Government slips on shipping

Effective fund utilisation remains a cause of concern

India's 7,500-km coastline with 13 major ports and its strategic location on world trade routes gives it a natural advantage to control and direct shipments. Yet, India has not managed to get a dominant grip on shipping, even in its own continent.

The industry has been besieged by its own set of problems, amplified by government's rigid laws and a detached financial impetus.

The Union shipping ministry had awarded 25 projects for more than Rs 9,000 crore, out of which eight were on the public-private partnership model. Major ports collectively completed around 20 projects in 2014-2015, adding a capacity of 90 mtpa (million tonnes per annum) in 2014-15. In 2015-16, over 30 projects are to be completed at Rs 4,500 crore, adding 90 mtpa to capacity.

 

However, since the start of the 12th Five-Year Plan (2012-2017), there has been a consistent decline in the average utilisation of Plan funds, with a utilisation rate of 55.45 per cent.

A parliamentary standing committee had criticised the ministry for underperformance in various areas. "The committee is clueless about how far the ministry would be able to achieve its ambitious plan for capacity addition to ports by 1.53 times of the existing capacity by the end of 2017," the demand for grants report stated recently.

Major ports cumulatively handled 581.3 million tonnes of cargo in 2014-15, an increase of 4.65 per cent from 2013-2014. Yearly container volumes at major ports totalled eight million TEUs (twenty-foot equivalent units), an increase of 6.7 per cent from 7.46 million TEUs the previous year.

The National Democratic Alliance government had after coming to power last year made visible strides in some areas. One of the first steps was resuscitating the Sagar Mala project, which got the Cabinet's "in-principle" approval. Sanctioned by the previous NDA government, under Prime Minister Atal Bihari Vajpayee, the project seeks to create a string of ports around India's coastline to safeguard maritime interests.

The shipping ministry has also focused on reducing the turnaround time for ships by easing customs processes at major ports.

A senior shipping ministry official said: "One of the focus areas has been increasing the efficacy of our ports. We want to shorten the time each ship spends at our ports. As the turnaround time decreases, our ports' overall productivity will increase."

The government also signed a memorandum of understanding with Iran to develop the Chabahar port there recently.

It has also initiated plans to form a company by pooling resources from all major ports and Rail Vikas Nigam Limited to improve rail and road connectivity of ports, for speedy evacuation of cargo.