 "Money is not an issue for port-led development: Nitin Gadkari")
The Centre has taken a number of initiatives to further strengthen ports and shipping and thereby make India competitive. In an interview with Sanjay Jog, the Union minister of ports and shipping Nitin Gadkari explains the government’s intent. Edited excerpts:
About the Sagarmala project.
The national perspective plan, released by the Prime Minister Narendra Modi at the Maritime India Summit, aims to promote port-led development by harnessing the 7,500-km coastline, 111 waterways of 14,500 km. At least 150 projects have been identified — infrastructure development (Rs 4 lakh crore), industrial investment (power, steel, manufacturing, Rs 8 lakh crore), augmentation of coastal shipping and inland waterways to cut logistic cost (Rs 35,000-40,000 crore). The reduction in logistics cost will boost both domestic and external trade.
The government aims to increase coastal shipping to 400 million tonnes per annum (mtpa) by 2025 from 80 mtpa now. Efforts are being made to advance it to 2020. The Sagarmala project expects to create 10 million jobs. It has been conceived to address the challenges and capture all the opportunities of port-led development.
New ports are being planned but the performance of the existing 12 major ports and 200 notified non-major ones is rather miserable.
Bettering efficiency facilitates trade. The government proposes to unlock 100 mtpa capacity at existing terminals of major ports through improved efficiency. Their capacity will be increased through mechanisation and building of new terminals. Further, adequate emphasis is laid on port connectivity. Port-led industrialisation will support the Centre’s Make in India campaign.
Will financing these projects be a problem?
Money is not an issue for the proposed projects. India’s major shipping companies earned a combined profit of Rs 4,200 crore in 2015-16 and this is expected to increase to Rs 8,000 crore in 2016-17. Major ports generate a little more than Rs 6,000 crore of revenue in foreign currency, predominantly dollars. This revenue can be partly leveraged over the next 25 years, which will help mobilise Rs 1 lakh crore. If this is invested in a company and borrowed in dollars, it will be available at 2-2.5 per cent interest.
Besides, money is invested in fixed deposits. The upcoming projects will be under the public-private partnership model, wherein the government can provide some financial support and the investor will bring the rest.
Investors are concerned over the slow pace of reforms in the maritime sector.
The government is committed to reforms and new initiatives. The government is open, transparent and committed to a corruption-free system. The prime minister has personally asked investors to take up (with him) issues faced by them; so also in my capacity, all efforts will be made to address problems.
Major legislative reforms have been carried out towards codification, rationalisation and simplification of maritime statues, Acts, rules and regulations. The government has relaxed cabotage restrictions for ports and it will enable shipping lines to consolidate Indian export-import and empty containers at trans-shipment ports for onward transportation to destinations by the main shipping lines.
What efforts are being made to support the growth of maritime education?
Challenges still exist in closing the demand and supply gap. The need is not only for fresh skilling, but for up-skilling and re-skilling the existing labour force. The government will promote skill training and livelihood generation programmes in coastal districts and provide access to training facilities of major ports for third-party skill development programmes.
About the Sagarmala project.
The national perspective plan, released by the Prime Minister Narendra Modi at the Maritime India Summit, aims to promote port-led development by harnessing the 7,500-km coastline, 111 waterways of 14,500 km. At least 150 projects have been identified — infrastructure development (Rs 4 lakh crore), industrial investment (power, steel, manufacturing, Rs 8 lakh crore), augmentation of coastal shipping and inland waterways to cut logistic cost (Rs 35,000-40,000 crore). The reduction in logistics cost will boost both domestic and external trade.
The government aims to increase coastal shipping to 400 million tonnes per annum (mtpa) by 2025 from 80 mtpa now. Efforts are being made to advance it to 2020. The Sagarmala project expects to create 10 million jobs. It has been conceived to address the challenges and capture all the opportunities of port-led development.
New ports are being planned but the performance of the existing 12 major ports and 200 notified non-major ones is rather miserable.
Bettering efficiency facilitates trade. The government proposes to unlock 100 mtpa capacity at existing terminals of major ports through improved efficiency. Their capacity will be increased through mechanisation and building of new terminals. Further, adequate emphasis is laid on port connectivity. Port-led industrialisation will support the Centre’s Make in India campaign.
Will financing these projects be a problem?
Money is not an issue for the proposed projects. India’s major shipping companies earned a combined profit of Rs 4,200 crore in 2015-16 and this is expected to increase to Rs 8,000 crore in 2016-17. Major ports generate a little more than Rs 6,000 crore of revenue in foreign currency, predominantly dollars. This revenue can be partly leveraged over the next 25 years, which will help mobilise Rs 1 lakh crore. If this is invested in a company and borrowed in dollars, it will be available at 2-2.5 per cent interest.
Besides, money is invested in fixed deposits. The upcoming projects will be under the public-private partnership model, wherein the government can provide some financial support and the investor will bring the rest.
Investors are concerned over the slow pace of reforms in the maritime sector.
The government is committed to reforms and new initiatives. The government is open, transparent and committed to a corruption-free system. The prime minister has personally asked investors to take up (with him) issues faced by them; so also in my capacity, all efforts will be made to address problems.
Major legislative reforms have been carried out towards codification, rationalisation and simplification of maritime statues, Acts, rules and regulations. The government has relaxed cabotage restrictions for ports and it will enable shipping lines to consolidate Indian export-import and empty containers at trans-shipment ports for onward transportation to destinations by the main shipping lines.
What efforts are being made to support the growth of maritime education?
Challenges still exist in closing the demand and supply gap. The need is not only for fresh skilling, but for up-skilling and re-skilling the existing labour force. The government will promote skill training and livelihood generation programmes in coastal districts and provide access to training facilities of major ports for third-party skill development programmes.