[Infrastructure] Project Sagarmala, Port Infrastructure in India, Problems & Reforms

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[Infrastructure] Project Sagarmala, Port Infrastructure in India, Problems & Reforms

  1. What is Project Sagarmala?
  2. Port Infrastructure bottlenecks

What is Project Sagarmala?

  • China’s String of Pearls = aims to surround India by developing ports in neighbor countries and possible convert them in military base at later stage.
  • But Project Sagarmala only aims to improve India’s maritime infrastructure by modernizing existing major and minor ports of India and setting up new ports.

In 2003, then PM Vajpayee proposed Project Sagarmala with following features:

  1. Setup Sagarmala Development Authority (Similar  to National highway authority of India)
  2. Will get money via Maritime development cess. (5 paise per kg on cargo)
  3. Will improve ports, shipping industry, inland water transport, coastal shipping.
  4. PPP and FDI to gather more inve$tment.
Two Initiatives by NDA Government
Project Sethusamudram To link Palk Bay with Gulf of Mannar and facilitate maritime trade through it
Project Sagarmala To modernize minor and major ports of India; + setup new ports. ($22 billion USD)

2004: UPA comes in power, hence Sagarmala project shelved. Anyways, BJP no BJP; Sagarmala No Sagarmala- but the fact is India’s port infrastructure is in bad shape and needs urgent upgrades. This leads to next topic:

D3: Port Infrastructure bottlenecks

(GS3) Q. Examine the bottlenecks in Indian port infrastructure and list the initiative taken in recent times to address this issue. (200 words.)

Reasons:

  1. High clearance time at Indian ports- any ship entering India has to sign ~150 documents, multiple inspection layers and tariff rates.
  2. As a result, Indian ports have high turn-around time compared to others. (India -4 days, China -12 hours, Singapore – 4 hours)
  3. Absence of large scale warehousing facility and mechanization- especially for foodgrains.
  4. Tonnage of all 12 ports combined cannot compete with Shanghai alone.
  5. Indian shipping industry subjected to 12 type of taxes. Tax per ton of cargo, is very high.
  6. Large vessels cannot enter in Indian ports. They dock at Sri Lanka, and send cargo via smaller vessels.
  7. Desi Corporates hire foreign ships at higher cost because domestic shipbuilding industry is underdeveloped. Indian ships carry less than 10% of Indian cargo to foreign countries.
  8. As per merchant shipping Act, Indian flag bearing ships must be manned by Indian maritime officers but there is shortage of trained personnel. In the international Cargo MNCs- majority of the officers belong to China, Philippines, Turkey and Ukraine.
  9. Only 3 LNG terminals -Hazira, Dahej @Gujarat and Kochi @Kerala.
  10. Port trust cannot regulate their own tariff, Ports in India need third party neutral regulator.
  11. Problems of land acquisition and environmental clearances while setting up new ports.
  12. India is lacks expertise to develop maritime infrastructure- this is visible not only at domestic level but also abroad at Chabhar (Iran) and Sittwe in Myanmar as part of Kaladan project.

Steps taken

  1. Shipping ministry formed new Committee to setup two major ports
    1. Sagar, West Bengal.
    2. Dugarajapatnam, Andhra Pradesh Simandhra.
  2. Together they’ll add new port capacity of 100 MTPA.
  3. Established Indian maritime university @Chennai, with campuses in Kochi, Kandla, Kolkata, Mumbai to address the manpower issue.
  4. 100% FDI permitted for port development projects (automatic route), along with reliefs in Income tax for such investors.
  5. 12th FYP aims to add ~2500 MTPA port capacity.
  6. PPP projects approved at Mumbai, Ennore, Kandla and Kolkata ports DBFOT- Design, Build, Finance, Operate and Transfer basis.
  7. Released guidelines on New Land Policy for Major Ports- to help them leverage their land resources for commercial advantage.
  8. Ford signed an MoU to export the cars from Chennai plant via Ennore Port for next ten years.
  9. Tadadi, Karnataka: proposal to setup a new Greenfield Seaport here.
  10. 4th Container Terminal at JN Port
  11. Automatic Identification System (AIS) system and Vessel Traffic Management Services (VTMS) in all the Ports.
  12. Statutory body: DG Shipping to implement Merchant Shipping Act and perform regulatory functions (Like DGCA in aviation sector)

Total ~400 words, but you can selectively lift points to pack them in 200 words. let’s try

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