We’re Look­ing to Usher In a ‘Blue Rev­o­lu­tion’ in 5 Years

There is im­mense po­ten­tial in ship­ping and ports in­dus­try, pos­si­bly even higher than roads

The Economic Times - - Economy & Companies -

Nitin Gad­kari is one of those rare politi­cians who love to talk in num­bers. The Union min­is­ter for road trans­port, high­ways and ship­ping bom­bards his lis­ten­ers with clus­ters of fig­ures, of­ten run­ning into bil­lions and crores, and as­serts that th­ese aren’t mere claims, and that he can be held re­spon­si­ble for ev­ery word he ut­ters sev­eral years down the line. In the just-ended Mar­itime In­dia Sum­mit, Gad­kari un­veiled the Sa­gar­mala Project which seeks to de­velop 7,500 kilo­me­ters of In­dia’s coast­line. He spoke of in­vest­ments po­ten­tially to­talling .₹ 12 lakh-crore on ports, al­lied in­fras­truc­ture and in­dus­trial clus­ters which, if im­ple­mented, would mean a mas­sive push for In­dia’s Exim trade. In the sum­mit it­self, MoUs and agree­ments worth .₹ 82,900 crore were signed. On the side­lines of the event, Gad­kari spoke to Anir­ban Chowd­hury on what trou­bles In­dia’s ship­ping sec­tor, and what the govern­ment is go­ing to do. Edited ex­cerpts...

The ship­ping and ports in­dus­try has been stag­nant for too long. We are fi­nally see­ing a lot of trac­tion in terms of pol­icy and projects an­nounce­ment. What’s your larger vi­sion? There is im­mense po­ten­tial in this seg­ment, and is pos­si­bly even higher than roads. What we are look­ing at is de­vel­op­ing a ‘Blue Econ­omy’, ush­er­ing in a ‘Blue Rev­o­lu­tion’. We have 1,300 is­lands and 280 light­houses. We are plan­ning to de­velop eight ma­jor ports, and work on three of them will start this year it­self. We are mak­ing dry ports. We are mak­ing as many as 27 in­dus­trial clus­ters. We en­vis­age an in­vest­ment of .₹ 4 lakh crore which also en­tails rail and road con­nec­tiv­ity with ports. Add to that would be .₹ 8 lakh crore on in­dus­trial clus­ters. So, the to­tal planned in­vest­ment in the next 10 years is of .₹ 12 lakh crore. In fact, we will try to fin­ish that in half the time — 5 years.

What do you think is the root of the prob­lem? Why hasn't ship­ping con­trib­uted as much as it should have to Exim trade? The big­gest prob­lem in our ex­ports is our lo­gis­tics cost. Our lo­gis­tics cost is 18% of the to­tal, while for China, it is just 8%. For Euro­pean coun­tries, the chunk is 10-12%. The rea­son is 47% of China’s goods is trans­ported through wa­ter. Ja­pan and Korea ship 43-44% of their goods through wa­ter. In our country, that per­cent­age was as low as 3.5% two years back. In our time, it has in­creased to 6%. Trans­porta­tion cost by road is cal­cu­lated on the ba­sis of .₹ 1.5, on rail at .₹ 1, and on wa­ter only 20 paise. If we cut the chunk of lo­gis­tics costs by 8 per­cent­age points and bring it down to even 10% of the to­tal (from 18%), our ex­port vol­umes will rise by one-and-a -half times. Rise in ex­ports will lead to growth of in­dus­trial sec­tor, cre­ation of jobs and rise in GDP.

In China, in­dus­tries are lo­cated at dis­tances of 150-200 kilo­me­ters from ports. Here the dis­tances range be­tween 700-800 kms. Our coast­line hasn’t been as in­dus­tri­alised yet as it should be. For ex­am­ple, cot­ton is pro­duced in Gu­jarat, it is shipped to the tex­tile mills of Ludhiana, brought back to Gu­jarat and ex­ported from Kandla Port. Sim­i­larly, cot­ton from Vi­darbha goes to Tirupur and gets pro­cessed there. The trans­porta­tion costs add sig­nif­i­cantly to lo­gis­tics costs and we are not able to com­pete glob­ally.

How has the Mar­itime In­dia Sum­mit been? We have seen con­sid­er­able in­ter­na­tional par­tic­i­pa­tion… That’s true. We have signed a co­op­er­a­tion agree­ment with South Korea. The country is con­sid­er­ably ad­vanced in this sec­tor — their ports, digi­tised sys­tems, mech­a­ni­sa­tion, turn­around time are ex­tremely de­vel­oped. For in­stance, we want to de­velop the LNG fuel seg­ment more and can get rel­e­vant tech­nol­ogy from the Kore­ans in this re­gard. Our agree­ment with Korea cov­ers all th­ese as­pects and also de­vel­op­ment of ports. A to­tal of 52 com­pa­nies have par­tic­i­pated in this sum­mit. There’s huge in­ter­est. We signed 27 mem­o­ran­dum of un­der­stand­ing (MoUs) on the first day. We will sign 131 more to­day.

What is the lat­est sta­tus on cab­o­tage rules? The govern­ment last month said all ports that trans-ship at least half of their to­tal con­tainer vol­umes would be en­ti­tled to ap­ply for cab­o­tage re­lax­ation. We have partly done away with cab­o­tage in the western re­gion and in some seg­ments. We will see how the ex­pe­ri­ence is and based on that we will ex­tend it to other seg­ments and across the country.

There has been sig­nif­i­cant progress in road­ways too. How does it go for­ward? Till now, I have signed road projects worth .₹ 1.5 lakh crore. By May 26 when we com­plete 2 years of gov­er­nance, I have tar­geted for that num­ber to reach .₹ 2 lakh crore. That will add to .₹ 60,000 crore of ship­ping and port projects. When we came into power, two kilo­me­ters of roads were be­ing built ev­ery day. We have in­creased that to 20 kilo­me­tres. I had tar­get­ted 30 kilo­me­ters, but should be able to reach 24-25 kilo­me­tres by May 26.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.