[Infrastructure] Project Sagarmala, Port Infrastructure in India, Problems & Reforms

Economy1 Comment

India Yearbook
  1. What is Project Sagarmala?
  2. Port Infrastructure bottlenecks

What is Project Sagarmala?

  • China’s String of Pearls = aims to surround India by developing ports in neighbor countries and possible convert them in military base at later stage.
  • But Project Sagarmala only aims to improve India’s maritime infrastructure by modernizing existing major and minor ports of India and setting up new ports.

In 2003, then PM Vajpayee proposed Project Sagarmala with following features:

  1. Setup Sagarmala Development Authority (Similar  to National highway authority of India)
  2. Will get money via Maritime development cess. (5 paise per kg on cargo)
  3. Will improve ports, shipping industry, inland water transport, coastal shipping.
  4. PPP and FDI to gather more inve$tment.
Two Initiatives by NDA Government
Project SethusamudramTo link Palk Bay with Gulf of Mannar and facilitate maritime trade through it
Project SagarmalaTo modernize minor and major ports of India; + setup new ports. ($22 billion USD)

2004: UPA comes in power, hence Sagarmala project shelved. Anyways, BJP no BJP; Sagarmala No Sagarmala- but the fact is India’s port infrastructure is in bad shape and needs urgent upgrades. This leads to next topic:

D3: Port Infrastructure bottlenecks

(GS3) Q. Examine the bottlenecks in Indian port infrastructure and list the initiative taken in recent times to address this issue. (200 words.)

Reasons:

  1. High clearance time at Indian ports- any ship entering India has to sign ~150 documents, multiple inspection layers and tariff rates.
  2. As a result, Indian ports have high turn-around time compared to others. (India -4 days, China -12 hours, Singapore – 4 hours)
  3. Absence of large scale warehousing facility and mechanization- especially for foodgrains.
  4. Tonnage of all 12 ports combined cannot compete with Shanghai alone.
  5. Indian shipping industry subjected to 12 type of taxes. Tax per ton of cargo, is very high.
  6. Large vessels cannot enter in Indian ports. They dock at Sri Lanka, and send cargo via smaller vessels.
  7. Desi Corporates hire foreign ships at higher cost because domestic shipbuilding industry is underdeveloped. Indian ships carry less than 10% of Indian cargo to foreign countries.
  8. As per merchant shipping Act, Indian flag bearing ships must be manned by Indian maritime officers but there is shortage of trained personnel. In the international Cargo MNCs- majority of the officers belong to China, Philippines, Turkey and Ukraine.
  9. Only 3 LNG terminals -Hazira, Dahej @Gujarat and Kochi @Kerala.
  10. Port trust cannot regulate their own tariff, Ports in India need third party neutral regulator.
  11. Problems of land acquisition and environmental clearances while setting up new ports.
  12. India is lacks expertise to develop maritime infrastructure- this is visible not only at domestic level but also abroad at Chabhar (Iran) and Sittwe in Myanmar as part of Kaladan project.

Steps taken

  1. Shipping ministry formed new Committee to setup two major ports
    1. Sagar, West Bengal.
    2. Dugarajapatnam, Andhra Pradesh Simandhra.
  2. Together they’ll add new port capacity of 100 MTPA.
  3. Established Indian maritime university @Chennai, with campuses in Kochi, Kandla, Kolkata, Mumbai to address the manpower issue.
  4. 100% FDI permitted for port development projects (automatic route), along with reliefs in Income tax for such investors.
  5. 12th FYP aims to add ~2500 MTPA port capacity.
  6. PPP projects approved at Mumbai, Ennore, Kandla and Kolkata ports DBFOT- Design, Build, Finance, Operate and Transfer basis.
  7. Released guidelines on New Land Policy for Major Ports- to help them leverage their land resources for commercial advantage.
  8. Ford signed an MoU to export the cars from Chennai plant via Ennore Port for next ten years.
  9. Tadadi, Karnataka: proposal to setup a new Greenfield Seaport here.
  10. 4th Container Terminal at JN Port
  11. Automatic Identification System (AIS) system and Vessel Traffic Management Services (VTMS) in all the Ports.
  12. Statutory body: DG Shipping to implement Merchant Shipping Act and perform regulatory functions (Like DGCA in aviation sector)

Total ~400 words, but you can selectively lift points to pack them in 200 words. let’s try

Q. Examine the bottlenecks in Indian port infrastructure and list the initiative taken in recent times to address this issue. (200 words.)

Reasons:

  1. High clearance time, almost a dozen type of taxes and nearly 150 document verification. As a result Indian ports have high turn-around time compared to China and Singapore.
  2. Absence of large scale warehousing facility and mechanization.
  3. Tonnage of all India’s 12 ports combined cannot compete with Shanghai alone
  4. Large vessels cannot enter Indian ports. They dock at Sri Lanka, and send cargo via smaller vessels.
  5. Corporates hire foreign ships at higher cost because domestic shipbuilding industry is underdeveloped.
  6. Shortage of Indian maritime officers.
  7. Only 3 LNG terminals -Hazira, Dahej and Kochi
  8. Issues related to tariff regulation, land acquisition and environmental clearances while setting up new ports.

Steps taken

  1. Shipping ministry formed Committee to setup two major ports
    1. Sagar, West Bengal.
    2. Dugarajapatnam, Simandhra.
  2. Established Indian maritime university @Chennai, with campuses at various port cities
  3. 100% FDI permitted for port development projects (automatic route), along with tax concessions.
  4. 12th FYP aims to add ~2500 MTPA port capacity.
  5. PPP projects approved at Mumbai, Ennore, Kandla and Kolkata ports.
  6. Signed MoU with Ford to export cars via Ennore Port.
  7. Proposal to setup a greenfield seaport @Tadadi, Karnataka.
  8. 4th Container Terminal at Jawaharlal Nehru Port.
  9. Automatic Identification System (AIS) system and Vessel Traffic Management Services (VTMS) in all the Ports.

~230 words.

Side notes

Major portsMinor Ports
under Union governmentState government (+Private sector)
controlled under Indian Ports Act

So far we’ve 13 major ports: six on east coast, seven on west coast.

Major_Port of india

West CoastEast Coast
  1. Kandla (Gujarat)
  2. Mumbai (Maharashtra)
  3. Jawaharlal Nehru (Maharashtra)
  4. Marmugao (Goa)
  5. New Mangalore (Karnataka)
  6. Cochin (Kerala)
  7. Panaji (Goa)
  1. V O Chidambaranar, Tuticorin (Tamil Nadu)
  2. Chennai (Tamil Nadu)
  3. Ennore (Tamil Nadu)
  4. Visakhapatnam (Andhra Pradesh)
  5. Paradip (Orissa)
  6. Kolkata-Haldia (West Bengal)
New ports (proposed), both @East Coast:

  1. Sagar, West Bengal.
  2. Dugarajapatnam, Andhra Pradesh.

Mock Questions

Answer following in 200 words each

  1. (GS3) Examine the bottlenecks in Indian port infrastructure and list the initiative taken to address this issue in recent times.
  2. What is Project Sagarmala? How is different than China’s Strings of Pearls strategy?

Mrunal recommends

  1. (free) NCERT, NIOS, TN-Books
  2. Environment by ShankarIAS
  3. Indian Polity M.Laxmikanth (Hindi | English)
  4. Art & Culture by Nitin Singhania (Hindi | English)
  5. Spectrum: Modern History (Hindi | English)
  6. Bipin Chandra: Post Independence
  7. Fast-track to Arithmetic Rajesh Verma
  8. MK Pandey’s Analytical Reasoning
  9. Disha’s Topicwise Paperset (Hindi | English)
  10. School Atlas
  11. Mains: Language papers
  1. (free) NCERT, NIOS, TN-Books 4 History,Geo,Sci
  2. Indian Polity M.Laxmikanth (Hindi | English)
  3. Spectrum: Modern History (Hindi | English)
  4. Maths: Quantam CAT Sarvesh Kumar
  5. Objective General English SP Bakshi
  6. Word Power made Easy -Norman Lowe
  7. Topic wise Solved Paperset by Disha


One Comment on ““[Infrastructure] Project Sagarmala, Port Infrastructure in India, Problems & Reforms”

  1. Bhagwan Mansukhani

    Ministry of shipping believe more investment in port sector rout of Growth which is wrong because reduction in port logistic cost is the solution of Growth. Higher investment, 12% bank interest, higher port revenue share make port PPP model failure. Additional port capacity made but lying idle as users can’t pay.
    Instead increasing port capacity and increasing draft, port should encourage discharging higher draft vsl in mid sea using barges and barges instead discharging in ports, be discharged on captive jetties of industries and avoid Road/Rail transport. For this need water based industries.

    Bhagwan Mansukhani, Rishi shipping Kandla

Write your message!