In­dus­trial Growth and In­fra­struc­ture Ecosys­tem

The 2nd An­nual Smart Lo­gis­tics Sum­mit 2018-Bhubaneswar shared an in­sight on how cargo moves be­tween hin­ter­land and ports in the state of Odisha. The sum­mit was an ef­fort to high­light the lo­gis­tics bot­tle­necks in the re­gion and ex­plore how ser­vice provider

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The 2nd An­nual Smart Lo­gis­tics Sum­mit 2018-Bhubaneswar shared an in­sight on how cargo moves be­tween hin­ter­land and ports in the state of Odisha. The sum­mit was an ef­fort to high­light the lo­gis­tics bot­tle­necks in the re­gion and ex­plore how ser­vice providers could of­fer bet­ter so­lu­tions to fa­cil­i­tate busi­ness growth.

The sec­ond edi­tion of SLS Bhubaneswar found trac­tion among some of the tallest in­dus­trial lead­ers from Odisha, and stal­warts from port, ship­ping and lo­gis­tics sec­tor. The busi­ness lead­ers joined to­gether to dis­cuss lo­gis­tics sce­nario in the re­gion, and in a dy­namic trade en­vi­ron­ment how lo­gis­tics can play a de­ci­sive role to achieve man­u­fac­tur­ing and busi­ness ef­fi­ciency.

The sum­mit started with the wel­come and keynote ad­dress by R. Ram­prasad, Edi­tor-in-chief, Mar­itime Gate­way, fol­lowed by fa­cil­i­ta­tion of Guest of Honor San­jeev G. De­walkar, IRS, Com­mis­sioner, Cus­toms, GST, Ser­vice Tax and Au­dit, Bhubaneswar Zone.

"Odisha can be the nu­mero uno state in terms of un­tapped pos­si­bil­ity," re­marked San­tosh Ku­mar Mo­ha­p­a­tra, IAS(RETD), mod­er­a­tor of the ses­sion. At the time of ini­ti­at­ing the Dhamra Port project in 2005, we could fore­see Odisha with a very promis­ing fu­ture and over a pe­riod of time the re­gion has lived upto the ex­pec­ta­tion. Odisha growth story is not yet over and it is yet to reach its peak. Steel and power are con­sid­ered as the core in­dus­tries in any coun­try, and Odisha has the largest base of these in­dus­tries in In­dia. About 1/3 of coun­try’s iron ore, a quar­ter of coal re­bulk sources, 50 per cent of baux­ite re­serve, and 90 per cent of nickel and chromite re­serves are present in Odisha. While neigh­bor­ing states too have min­eral re­sources but Odisha has the strate­gic ad­van­tage of a seafront, and it is this com­bi­na­tion that an in­vestor would look for in a re­gion.

Mukesh Oza, Group Pres­i­dent & CEO, Sam­sara Group: Sam­sara has been op­er­at­ing from Paradip Port for sev­eral years han­dling bulk and break cargo but with the new con­tainer ter­mi­nal been set up at the port, it is the right time to start serv­ing con­tainer trade from the re­gion as well. Like China prop­a­gates One Belt and One Road Ini­tia­tive, it is time for the in­vestors in Odisha to join hands for Odisha Cargo for Odisha Ports ini­tia­tive. Over­all growth of the re­gion, port and a re­gion’s econ­omy will take place when all stake­hold­ers are in sync with each other. Odisha is ex­pected to

pro­duce about 100 mil­lion tonnes of steel, and it will re­quire for daily ves­sel calls out of Paradip Port to serve the de­mand.

Capt BVJK Sharma, Joint MD & CEO, JSW In­fra­struc­ture: A cargo traf­fic growth is no­ticed in the re­gion lead by Paradip Port, but still it is look­ing at a growth of about 15 per cent in the com­ing 5 years. Soon JSW is plan­ning to start iron ore ter­mi­nal of 18 mil­lion tonne at the port which can cater to cape ves­sels. JSW is also en­ti­tled with the project of mech­a­ni­sa­tion of a coal han­dling berth which can cater to cape ves­sels. JSW is look­ing at creat­ing 50 mil­lion tonne ca­pac­ity at Paradip Port and the group has also got ap­proval to set up a steel pro­duc­tion unit nearby which will con­trib­ute 20 mil­lion tonne of traf­fic. The com­pany aims to cre­ate 100 mil­lion tonne ca­pac­ity on the east coast. The only con­cern is con­nec­tiv­ity, es­pe­cially the Hari­daspur-paradip rail project has taken too long to com­plete and the fresh tar­get for the project com­ple­tion is June 2019, and com­ple­tion of this project will help faster evac­u­a­tion of iron ore and other cargo. A cord line which will pro­vide last mile con­nec­tiv­ity to Paradip Port to tap coal from the mines of MCL is an­other im­por­tant link­age. While fund has been al­lo­cated for the project but de­lay in land ac­qui­si­tion on part of the state gov­ern­ment has de­layed the project. JSW is also look­ing into wagon in­vest­ment schemes for iron ore and coal rakes. The Sa­gar­mala of­fers lot of op­por­tu­nity, and one ex­am­ple is NTPC can save `900 crore on lo­gis­tics cost an­nu­ally, if it moves coal from MCL mines through Paradip Port-jaigarh Port to its power plant in Ma­ha­rash­tra as com­pared to rail move­ment. JSW is in­vest­ing about `4,000 crore in ports in Odisha and about `20,000 in the steel plant in the state, and the group looks for a steady growth of the re­gion.

Arun Misra, VP (Project Gopalpur), and MD, Tata Steel SEZ: The lo­ca­tion of Tata steel plants in Jamshed­pur was de­cided keep­ing in mind the prox­im­ity to the mines and wa­ter re­sources, but later there was a re­al­i­sa­tion that in mod­ern times it is ideal to set up a steel plant close to ports. If the man­u­fac­tur­ing units move closer to the ports, the means of freight move­ment by road or rail be­comes ir­rel­e­vant. As per cur­rent trend, more and more man­u­fac­tur­ing zones will be lo­cated around the ports and the port op­er­a­tors would be less de­pen­dent on the hin­ter­land. China is an ex­am­ple, which dur­ing the Bei­jing Olympics re­lo­cated its steel plants closer to ports to bring down lo­gis­tics cost. Con­sid­er­ing these as­pects, Tata Steel SEZ is a per­fectly placed lo­ca­tion for man­u­fac­tur­ing ac­tiv­ity closer to Gopalpur port. Though ini­tially Tata Steel plant was planned near Gopalpur way back in 1996 but due to lack of fresh wa­ter and high cost of de­sali­na­tion dur­ing those times the plant idea was shelved. Fol­low­ing which the steel unit was set up in Kalin­gana­gar. Tata Steel SEZ at Gopalpur is multi-prod­uct eco­nomic zone and the project is poised for en­vi­ron­men­tal clear­ance upto red cat­e­gory which will al­low lo­ca­tion of haz­ardous in­dus­tries there. The SEZ is well con­nected by rail, road and port. There is monopoly in tar­iff of­fered by road and rail, and the lo­gis­tics com­pa­nies feel that they shouldn’t be paid as per the value they add rather as per the value of the cargo they carry. These is­sues, in­clud­ing the trans­port union re­lated chal­lenges have been raised by in­dus­trial as­so­ci­a­tions on var­i­ous fo­rums. Even in Gopalpur, fer­rochrome move­ment by con­tainer is shipped through Visakha­p­at­nam due to lack of con­tainer han­dling fa­cil­ity at Gopalpur. In­dus­tries in the re­gion are ex­posed to the mo­nop­o­lis­tic ser­vice by lo­gis­tics play­ers in the name of trans­port union. These is­sues need to be sorted out and as in­dus­tries shift near to the port, they will be trusted sup­pli­ers of cargo to the port.

Dhruv K. Ko­tak, Joint MD, J M Baxi Group: There has been an im­pres­sion in the re­gion that lo­gis­tics com­pa­nies are op­por­tunis­tic but soon the im­age would change. A ma­jor mile­stone is the progress in dig­i­tal­i­sa­tion, es­pe­cially in the port sec­tor. With the ini­tia­tive by the gov­ern­ment there will be a com­pre­hen­sive Port Com­mu­nity Sys­tem in place within the next 6 months. It will of­fer sin­gle win­dow so­lu­tion for all doc­u­ment ex­change. It will al­low the man­u­fac­tur­ers, ship­pers as well as the ser­vice providers to carry out doc­u­men­ta­tion on the go. JM Baxi led Por­tall is in the fore­front of de­vel­op­ing this tech­nol­ogy for the In­dian gov­ern­ment. PICT will play the role of a con­tainer ter­mi­nal as well as a clean cargo han­dling fa­cil­ity. Com­ing to the is­sue of trans­port unions, the big­ger eco-sys­tem will take some time to be de­vel­oped in the state to make things fall into places. Even due to the is­sues with road trans­port union, there is also op­por­tu­nity for pri­vate rail op­er­a­tors to serve short dis­tance cargo. The re­lax­ation of cab­o­tage will have huge im­pact on con­tainer trade, be­cause places like Kolkata, Chen­nai and Chit­tagong have sur­plus of empty 20” in­ven­tory which can be de­liv­ered at Paradip in­stead of Sin­ga­pore or Colombo which will en­able cre­ation of a sup­ply chain for ma­jor ex­porters in the re­gion.

L to R: Mukesh Oza, Group Pres­i­dent & CEO, Sam­sara Group; San­tosh Ku­mar Mo­ha­p­a­tra, IAS(RETD); Capt BVJK Sharma, Joint MD & CEO, JSW In­fra­struc­ture; Arun Misra, VP (Project Gopalpur), and MD, Tata Steel SEZ; Dhruv K. Ko­tak, Joint MD, J M Baxi Group

Rapt au­di­ence in a ses­sion

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