In­dian ports grow 5.1% as coal vol­umes surge

Con­tin­u­ing with the mo­men­tum wit­nessed in H2FY2018, coal vol­umes have re­bounded largely on the back of im­proved de­mand and do­mes­tic coal sup­ply dis­rup­tions, re­sult­ing in healthy im­port re­quire­ments, as per ICRA sec­tor note.

Cargo Talk - - Contents - CT Bureau

The growth in cargo through­out the sec­ond half of FY2018 was strongly sup­ported by a jump of 19.9 per cent in coal vol­umes and 8.7 per cent in con­tainer vol­umes. Ex­cep­tions to vol­ume growth were iron ore and other cargo, which de­clined by 11.2 per cent and 4.3 per cent, re­spec­tively.

Ex­plain­ing fur­ther, K Ravichan­dran, Se­nior Vice Pres­i­dent and Group Head, ICRA, said, “The over­all weakness in coal cargo has been a cause of ma­jor con­cern for the ports sec­tor over the last two years. Over the long term, a sus­tain­able pick-up in in­dus­trial ac­tiv­ity and power de­mand will be cru­cial for the sus­te­nance of healthy coal im­ports as do­mes­tic pro­duc­tion also ramps up to meet the in­cre­men­tal de­mand. Con­tainer vol­umes con­tinue to grow, but iron ore vol­umes have de­clined, re­duc­ing the scope for growth of ex­port.”

With re­gard to new port devel­op­ment, the govern­ment, un­der the Sa­gar­mala project, had set am­bi­tious tar­gets un­der the four pil­lars of port mod­erni­sa­tion (in­clud­ing new port devel­op­ment), port con­nec­tiv­ity en­hance­ment, port-linked in­dus­tri­al­i­sa­tion, and coastal com­mu­nity devel­op­ment for phase-wise im­ple­men­ta­tion over the pe­riod 2015 to 2035. Re­cent MoS data in­di­cates that out of the ini­tial 700 projects iden­ti­fied, about 577 projects val­ued over `8,000

bil­lion are at var­i­ous stages of ex­e­cu­tion. How­ever, only about 61 projects have been com­pleted till date and an­other 162 projects are in im­ple­men­ta­tion, while the bal­ances are ei­ther at ten­der­ing or DPR prepa­ra­tion stage.

ICRA be­lieves that on all four pil­lars of Sa­gar­mala, there has been some progress es­pe­cially un­der port ca­pac­ity en­hance­ment, ef­fi­ciency im­prove­ment, and port con­nec­tiv­ity where there are vis­i­ble re­sults. On port con­nec­tiv­ity, there has been grad­ual progress on both road and rail con­nec­tiv­ity projects.

Com­ment­ing on this, Ankit Pa­tel, As­sis­tant Vice Pres­i­dent and Co-Head, Cor­po­rate rat­ings, ICRA, said, “While these in­cre­men­tal projects could also take a long pe­riod to com­plete and start yield­ing re­sults, we be­lieve that di­rec­tion­ally, this is pos­i­tive as the devel­op­ment of good evac­u­a­tion in­fra­struc­ture would drive the devel­op­ment of more in­dus­trial clus­ters. Par­al­lelly, the or­ders rolled out on na­tional wa­ter­ways and the pol­icy ini­tia­tives put in place to help coastal ship­ping like the re­moval of cab­o­tage re­stric­tions, the coastal berth scheme, etc., are all pos­i­tive.”

Over­all, the ICRA note says that diver­si­fied port sec­tor play­ers will con­tinue to ex­pe­ri­ence mod­er­ate growth in cargo in the near term.

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