Pushing Sagarmala: While there have been significant gains, overall progress has been sporadic
Multimodal terminals built at Varanasi, Sahibganj and Haldia along the Ganges thus enable goods to be ferried to northeastern states through Bangladesh. River cruise terminal infrastructure and jetties is being put into place.
Background:
• The Sagarmala programme is the flagship programme of the Ministry of Shipping to promote port-led development in the country through harnessing India’s 7,500 km long coastline, 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes.
• It aims at slashing logistics cost for both domestic and export-import cargo through port modernisation and new port development, port-led industrialisation, coastal and inland water transportation.
Components of Sagarmala Programme are:
- • Port Modernization & New Port Development: De-bottlenecking and capacity expansion of existing ports and development of new Greenfield ports.
- Port Connectivity Enhancement: Enhancing the connectivity of the ports to the hinterland, optimizing cost and time of cargo movement through multi-modal logistics solutions including domestic waterways (inland water transport and coastal shipping)
- Port-linked Industrialization: Developing port-proximate industrial clusters and Coastal Economic Zones to reduce logistics cost and time of EXIM and domestic cargo
- Coastal Community Development: Promoting sustainable development of coastal communities through skill development & livelihood generation activities, fisheries development, coastal tourism etc.
- Coastal Shipping & Inland Waterways Transport: Impetus to move cargo through the sustainable and environment-friendly coastal and inland waterways mode.
Need for Port-Led Development in India:
- India is one of the fastest growing large economies in the world 9 and ports play an important role in the overall economic development of the country.
- Approximately 95 % of India’s merchandise trade passes through sea ports.
- Many ports in India are evolving into specialized centres of economic activities and services and are vital to sustain future economic growth.
- However, Indian ports still have to address infrastructural and operational challenges before they graduate to the next level.
- For example, operational efficiency of Indian ports has improved over the years but still lags behind the global average.
- Turnaround time (TAT) at major ports was approximately 2.5 days in 2018-19, whereas global average benchmark is 1-2 days.
- Some of the private sector ports in India like Mundra and Gangavaram, have been able to achieve a turnaround time of around 2 days.
- Last mile connectivity to the ports is one of the major constraints in smooth movement of cargo.
- Around 87% of Indian freight uses either road or rail for transportation of goods.
- A significant share of this cargo experiences “idle time” during its transit to the ports due to capacity constraints on highways and railway lines connecting ports to production and consumption centers.
- Although Water-borne transport is much safer, cheaper and cleaner, compared to other modes of transportation, it accounts for less than 6% of India’s modal split.
- By comparison, coastal and inland water transportation contribute to 47% of China’s freight modal mix, while in Japan and US, this share is 34% and 12.4% respectively.
- Significant savings can be achieved by shifting movement of industrial commodities like coal, iron ore, cement and steel to coastal and inland waterways
- However, more than 90% of coal currently moves via railways. The constraints on connectivity results in higher logistics cost thereby affecting the manufacturing sector and export competitiveness
- Location of industries/manufacturing centres vis-à-vis the ports is also an important factor.
- It also focuses on Job creation.
Lessons From China:
- While cost differential between India and China is not significant on a per tonne km basis, China still has a lower container exporting cost, than the cost in India, due to lower lead distances.
- Presence of major manufacturing and industrial zones in coastal regions in China, which were developed as part of the Port-Led Policy of the government is the main reason for lower lead distances
Progress made so far:
- There has been significant progress in capacity augmentation of major ports with installed capacity rising by 79%.
- The waiting time for inbound and outbound cargo has also been reduced, with the overall turnaround time down to 52.80 hours from 96 hours in 2014-15.
- There are also efficiency gains with ports adopting measures for easy data flow like direct port entry, direct port delivery and upgraded port community system.
- Inland waterways are being developed as it takes 10-times less money to move a cargo by river than by congested highways.
- Multimodal terminals built the Ganges enable goods to be ferried to north-eastern states through Bangladesh.
- River cruise terminal infrastructure and jetties is being put into place.
- Recently, the National Sagarmala Apex Committee (NSAC) announced projects for the holistic development of coastal districts.
Where do we lack:
- Despite these gains, overall progress has been sporadic—especially in the major ports run by the government—due to land acquisition problems, inadequate fund mobilisation, limited private sector investments in key areas like port modernisation, among other factors.
- It noted that only one port modernisation project was completed last year while no progress has been made on the all-weather, all-cargo Vadhavan port in Maharashtra.
- Port modernisation projects have also seen cost escalation.
- On port-led industrialisation, only 8 out of the 12 major ports have initiated this on earmarked land.
- On inland waterways, its share of freight movement was less due to lack of depth of waterways for the movement of cargo and shortage of inland vessels.
What should be done?
- The committee recommended expediting port-led industrialisation with globally benchmarked targets and integrating land acquisition and port connectivity projects.
- Increasing the share of Indian ships to carry cargo—through a comprehensive review of the Merchant Shipping Act,1958—will truly fulfil the ambitions of Sagarmala.
- Only 8% of India’s exim trade and 40% of coastal cargo is carried by Indian ships.