An unfinished agenda
The port and shipping sector has witnessed significant growth during the last two decades, especially in terms of traffic handled. This has pushed port facilities to be utilised at maximum level leading to congestion. Though the Government of India, in association of private players, has taken a number of initiatives to build the required capacity, certain policy issues and low pace of implementation of a set agenda are dissuading big vessels from calling on Indian ports.
in 2012-13, the Government of India has awarded 32 port projects at an estimated cost of rs. 6765 crores to add capacity of about 136 million tonne per Annum (MTPA). This financial year also the government is targeting to award 30 projects to increase the capacity by 282 MTPA at an investment of around
25000 crore. It is pertinent to mention that approximately 95 per cent of the India’s trade by volume, and 70 per cent by value, is moved through maritime transport.
As a part of this overall effort, India’s busiest port JnPT has drawn up a plan to increase its capacity to handle projected container traffic of 10 million TEUs by 2016-17. The port has recently awarded the project to extend a container berth by 330 metres. JnPT has also re-invited the tender for the 4th Container Terminal which is designed to add 4.8 million TEUs capacity at an estimated cost of about 7000 crores. In the same manner, Mumbai Port Trust is also implementing capacity augmentation projects.
With 13 major ports and more than 180 minor ports, India’s 7, 517 km long coastline plays a vital role in maritime transport along with offering huge international trade capabilities. The current port scenario in the country offers a huge scope for expansion of international maritime transport; both for passengers and cargo handling. India’s 12 big ports, which account for about 58 per cent of the total cargo shipped through the country’s ports, handled 137 million tonnes (MT) of goods in the first quarter of FY14.
Container cargo volumes at these 12 ports stood at 1.87 million standard containers.
It is forecasted that by the end of 2017, port traffic will amount to 943.06 MT for India’s major ports and 815.20 MT for its minor ports. India plans to triple cargohandling capacity at its ports to 3.2 billion tonne by 2020 by investing private funds worth 3 trillion (US$ 50.56 billion).
To achieve the target, the Cabinet Committee on Economic Affairs (CCEA) has recently given its nod for setting up of new major ports in the states of West Bengal and Andhra Pradesh. The new major port at Sagar Island in West Bengal would be under Public Private Partnership (PPP) model.
“The government is aware of the issues facing the port and shipping sector, and we have taken initiatives to systematically identify and analyse the various issues, formulate appropriate solutions and take action to address the issues. In the port sector, we have directed our efforts to increase capacity and operational efficiency primarily through augmentation of capacity, mechanisation and improving the draft at the ports. The government has been encouraging private partners to invest in these efforts through the PPP model, which have been very successful,” said GK Vasan, Minister for Shipping, Government of India.
recently, the Shipping Ministry came out with new guidelines for determination of tariff for projects and major ports in the country. The new guidelines are aimed to pave way for increased investment flows into the port sector. The new norms also set out performance standards for port projects to improve accountability and ensure improved quality of service.
Under the new guidelines, the highest tariff for a commodity at a major port fixed under 2008 tariff guidelines, indexed to 60 per cent of WPI would become the reference Tariff on which the bidding would take place. The private operator under the new guidelines has the freedom to charge any amount up to a ceiling of 15 per cent over and above the applicable indexed reference Tariff for that financial year provided the operator has achieved the minimum performance standards as committed by him in the Concession Agreement.
GK Vasan, Union Cabinet Minister of Shipping, along with Milind Deora, Minister of State, Communications, IT and Shipping and other dignitaries is inaugurating the 25th Year Celebration of JnPT