UR­GENT NEED TO GROW AND MOD­ERN­IZE

In­dia's to­tal con­tainer­ized cargo ca­pac­ity of 8.75 mil­lion TEUs (twenty-foot equiv­a­lent units) at all its 11 ma­jor ports, a key in­dia or of a coun­try's in­te­gra­tion with global sup­ply chain for value-added man­u­fac­tured goods, is less than a quar­ter of cont

Assocham Bulletin - - INDUSTRY -

Te study ti­tled 'In­dian ports sec­tor: Chal­lenges of scale and ef­fi­cient op­er­a­tions,' was re­leased by Mr. D. S. Rawat, Sec­re­tary Gen­eral, ASSOCHAM along with chief ad­vi­sor, Dr. Arvind Ku­mar at a press meet held in Bhubaneswar.

High­light­ing the im­por­tance of port de­vel­op­ment, Mr Rawat said, "The Orissa High Court de­ci­sion to dis­pose of case per­tain­ing to set­ting up 13 non-ma­jor ports along its 480 kilo­me­tre long coast­line will fur­ther boost the prospect of port in­fras­truc­ture, bring in in­vest­ment, cre­ate thou­sands of jobs and also add to the rev­enues of the state ex­che­quer." Though In­dia's ports have met in rapidly ex­pand­ing traf­fic, han­dling more than a bil­lion tonne of cargo in 2016-17and the ca­pac­ity is ex­pected to in­crease to 2.5 bil­lion tonnes by 2025, the freight mainly com­prises POL (petrol, Oil, and Lubri­cant), coal, iron ore and other com­modi­ties.

It is only re­cently that freight in con­tain­ers, which are easy to load, un­load and can be car­ried to the hin­ter­land through mul­ti­modal trans­port, is catch­ing up in In­dia. Be­sides, it is the con­tainer­ized traf­fic which re­flects the level of manufacturing and value ad­di­tion a coun­try has achieved for it­self in the global mar­ket.

"To­tal con­tainer­ized cargo vol­ume for the whole of In­dia's ma­jor ports is­about8.5 mil­lion TEUs, which is less than a quar­ter of vol­ume han­dled by the largest con­tainer port in China, Shang­hai (36.5 mil­lion TEUs). China has four ports which han­dle more than 20 mil­lion TEUs, Shang­hai, Shen­zhen, Ningbo & Zhoushan and Hong Kong China."

Even on the pa­ram­e­ter of over­all­cargo, both with or with­out con­tainer­iza­tion, In­dia has a frag­mented ca­pac­ity at dif­fer­ent ports. In China, there are six­cargo ports which can han­dle over 500 mil­lion tonnes cargo per an­num and it has an­other eight ports which han­dle car­go­more than 100 mil­lion tonnes up to 500 mil­lion tonnes.

Com­ment­ing on the in­fras­truc­ture in In­dia, Mr. Rawat said, "The port scal­ing in China is not only ahead of us, but it over­awes even the ma­jor coun­tries. Of the world's top 20 ports, 14 are in China. No In­dian port fig­ures in the world's top 20."

In con­trast, In­dia has just two ports which han­dle be­yond 100 MT - Kandla and Mun­dra. Frag­men­ta­tion of port ca­pac­ity in In­dia is demon­strated by the fact that In­dia's 12ma­jor ports han­dle

Though In­dia's ports have met in rapidly ex­pand­ing traf­fic, han­dling more than a bil­lion tonne of cargo in 2016-17 and the ca­pac­ity is ex­pected to in­crease to 2.5 bil­lion tonnes by 2025

cargo far less than Shang­hai port. Large pro­duc­tiv­ity gains can be achieved by im­prov­ing ex­ist­ing ports at a much lower mar­ginal cost, the study noted.

The ASSOCHAM re­port said that use of con­tain­ers is im­per­a­tive to pro­mote multi mod al trans­porta­tion. Th­ese con­tain­ers can travel across all modes. "Con­tainer is a trans­port unit as well as a lo­gis­tic­sunit. Con­tain­ers save han­dling costs when freight must be trans­ferred from one mode to an­other (ex­am­ple- from ships to trucks or truck to rail); this calls for cost ef­fec­tive mod­els with ready in­fras­truc­ture."

The study also sug­gested that it would be ap­pro­pri­ate to aug­ment ca­pac­ity of ex­ist­ing ports to cre­ate ports with large ca­pac­ity of 100 mil­lion tonnes (MT) rather than cre­at­ing new ports and spread­ing re­sources thinly. Not­ing that for In­dia to re­main com­pet­i­tive glob­ally, in­vest­ment in port ca­pac­ity is a must, the re­port stated that in­dus­try needs to ad­dress how to iden­tify, fund, op­er­ate and make tar­geted in­fras­truc­ture im­prove­ments in key el­e­ments of mar­itime trans­porta­tion sys­tem. In­dia needs to spend more and bet­ter in mar­itime in­fras­truc­ture.

It also said that the pro­posed na­tional ports strat­egy should in­clude a clear ar­tic­u­la­tion of func­tion and hi­er­ar­chy of In­dia's ports within con­text of a na­tional sup­ply chain.

A key out­come of ports strat­egy should liein de­ter­min­ing a hi­er­ar­chy for In­dia's con­tainer and re­source ports which takes into ac­count fu­ture growth and po­ten­tial land­side bot­tle­necks which may im­pede growth," high­lighted the ASSOCHAM study.

It also rec­om­mended the need for In­dia to re­visit the Ma­jor Ports Trusts Act, 1963 with a view to mod­ernise the in­sti­tu­tional struc­ture of ma­jor ports and to se­cure greater op­er­a­tional free­dom for ports, in tune with present day re­quire­ments.

The study fur­ther said that a sin­gle-win­dow clear­ance is re­quired to pro­mote ease of do­ing busi­ness in the ports sec­tor. Pri­vate port op­er­a­tors are al­ready in­tro­duc­ing au­to­ma­tion and tech­no­log­i­cal ad­vance­ments, this should be com­ple­mented by im­prove­ment in cus­toms pro­ce­dures.

Mr. D. S. Rawat, Sec­re­tary Gen­eral, ASSOCHAM re­leas­ing the Study Pa­per along with Dr. Arvind Ku­mar, Chief Ad­vi­sor at the Press Con­fer­ence in Bhubaneswar.

Mr. D. S. Rawat, Sec­re­tary Gen­eral, ASSOCHAM ad­dress­ing the Press Con­fer­ence in Bhubaneswar.

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