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Chapter # 16.Ports, Shipping and Inland Waterways

Objectives 

  • Double the share of freight transported by coastal shipping and inland waterways from 6 per cent in 2016-171 to 12 per cent by 2025.
  • Increase the port handling capacity to 2,500 million metric tonnes (MMT)2 by 2022-23.
  • Reduce the turnaround time at major ports from about 3.44 days (2016-17)3 to 1-2 days (global average) by 2022-23.
  • Increase the throughput of inland waterways from 55.20 MMT in 2016-17 to 60-70 MMT by 2022-23.
  • Augment the capacity of inland water transport by increasing the least available depth.

Current Situation

  1. Ports and shipping

India has a coastline spanning about 7,500 km, forming one of the biggest peninsulas in the world. Around 90 per cent of India’s external trade by volume and 70 per cent by value are handled by ports.4

  • Twelve major ports and 205 non-major ports operate on India’s coast. Yet, roads and railways continue to be the dominant mode for cargo movement.
  • Despite being the most cost-effective (Figure 16.1) and efficient mode, water transport accounted for 6 per cent of freight transport in India in 2016-17.
  • The total cargo handling capacity at major and non-major ports stands at 2161.85 MMT5 as on March 3l, 2017. Total capacity utilization across all ports was 52.44 per cent. During 2016-17, the total cargo throughput through major and non-major ports was 1133.69 MMT.
  • The Ministry of Shipping’s Sagarmala programme focuses on modernizing and developing ports, enhancing port connectivity, supporting coastal communities and stimulating port-linked industrialization (Figure 16.2).
  • Sagarmala aims to reduce the logistics costs for foreign and domestic trade, leading to an overall cost savings of INR 35,000 to INR 40,000 crore annually by 2025. It also aims to double the share of water transportation in the modal mix.
  • The government has set up the Sagarmala Development Company Limited (SDCL) to provide funding support to special purpose vehicles (SPVs) set up to implement projects and the Indian Port Rail Corporation Limited (IPRCL) to undertake port-rail connectivity projects under Sagarmala.
  1. Inland waterways

Inland Water Transport (IWT) carries less than 2 per cent of India’s organized freight traffic and negligible passenger traffic. The annual freight volumes carried on inland waterways using National Waterways (NW-1, NW-2, and NW-3) and Goa Waterways was 21.91 MMT in 2016- Additionally, Maharashtra Waterways alone transported more than 33.29 MMT.

  • The Inland Waterways Authority of India (IWAI) is mandated to develop and maintain infrastructure for fairway, navigational aids and terminals. The IWAI also provides an enabling environment for private investment in cargo vessels and operational services.
  • Until 2015, there were only five NWs in the country. In April 2016, 106 more waterways spread over 24 states were declared as NWs. The ministry is augmenting the capacity of NW-l under the Jal Marg Vikas project.
  • The project will enable the movement of larger vessels of 1,500-2,000 tonnes on inland waterways. The government is also proposing to fund NWs through the Central Road Fund (CRF).
  • The Ministry of Finance has amended the Central Road Fund Act, 2000, as part of the Finance Bill 2018 to include a list of projects and infrastructure sub-sectors, including inland waterways, for which the CRF could be used. The CRF has since been renamed the Central Road and Infrastructure Fund.

Constraints

  1. Modal mix: Roads (54 per cent) continue to be the dominant mode of transporting cargo, followed by rail (33 per cent). Transportation of cargo through waterways – shipping and inland water – accounts for a minuscule modal share (6 per cent) despite it being the most cost-effective and efficient mode.
  2. Draught levels: Most Indian container handling ports lack the capability to handle large container vessels due to inadequate depth; a minimum draft depth of 18 metres is needed to enable mother vessels to dock at ports. With international trade leaning towards the more economically viable mother vessels, shallow draft adversely affects a port’s potential to become a hub port.
  3. Connectivity to ports: Weak hinterland connectivity between production centres and gateway ports often leads to higher costs and delays because of sub-optimal mode choices.
  4. Transhipment port: A large percentage of containers in India are currently transhipped through other ports, such as Colombo (just south of India), Singapore (East), Dubai and Salalah (West) due to the absence of a transhipment port in the country. This has led to additional costs and delays due to the feeder voyage from India to the hub port.
  5. Charges by the shipping lines: The business practices of shipping lines have played a key role in the present negative perception of sea transport. A long pending concern has been the high rate and multiplicity of charges imposed by shipping lines.
  6. Capital for inland vessels: At present, the cost of capital is very high and makes IWT freight uncompetitive. It is difficult to attract capital for building inland vessels as it is a significant investment.
  7. Technical issues in inland waterways: The varying and limited depths due to the meandering and braiding of alluvial rivers and the erosion of their banks causing excessive siltation, lack of cargo earmarked for IWT, non-mechanized navigation lock systems and insufficient unloading facility at terminals hinder the use of IWT by shippers.
  8. Regulatory issues for inland waterways: States’ Ferries Acts from various years govern cross ferry movement and this may present a barrier to inland navigation, as the regulations may not take into account safety considerations.

Way Forward

  1. Open up India’s dredging market
  • The government needs to open up the dredging market to attract more players, particularly international players, in dredging activities to increase and maintain draft depth at ports to attract large vessels and enable them to become hub ports. At present, the Dredging Corporation of India (DCI) and a limited set of private vendors serve the Indian dredging market, limiting competition. Foreign players will be attracted to the market if the government takes measures such as consolidating dredging contracts across cohorts of ports and withdrawing, at least temporarily, the right to first refusal given to Indian vendors.
  • To enable major ports to handle larger vessels, an action plan to increase the draft depth of ports has been prepared. Most major ports have already achieved a draft of 14 metres or more except Kolkata Port, where deeper draft has not been feasible because of the riverine nature of the port. Some major ports are striving to achieve deeper drafts up to18 metres. The outer harbour in Visakhapatnam has very deep draft of more than 18 metres. Work is in progress to create a draft of more than 18 metres in Mormugao and Kamarajar Port.
  1. Expedite the implementation of Sagarmala
  • Expedite the completion of various projects under Sagarmala, especially those aimed at improving port connectivity, setting up coastal economic zones (CEZs) and establishing new ports.
  • The setting up of a single window facility for cargo clearance and putting in place fully mechanized cargo handling infrastructure will be critical to increase throughput.
  1. Ease the business environment around shipping and ports
  • The Government of India needs to take a fresh look at its policy of imports on a ‘’Free on Board” basis (FoB policy) as it needs to balance risk between the importer and exporter.
  • Enhance technology use in ports and, wherever feasible, draw lessons from successful global ports such as Rotterdam, Felixstowe and Singapore to improve efficiency.
  1. Transhipment ports and shipping lines
  • Transhipment via Cochin ICCT (already commissioned), the upcoming Vizhinjam Port and the Enayam Port at Colachel will create a transhipment cluster similar to the clusters in Malaysian and Singaporean ports. The cluster should be completed within the targeted timelines and a business plan should be drawn up to make it a success.
  • The new Merchant Shipping Bill to replace the Merchant Shipping Act, 1958, needs to be enacted at the earliest to promote the ease of doing business, transparency and effective delivery of services. Opening up of the sector will improve the availability of ships and help reduce costs.
  1. Enhance last mile connectivity to inland waterways  
  • IWT should be integrated to multimodal/ intermodal connectivity. Inland terminals with proper road and/or rail connectivity and seamless transfer of goods from one mode to the other are important for an efficient logistics supply chain.
  • Procure floating terminals and cranes and place them suitably so that access to roads is possible.
  • Enhance linkages between national waterways and state waterways and feeder canals.
  1. Facilitate access to capital for inland vessels
  • Financing for inland vessels could be made part of priority sector lending by banks.
  • Categorizing inland vessels as infrastructure equipment will further ease access to capital issues for a sector where capital investments and operational costs are high.
  • Initially, viability gap funding needs to be given at least for 10 years until the infrastructure is fully developed, so that inland water transport is competitive.
  • We should consider waiving waterway charges and lock charges until operable infrastructure is made available.
  • Revive the shipbuilding finance scheme in line with the subsidy scheme that was in force during 2002-2007, which led to high growth rates in the shipping sector and full order books for Indian shipyards.
  1. Address technical and regulatory constraints in inland waterways to ease movement of inland vessels
  • CCEA, chaired by the Hon’ble Prime Minister approved the implementation of the Jal Marg Vikas project (JMVP) to augment the capacity of National Waterway-1 (NW-1) with technical assistance and investment support from the World Bank at a cost of INR 5369.18 crore. We must ensure that the project is completed by March 2023.6
  • From a regulatory standpoint, detention of a vessel without a valid reason should not be allowed.
  • A clear directive needs to be issued for security of inland vessels, crew and cargo.
  • Strengthen existing Inland Water Transport Directorates or Maritime Boards or set them up in states where they do not exist to ease the IWT business and to ensure efficient regulation and facilitation of IWT for cargo movement.



Chapter # 41. Data Led Governance and Policy Making

Objectives Evidence based policy making should be made integral to the overall governance structure in New India, 2022-23. To achieve this, timely gen

Chapter # 40. Optimizing the Use of Land Resources

Optimizing the Use of Land Resources-Ensuring that land markets function smoothly, through efficient allocation of land across uses, provision of secu

Chapter # 39. Modernizing City Governance For Urban Transformation

Objective  City Governance For Urban Transformation To transform our cities into economically vibrant and environmentally sustainable habitats that p

Chapter # 38. Civil Services Reforms

Objective  civil-services-reforms To put in place a reformed system of recruitment, training and performance evaluation of the civil service to ensur

Chapter # 37. Legal, Judicial and Police Reforms

Objective To ensure the safety and security of citizens and ensure access to effective legal systems and speedy delivery of justice. Current Situation

Chapter # 36. The North-East Region

Objectives The North-East Region (NER) should: Have adequate road, rail and air connectivity, waterways, internet connectivity and financial inclusion

Chapter # 35. Balanced Regional Development: Transforming Aspirational Districts

Objective  Balanced Regional Development: Transforming Aspirational Districts Achieve balanced development in India by uplifting 115 districts, curre

Chapter # 34. Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Other Tribal Groups and Minorities

SCs, STs, OBCs, De-Notified Tribes (DNTs), Nomadic Tribes (NTs) and Semi-Nomadic Tribes (SNTs) Objective  To accelerate the socio-economic developm

Chapter # 33. Senior Citizens, Persons with Disability and Transgender Persons

SENIOR CITIZENS  Objective To ensure a life of dignity, social security and safety for senior citizens, enabling them to actively participate in econ

Chapter # 32. Gender

Objective  To create an enabling environment, sans institutional and structural barriers. To enhance the female labour force participation rate to at

Chapter # 31. Nutrition

Objectives  Under POSHAN Abhiyaan, achieve the following outcomes by 2022-23, compared to the baseline of 2015-16 (National Family Health Survey-4):

Chapter # 30. Universal Health Coverage

Objectives  On the strong platform of Pradhan Mantri – Jan Arogya Yojana (PM-JAY): Attain a coverage of at least 75 per cent of the population

Chapter # 29. Human Resources for Health

Objectives  Achieve a doctor-population ratio of at least 1:1400 (WHO norm 1:1000) and nurse-population ratio of at least 1:500 (WHO norm 1:400) by 2

Chapter # 28. Comprehensive Primary Health Care

Objectives  Under Ayushman Bharat, scale-up a new vision for comprehensive primary health care across the country, built on the platform of health an

Chapter # 27. Public Health Management and Action

Objectives  To revamp radically the public and preventive health system in the nation through the following strategic interventions: Mobilize public

Chapter # 26. Skill Development

Obejctives  For harnessing the demographic advantage that it enjoys, India needs to build the capacity and infrastructure for skilling/reskilling/up-

Chapter # 25. Teacher Education and Training

Objectives There cannot be a quality education system without quality teachers. Therefore, a thorough revamp of the entire ecosystem of teacher educat

Chapter # 24. Higher Education

Objectives  Increase the gross enrolment ratio (GER) in higher education from 25 per cent in 2016-17 to 35 per cent by 2022-23. Make higher education

23. School Education

Objectives Universal access and retention: o Hundred per cent enrolment and retention at elementary education and secondary education levels; achieve

Chapter # 22. Sustainable Environment

Objective  The objective is to maintain a clean, green and healthy environment with peoples’ participation to support higher and inclusive economic

Chapter # 21. Water Resources

Objectives By 2022-23, India’s water resources management strategy should facilitate water security to ensure adequate availability of water for l

Chapter # 20. Swash Bharat Mission

Objectives The key objectives of the Swachh Bharat Mission include: 1. Making India Open Defecation Free (ODF) by October 2, 2019. 2. Carrying out ext

Chapter # 19.Smart Cities for Urban Transformation

Objectives  Leverage the ‘Smart Cities’ concept in select urban clusters to: Drive job creation and economic growth. Significantly improve effici

Chapter # 18. Digital Connectivity

Objectives Given the relevance of digital connectivity to economic growth and the need to eliminate the digital divide by 2022-23, India should aim to

Chapter # 17. Logistics

Objectives Achieve multi-modal movement of cargo on par with global logistics standards. Reduce the logistics cost to less than 10 per cent of GDP fro

Chapter # 16.Ports, Shipping and Inland Waterways

Objectives  Double the share of freight transported by coastal shipping and inland waterways from 6 per cent in 2016-171 to 12 per cent by 2025. Incr

Chapter # 15. Civil Aviation

Objectives Enhance the affordability of flying to enable an increase in domestic ticket sales from 103.75 million in 2016-171 to 300 million by 2022.2

Chapter # 14. Railways

Objectives By 2022-23, India should have a rail network that is not only efficient, reliable and safe, but is also cost-effective and accessible, both

Chapter # 13. Surface Transport

Objectives Increasing the coverage and quality of roads and highways is critical to enhancing connectivity and internal and external trade. By 2022-23

Chapter # 12. Energy

Objectives The government’s on-going energy sector policies aim “to provide access to affordable, reliable, sustainable and modern energy”. At t

Chapter # 11. Minerals

Objectives Double the area explored from 10 per cent of obvious geological potential (OGP) area to 20 per cent.1 Accelerate the growth of the mining s

Chapter # 10. Travel, Tourism and Hospitality

Objectives  Increase India’s share in global international tourist arrivals from 1.18 per cent to 3 per cent. Increase the number of foreign touris

Chapter # 9. Housing For All

Objectives Provide every family with a pucca house, with a water connection, toilet facilities, and 24×7 electricity supply and access. Build 2.9

Chapter # 8. Financial Inclusion

Objectives Banking for the unbanked  o Bank accounts: Ensuring universal access to bank accounts, which are a gateway to all financial services.  o

Chapter # 7.Doubling Farmers’ Income (III): Value Chain & Rural Infrastructure

Objectives • Transform the rural economy through the creation of modern rural infrastructure and an integrated value chain system. • Leverage the

Chapter # 6.Doubling Farmers’ Income (II): Policy & Governance

Objectives Create a policy environment that enables income security for farmers, whilst maintaining India’s food security. Encourage the participati

Chapter # 5.Doubling Farmers’ Income (I): Modernizing Agriculture

Objectives • Modernize agricultural technology, increase productivity, efficiency and crop diversification. • Generate income and employment throu

Chapter # 4.Industry

Objectives Double the current growth rate of the manufac-turing sector by 2022. Promote in a planned manner the adoption of the latest technology adva

Chapter # 3. Technology and Innovation

Objectives India should be among the top 50 countries in the Global Innovation Index by 2022-23.1 Five of our scientific research institutions should

Chapter # 2.Employment and Labour Reforms

Objectives Complete codification of central labour laws into four codes by 2019. Increase female labour force participation to at least 30 per cent by

Chapter # 1 Growth (India @ 75)

Objectives Steadily accelerate the gross domestic product(GDP) growth rate to achieve a target of about 8 per cent during 2018-23 This will raise the

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