With 415 identified projects, this programme will garner an investment worth `8 lakh crore.
Sagarmala, the flagship programme of the Ministry of Shipping, hinges on capacity expansion and modernisation of ports along India's coastline, enhancement of port connectivity to the hinterland, port-led industrialisation to promote trade, and sustainable development of coastal communities. Around 415 projects have been identified under this programme that are expected to mobilise investment of over Rs 8 lakh crore and generate about 1 crore new jobs, including 40 lakh direct jobs, over a period of 10 years. These projects are expected to increase port capacity to more than 3,000 mtpa by 2025 and generate annual logistics cost savings of close to Rs 35,000 crore.
Enhancement of port connectivity
The government has identified 26 port-rail connectivity projects under the National Perspective Plan (April 2016) at a total estimated Rs 29,500 crore. Sources reveal that preparation of a detailed project report (DPR) is underway for the heavy-haul rail corridor between Talcher and Paradip.
According to Ankit Patel, Assistant Vice President and Co-Head-Corporate Ratings, ICRA, all these projects have been awarded by the Indian Railways and are scheduled for completion over the next three years. 'Large construction players have benefitted from the addition in order flow arising out of these awards,'he says.
Considering that the maximum freight movement is through the road network, the Ministry of Road Transport and Highways and National Highways Authority of India have signed an MoU for the development of 79 port-road connectivity projects, including 10 freight-friendly expressways.
'We have already started implementing around 14 projects,'says a former official from the Ministry of Shipping, who recently shifted to the Department of Justice.
Several tenders have been awarded for construction and are currently in progress. 'In terms of new port projects, feasibility studies have been completed and DPRs are at various stages,'adds Patel. 'Upon approval of the DPRs, there should be fresh tenders for the award of these new projects over the next six to 12 months.'
Commenting on opportunities coming along the Sagarmala programme, Vinayak K Deshpande, Managing Director, Tata Projects, says, 'We have built construction capabilities for the same and are exploring possibilities.'As for the rail connectivity projects identified under the programme, he adds, 'We are definitely in talks for the rail connectivity related opportunities too, and given our expertise, we hope to garner a few projects in this area as well.'
Promoting coastal shipping
The Ministry of Shipping has formulated a revised central-sector scheme to provide financial support to major and non-major ports and state governments to create infrastructure for the movement of cargo and passengers by sea or national waterways. Under the scheme, projects for construction or upgrading of exclusive coastal berths for coastal cargo and berths or jetties for passenger ferries; mechanisation of coastal berths; capital dredging for operation of non-major ports; construction of breakwaters for existing and greenfield non-major ports; construction of berths or jetties in national waterways and islands by state governments and union territories; and construction of platforms and jetties for hovercrafts and seaplanes will be considered for assistance.
The Ministry of Shipping has taken up projects worth Rs 2,302 crore for financial assistance under the coastal berth scheme. The projects under this scheme are distributed over eight states with the highest number of projects in Maharashtra with
12 projects, followed by 10 in Andhra Pradesh and Goa, six in Karnataka, three in Kerala and Tamil Nadu, two in Gujarat and one in West Bengal. Of the 47 projects, 23 worth Rs 1,075.61 crore have been sanctioned for total financial assistance of Rs 390.42 crore and Rs 230.01 crore has been released to major ports, state maritime boards and state governments. The remaining 24 projects are under various stages of development and process of approval.
The most recent beneficiaries of the scheme were JNPT and the Karnataka government respectively for developing coastal infrastructure at JNPT, Karwar Port and Old Mangalore Port. Around Rs 25 crore was sanctioned for the construction of coastal berth (270 m + 30 m) at JNPT. Meanwhile, Rs 114.4 crore was sanctioned to the Karnataka government for extension of the existing southern breakwater by 145 m, construction of a new north breakwater of 1,160 m, construction of coastal berths at Karwar port and construction of coastal berth and capital dredging at Old Mangalore Port.
Port of opportunities
With EXIM trade witnessing unprecedented growth, accounting for 90 per cent of EXIM volumes and 72 per cent by value, clogged port infrastructure (congestion, connectivity, shallow draft, etc) could slow down overall growth. Hence, a æroute' canal treatment is needed!
Here, MT Krishna Babu, Chairman, Port of Visakhapatnam, divulges his investment plan worth Rs 7,000 crore: deepening of channels and berths, development of new berths, modernisation and mechanisation of existing berths and improvements in connectivity and other logistics such as multi-model logistic parks. With this, the port is expected to augment capacity by 58 million tonne, of which four projects with an investment of Rs 937 crore and capacity of 20.52 mtpa are complete.
Meanwhile, Mumbai Port Trust is undertaking projects ranging from cruise tourism, lighthouse tourism and a fish harbour to port connectivity and capacity augmentation worth Rs 4,764 crore. Sanjay Bhatia, Chairman, Mumbai Port Trust, is focusing on cruise tourism -the plan envisages Mumbai as the home port for Costaneo Classica, a cruise ship. The port is also constructing a fifth oil berth with an investment of Rs 811 crore and has already created 6 lakh man-days of employment. Further, a floating storage and regasification unit (FSRU) worth Rs 2,690 crore is awaiting approval from the Cabinet Committee on Economic Affairs (CCEA).
To improve rail-road connectivity, which would lead to improved aggregation and evacuation of cargo to and from the dock system, Kolkata Port Trust is undertaking several measures.
S Balaji Arunkumar, Deputy Chairman, Kolkata Port Trust, says, 'The port is investing Rs 285 crore in projects, including a rail-over-bridge, second rail line from Durgachak to Haldia Dock railway system, upgrade of various tracks at EJC yard at Kolkata Dock System, modernisation and upgradation of the existing railway network and improvement of road connectivity to facilitate trade and port users.'
Haldia Dock, an extended arm of Kolkata Port Trust, is also leaving no stone unturned with plans worth Rs 6,900 crore under Sagarmala. These include a Rs 5,900-crore, port-linked industrialisation and coastal community development project and Rs 624 crore of assorted projects that will stimulate the economy and create employment within the sector. G Senthilvel, Deputy Chairman, Haldia Dock, cites two examples wherein one project has already generated employment for about 570 people for operation and maintenance of shore-handling equipment and the second has increased the capacity of the Haldia Dock Complex by obviating draft constraint. This project of transloading facilities has helped meet the growing demand of hinterland industries that indirectly fulfil the demand of West Bengal and the neighbouring states.
The implementation of the Sagarmala project does face its share of funding, regulatory, social and environmental challenges. 'Funding is definitely one of
the primary challenges as the large-scale plans require significant investments (Rs 5 lakh crore),'says Patel. While the government can contribute to some extent, if investment has to come in within the targeted timeframe, significant PPP involvement will be required.
Also, regulatory challenges in the port sector with respect to tariff determination, project award process, cabotage law relaxation, revision in the Model Concession Agreement (MCA) and enactment of the Major Ports Authority bill (2016) are at various stages of reform or implementation. Their timely resolution remains critical to boost private investment in the sector.
Further, various new port projects or expansion projects are facing social and environmental challenges given that they will involve huge construction activity that may disturb human and marine ecology. For example, Enayam Port's viability is a concern as it will lead to the displacement of a thickly populated coastal district. Vizhinjam Port is being opposed by the fishing community in Thiruvananthapuram district. And the expansion of Kamrajar Port in Tamil Nadu has already been opposed by the local community.
'Government intervention will be required to ensure that these issues are resolved in a timely manner so that the progress of execution does not get affected,'concludes Patel. Indeed.
- Shriyal sethumadHavan & Rahul kamat(With additional inputs from the CW team)
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