Deadweight necklace

Barely a few months after Prime Minister Atal Bihari Vajpayee announced the grandiose Sagarmala (Golden Sea Chain) project to create a port-studded coastline, questions have started being raised about the justification for such a move "" and with reason.

For one thing, the very cost of building about 50 new ports with a distance of no more than 75 km between any two, and revamping the existing ones as envisaged in the scheme, would be prohibitive. The official estimates place the bill at above Rs 100,000 crore.

Of this, the proposed government share comes to a daunting Rs 15,000 crore. Expecting the rest of the investment "" over Rs 85,000 crore "" to come from the private sector is even more outlandish than believing that the government will be able to fund its share of this huge investment.

The apprehensions on this count emanate also from the fact that the proposed maritime development cess of five paise per kg of cargo handled at the ports will manage to raise no more than Rs 2,800 crore ""even if the anticipated increase in cargo traffic to 565 million tonnes by 2006-07 holds true.

Besides, it is not yet clear whether this cost estimate includes the expenses likely to be incurred on related activities like creation of warehousing infrastructure and putting up wave breakers. Creation of breakwaters alone usually cost as much as a third of the amount needed for port construction.

This aside, there are several other issues concerning this ambitious project that warrant its review. The foremost is the obvious question of whether the country needs so much augmentation of its port capacity.

At present, only about a dozen of the existing major ports draw enough business, though some of them do get over-crowded at peak traffic times. Out of over 180 minor ports, only about 50 are functional and handle paltry volumes of cargo.

So where is the need to clutter the country's coastline by building more ports and then allowing them to languish, like so many existing ones "" especially since they will not have the efficient inward transport linkages that make a port accessible?

Moreover, considering the nature of the country's east and west coasts, the technical feasibility of locating so many cites for port building is not beyond doubt. A viable port requires a natural draft of at least 6 to 8 metres "" a fact duly acknowledged in the Sagarmala proposal.

The experts are not sure that such draft would be available at cites as close to each other as the proposed 75 km range. At present, even the major ports like Mumbai and Kolkata just about manage to maintain an 8-metre draft. Among the existing minor ports, fewer than 20 have a draft of over 6 metres.

Under the circumstances, the government would do well to let this proposal be thoroughly studied by experts and suitably amended. Pending such analysis, what the government can do is to go ahead with that part of the proposal pertaining to the development of the existing ports, both major and minor.

The cost-benefit ratio of such a move would be much more attractive than the creation of expensive and unviable new port capacity.