<div><em>Modernisation of ports and improvement of volume and traffic on ports have been an agenda "on paper" of the successive central governments. <strong>Ashish Sinha</strong> decodes the ambitious Sagar Mala project along with who said what in the past 12 years on port modernisation and development.</em></div><div> </div><div>India at present has 13 major ports - Mumbai, Jawaharlal Nehru Port Trust, Kolkata (with Haldia), Chennai, Visakhapatanam, Cochin, Paradip, New Mangalore, Marmagao, Ennore, Tuticorin, Kandla and Port Blair under the control of Centre while has about 200 non-major ports operated by states and private parties.</div><div> </div><div>Modernisation of ports and improvement of volume and traffic have been an agenda "on paper" of the successive central governments. On paper, various plans and projects have been announced with timelines on investments, returns, modernisation, etc. But has anything happened on ground? Here is a snapshot of the initiatives around port modernisation and development.</div><div> </div><div><strong>What is Sagar Mala Project?</strong></div><div>The Sagar Mala Project was first announced by former Prime Minister Atal Bihari Vajpayee on August 15, 2003. Among the aims were expansion and modernisation of the shipping sector, development of inland navigation, and improvement in draft. The plan envisaged an investment of over Rs 100,000 crore over a period of 10 years - between 2003-2013 - to implement the project. A large chunk of funding was envisaged from the private sector.</div><div> </div><div><strong>What happened to the project?</strong></div><div>In May 2004, the NDA Government at the centre was replaced by the UPA Government. The Sagar Mala Project remained on paper. On August 3, 2009, G.K. Vasan, the then Minister of Shipping, told the Parliament, "The draft outline of 'Sagar Mala' Programme which was prepared pursuant to the announcement of Sagar Mala initiative by the then Prime Minister on 15th August, 2003, could not be processed to its finality. No project has, therefore, been taken up under this Programme."</div><div> </div><div>So Sagar Mala project was in cold storage during the decade long rule of UPA.</div><div> </div><div><strong>What did UPA do?</strong></div><div>UPA ruled at the centre for around a decade. In 2011 government unveiled a new policy for the shipping sector entailing an investment of Rs 5 lakh crore by 2020. Under the policy, port capacity was to go up to 3,200 million tonnes (MT) from 617 MT as on March 31, 2010. Policy envisaged bringing major reforms in this space. It was called The Maritime Agenda 2020, a perspective plan that replaced the National Maritime Development Project (NMDP). Then Shipping Minister G.K. Vasan had launched the policy. As per the plan, out of the Rs 5 lakh crore investment proposed in the sector, Rs 3 lakh crore would be in the port sector, the remaining would have been infused in the Shipping sector. At the time, shipping minister Vasan had said the Rs 1.39 lakh crore NMDP plan which was to expire on March 31, 2012 will get replaced with the new agenda and include its remaining projects.</div><div> </div><div><strong>What was Maritime Agenda 2020?</strong></div><div>276 projects were identified under the NMDP through public-private-partnership (PPP) mode. The government planned to award 21 projects worth Rs 13,952 crore in 2013-14. The plan envisaged the capacity augmentation of 13 major ports.</div><div> </div><div>Also, to set up more major ports in the country - one each on the East and West coast - in addition to the existing 13 major ports.</div><div> </div><div>Four major ports - two on the east coast - Vizag and Chennai and two on the West coast - Jawaharlal Nehru Port Trust and Cochin port were to be converted into major hubs.</div><div> </div><div>In mid-2014, the Narendra Modi-led NDA replaced the UPA government at the centre.</div><div> </div><div><strong>What entails under Sagar Mala Project of 2015?</strong></div><div>Centre's Role:</div><div> </div><ul><li>Develop port infrastructure along the country's 7,500 km coastline</li><li>Establish Indian Port Rail Corporation</li><li>Modernisation of ports and islands</li><li>Setting up of coastal economic zones</li><li>New major ports and fish harbours to be set up</li><li>Government intends to develop 30 projects in the current fiscal at a cost of Rs 14,226 crore</li><li>Set up eight automobile industrial zones at ports to recycle over 10 years old vehicles</li></ul><div> </div><div>New sites identified to be converted into ports:</div><div> </div><ul><li>Sagar Island (West Bengal)</li><li>Vadhavan (Maharashtra)</li><li>Colachel ( Tamil Nadu)</li><li>Tadadi (Karnataka)</li><li>Total investment envisaged: Rs 70,000 crore</li></ul><div> </div><div><strong>What will state governments do?</strong></div><div>State governments will be requested to:</div><div> </div><ul><li>Set up State Maritime Boards in AP, Goa, WB, Puducherry & Lakshdweep</li><li>Set up SSC to coordinate and monitor Sagarmala activities (Gujarat, Maharashtra, Goa, Karnataka, TN, Kerala, Puducherry, AP)</li><li>Provide necessary inputs for NPP and CEZ Master Plan preparation by providing data and nominate suitable officers for working groups</li><li>Actively participate in SCSC, NSAC and sector-specific working groups</li><li>State Industrial Development Agency to factor the land available with major / non major ports in its plans for industrial development</li><li>Land allocation for identified projects; Financial partnership through SPVs</li><li>Provide statutory clearances such as land use change, environment etc</li><li>Fast track project appraisal & approval and implement projects under the State’s ownership in a timely manner</li></ul><div> </div><div><strong>What is planned under Sagar Mala?</strong></div><div>- Port Connectivity Improvement: Increase coastal shipping volumes of key cargo – E.g. Coal, Steel, Cement, to reduce logistics cost and decongest rail and road network and Eliminate process bottlenecks to reduce container logistics time and cost</div><div> </div><div>- Port Modernization: Improve operations efficiency and augment capacity of major ports; develop 4-5 new ports to cater to cargo traffic growth and reduce logistics cost and develop a Transhipment Hub Port near international shipping route</div><div> </div><div>- Port Capacity Augmentation (FY 2015-16): Target: 30 projects; Investment of Rs. 14,226 Cr, 162.20 MMTPA additional capacity. 14 projects awarded; Investment of Rs 8,714 Cr, capacity addition of 33.15 MMTPA</div><div> </div><div>- Major Ports Operational Efficiency Improvement: 104 initiatives identified for implementation; ~115 MMT incremental volume to be unlocked in existing port capacity; Revenue generation of Rs. 972 Cr</div><div> </div><div>- Port-based Smart Cities: Land identified in Kandla and Paradip for development of port-based smart cities. Tenders issued for conducting techno-economic feasibility study</div><div> </div><div>- Port-led Industrial Development: Industrial development plan for existing & new port locations under preparation; Marine cluster potential being evaluated (Katupalli and Ennore)</div><div> </div><div>- Coordination Committee constituted between DIPP & M/Shipping</div><div> </div><div>- Coastal Economic Zones (CEZ): 14 CEZs identified and perspective plans under development; SEZ in JNPT, Free Trade Warehousing Zone at Cochin & Ennore being implemented</div><div> </div><div><strong>ashish.sinha@businessworld.in</strong></div>
