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Port Modernization In India

Port Modernization In India

Introduction

  • India has an extensive 7,500 km coastline with 12 major ports and just under 200 minor ports, of which 139 are functioning. Primarily, the major ports deal with, by volume, 95% of India’s total foreign trade.
  • But, across the board, these ports are underperforming because of serious infrastructure and connectivity problems.

Major Significance Of Ports In Trade Promotion

  • Reduction in cost of transportation i.e. almost one tenth of air
  • Less ecological impact
  • Acts as important link to hinterland and overseas.
  • It is also significant for internal trade by providing livelihood to local community, multi modal connectivity by rail, roads and waterways and faster and inclusive approach in goods movement
  • It also facilitates goods movement through export and import thus leads to increased consumer choice and provision of goods at competitive price.
  • Enhancement to blue economy through fishing, tourism and passenger transport

Port Modernization

  • Since about more than 90% of India’s trade by volume is conducted via the country’s maritime route, there is a continuous need to develop India’s ports and trade related infrastructure to accelerate growth in the manufacturing industry and to assist the ‘Make in India’ initiative.
  • India has 12 major ports and approximately 200 non-major ports administered by Central and State Governments respectively.
  • As per the studies conducted under the Sagarmala Programme, it is expected that by 2025, cargo traffic at Indian ports will be approximately 2500 MMTPA while the current cargo handling capacity of Indian ports is only 1500 MMTPA.
  • A roadmap has been prepared for increasing the Indian port capacity to 3300+ MTPA by 2025 to cater to the growing traffic. This includes port operational efficiency improvement, capacity expansion of existing ports and new port development.

Sagarmala Program

  • The Sagarmala program is a flagship initiative of the Shipping Ministry to utilize the 7,500 km long coastline and its strategic location in the Indian Ocean.
  • The name ‘Sagarmala’ is from Hindi words ‘Sagar’ meaning ocean and ‘mala’ meaning ‘garland’.
  • It is a port-led development program that seeks to improve infrastructure development leading to better competitiveness in logistics, increasing industrialization and job creation and subsequently the development of the overall coastal economy.
  • It was first introduced in 2003 but failed to take root.
  • It was reintroduced in 2014.

Project Unnati – Operational Efficiency Improvement

  • Under Project Unnati, the global benchmarks were adopted to improve the efficiency and productivity KPIs for 12 major ports.
  • Around 116 initiatives were identified across 12 major ports to unlock more than 100 MTPA capacity just through efficiency improvement.
  • Out of which, 93 initiatives have been implemented to unlock more than 80 MTPA capacity

New Port Development  | Port Modernization In India 

  • To fill the demand gap, 2 new major ports are planned which will bring in significant capacity expansion.
  • The locations of these new ports are deliberated after detailed origin-destination study of cargo commodities and there are mainly three levers that propel the need for building new ports
  • New port locations have been identified based on the cargo flow for key commodities and the projected traffic:
    • Greenfield ports are proposed to be developed at
    • Wadhwan (Maharashtra)
    • Paradip Outer Harbour (Odisha)

Challenges In Development Of A World Class Port Infrastructure

  • Deficient dredging capacity – Draft is also a major limitation in India as terminals and ports are unable to cater to vessels beyond Panamax (Draft over 13 meters) size that are increasingly dominating global trade.
  • Limited Hinterland Linkages– Inefficiency due to poor hinterland connectivity through rail, road, highways, coastal shipping and inland waterways.
  • Issues with PPP Model– Most port PPPs impose strict limits on what private operators are allowed to do, usually in terms of the types of cargo they are allowed to handle.
  • Sub-optimal Transport Modal Mix – Lack of requisite infrastructure for evacuation from major and non-major ports leads to sub-optimal transport modal mix.
  • Financial constraints – Years of underinvestment have left the port infrastructure in dismal condition especially with regards to the non-major ports.
  • Incoherent Policy Measures – Port Infrastructure has been a neglected space in terms of policy focus due to multiple factors.
  • Processes and operations across India’s ports are not standardized or uniform, costs and time for key processes are unpredictable and there is an unacceptable level of variation across ports as well as within ports.
  • Lack of adequate berthing facility, number of berths, sufficient length for proper berthing of the vessels at the Non-Major Ports is another problem.
  • Land acquisition and environmental clearances are some specific challenges for port infrastructure.

Steps To Overcome The Challenges

  • Sagarmala project- The objective of this project are port modernisation and new port development, port connectivity enhancement, port-linked industrialisation and coastal community development.    (Port Modernization In India )
  • Central port authority act, 2016- to provide more autonomy to port and professionalise the governance structure.
  • Revised Model concession agreement- to provide private sector participation in port development and management.
  • Allowing 100% FDI under automatic route in port development.

Conclusion  | Port Modernization In India 

  • India’s cargo traffic handled by ports is expected to reach 1,695 million metric tonnes by 2021-22, according to a report of the National Transport Development Policy Committee and to capitalise on this potential, expedient development of port infrastructure becomes vital which will further help in realising the dream of $5 trillion economy by 2024.

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