AP's 10 new ports: Gateways for global cargo?
Realising the need for port-led development and with the availability of a long coastline, the Government of Andhra Pradesh has decided to build 10 new ports to boost the maritime sector. Experts discuss the various facets of this new government policy an
The Andhra Pradesh government has recently started to focus on augmenting economic growth by making use of its long coastline to attract cargo. The government announced its decision to develop 10 ports in the state, thus turning its 974 km coastline into a major port hub and a gateway to India for global cargo.
Boosting maritime cargo
The state has an infrastructure development plan to help achieve a traffic target of 2.5 Million TEUs by 2015 and 5.5 Million TEUs by 2019. Also the state is expecting 250 MMTA of bulk cargo by 2019 and 550 MMTA by 2025 and the new ports will ensure speedy development.
Evacuating the cargo
The state government is giving priority to the evacuation of cargo from the existing ports. G Sambasiva Rao, Managing Director, Sravan Shipping Services says, “The government’s basic aim is ports development and the connectivity of ports via roads and railway sidings and they are providing a sixlane connectivity to the existing ports. After the six-lane connectivity is established, there will not be any problem in the evacuation of cargo for shippers.”
The government is considering building supporting infrastructure for the evacuation of cargo from existing ports by planning to take up some key port related railway lines and roads projects. These are expected to enhance the evacuation capacity.
Revamping the capacity
While the three operational ports of Krishnapatnam, Gangavaram and Kakinada Deep Water Port have plans for the additional augmentation of more than 150 MTPA in the near future, Prabal Basu, Chairman & Managing Director, Balmer Lawrie & Co opines, “There is a need for the Andhra Pradesh Government to have a clearcut maritime policy. Further, the development of linking roads to the Vizag–Chennai Industrial Corridor is a must. At present, the container cargo is finding its way to the Chennai Port for several historical reasons as well as due to the high tax structure in the state of Andhra Pradesh. The state government needs to address these issues to incentivise the ports to revamp their facilities.”
Connectivity with the hinterland
Discussing the lack of connectivity between Andhra Pradesh and the hinterland, Basu explains, “At present, there appear to be major issues in respect of connectivity to the hinterland of Chhattisgarh and Odisha. There is an urgent need to improve the connectivity with the ports both via rail and road. Allied infrastructure like container freight stations (CFSs) and warehouses will then develop and throughput volumes through Andhra Pradesh ports will consequently increase.”
Need for 10 ports?
The building of the new ports will be taken up in a planned and phased manner taking into account the traffic potential, the existing port capacity and the evacuation of cargo from both new and existing ports. The improving connectivity and the creation of a proper logistics hub will make Andhra Pradesh ports the pre- ferred destination of trade in India. But Mihir Das, Promoter & Port Consultant, Portwerk Consultants warns, “The government’s ‘Look East’’ policy must take concrete shape for the proper message to be relayed to shipowners that these eastern ports are ready to do business efficiently. Only then can they mobilise their fleet and align marketing policies. Ports alone cannot succeed. Thus, a cautious approach is necessary.”
Risk of ports turning into stacking yards
Sceptics suggest that the idea of building new ports, if implemented hurriedly, will result in them being turned into mere stacking yards. However, Rao does not agree. He says, “There will be no disadvan- tages as it will increase competition amongst the ports, which will lead to efficiency in rail infrastructure and further development of the new ports as they will be vying with each other to attract cargo. With new ports, port-based industries can come up and the logistics cost can come down. Road congestion due to evacuation can also be avoided. ”
The growth of all the ports will depend on the growth of industries in Andhra Pradesh, else these ports will only remain underutilised. The decision of building new ports is being looked upon as a conscious effort to attract investments and improve the ease of doing business.
G Sambasiva Rao Managing Director Sravan Shipping Services
Prabal Basu Chairman & Managing Director Balmer Lawrie & Co
Mihir Das Promoter & Port Consultant Portwerk Consultants