIPC) projects at Paradip (costing Rs 3,350 Cr), and Kandla (costing Rs 11,147 Cr) are under implementation. Coastal employment units (CEUs) at VoCPT and KPL are under development.

Coastal Community Development: A total of 56 projects (worth Rs 65.87 billion) have been identified for coastal community development. Out of these 56 projects, 16 (worth to Rs 12.17 billion) have been completed and 18 (worth Rs 10.15 billion) are under implementation. In the year 2018-19, 14 projects (amounting Rs 10.94 billion) have been completed.

How do these four pillars of Sagarmala provide opportunities for private players?
Private participation is invited in the construction and development of projects. Activities ranging from DPR preparation and civil construction to BOT operations provide ample opportunities for the private sector, given the significant capital expenditure on projects, as elaborated earlier.

Major ports are now working largely on the principle of landlord model, where basic fixed infrastructure is provided by the ports and the reaming infrastructure as well as operation and maintenance are taken care of by private players.

Coastal employment zones, coastal employment units, smart industrial port cities, and other port-led industrialisation efforts envisage the creation of industrial areas which provide plug and play infrastructure for private players to set up new industries.

Under the coastal community development programme, training centres, operated by private players, are being developed. Expansion of skill development centres provides a good opportunity for private players.


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