The list of issues to resolve for Indian ports to achieve potential

Wednesday, 11 Jun 2014: Mr Nitin Gadkari, Shipping Minister of India, seems to follow other ministers in rushing through his agenda of development as a slew of issues confront him on the ports domain.

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India, which has 12 major ports and 20 minor ones, needs to tackle issues like tariff reforms, restructuring the 12 government owned ports into corporate entities from a trustee set-up, development of coastal shipping and inland water transport, road linkages to ports and allowing Indian fleet owners to register their ships overseas.

A big demand for robust port infrastructure, strong growth potential, favourable investment climate, business-friendly regulatory environment, and incentives provided by the federal governments provide private players immense opportunities to foray into the port sector.

The BJP manifesto said that "We will evolve an economic model of port-led development. India is blessed with a long coastline. We will modernise existing ports on one hand, and develop new ones on the other, stringing together our Sagar Mala (ocean necklace) project. Public-private partnership would be encouraged to tap into private sector resources as well as expertise. An institutional framework would be established for the same; while regulators would be given greater autonomy as well as accountability."

India's big ports account for about 60% of the total cargo shipped through the country's ports.

The Indian government had initiated the National Maritime Development Programme to develop the maritime sector for the administration and has projected an outlay of USD 11.8billion.

The UPA government had also permitted foreign direct investment of up to 100% under the automatic route for projects related to the construction and maintenance of ports and harbours and a 10 year tax holiday for enterprises engaged in ports. Whether Mr Gadkari pursues this or he has his own plans, remains to be seen.

It is reported that Belgium has shown an interest in developing a new port near Kolkata. The Mangalore port is initiating efforts to expand in order to make it the most sought after gateway for trade in Karnataka.

According to Mr PC Parida, chairman of The New Mangalore Port Trust, said that "The Trust intends to increase the draught of the port, from the present 14 meter to 18 meter so as to handle larger vessels, particularly petroleum and oil products." The Mangalore port handles 75% of India's coffee exports and the bulk of its cashew yield.

The government-owned Paradip port is also planning to set up 6 captive berths of more than 10 million tonne per annum capacity each as part of the development of a Western Dock complex.

Considering a PPP model, the Paradip Port Trust has estimated a total investment of INR 6,500 crore for the development of the Western Dock. The Visakhapatnam Port has handled highest iron ore among all the 12 major ports in the country during 2013 to 2014.

India's 12 major ports include Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata which handle approximately 61% of the country's total cargo traffic, besides about 200 non major ports in control of states.

Source - Times of Oman