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Amit Mitra

Coastal shipping is all set to come into its own, with coastal cargo movement forming a major link in the proposed Sagar Mala project. A recent TCS report says a key factor in the project's success will be the development of infrastructure at the nine minor ports on both the coasts.

COASTAL shipping in India, which has had a stunted growth in the shadow of other modes of transportation all these years despite its potential, is now set to get a significant boost, as coastal cargo movement constitutes a major link in the Sagar Mala project announced by the Prime Minister, Mr Atal Bihari Vajpayee, recently.

The country's coastal operators expect to see substantial investments in the sector in the coming years, especially with the Government appearing to have cottoned on to the importance and benefits of coastal shipping. The broad contours of the ambitious Sagar Mala project envisage a major role for coastal movement of a variety of cargoes.

Dogged by problems of high port tariffs, absence of any institutional mechanism to push this sector, poor rail/road connectivity between ports and disproportionately high bunkering costs for coastal vessels, the domestic coastal shipping sector has not mirrored the level of development it should. With a coastline of 7,517 km, dotted with 12 major and 185 minor and intermediate ports, India offers a lot of untapped potential for coastal cargo movement. The Indian coastal fleet at present comprises 425 ships aggregating 8.69 lakh DWT, which include tankers, bulk carriers, passenger-cum-cargo vessels, tugs, ro-ros and offshore supply vessels.

The importance of encouraging coastal shipping lies in the fact that the road and rail modes of transportation are strained to their utmost.

At present, the national transport system handles about 870 billion-tonne km of freight and 2,450 billion passenger-km annually, with the freight demand expected to burgeon to 1,800 billion-tonne km by 2012. The economic loss due to the congestion and accidents on roads is estimated at Rs 40,000 crore annuallyby a Tata Consultancy Service (TCS) study.

In the light of this, the importance of coastal shipping cannot be overemphasised. The total coastal traffic handled at all ports in the last fiscal was about 120 million tonnes, which was about 29 per cent of the total traffic handled by the ports.

Of the 120 million tonnes, about 88 million tonnes was handled at the major ports and 22 million tonnes by the Gujarat Maritime Board ports. In other words, only 10 million tonnes of coastal movement took place through the other minor and intermediate ports, with general cargo accounting for less than one per cent share.

Said an industry analyst: "Coastal shipping could have shouldered added responsibility with ease had it got the deserved attention. In China, coastal shipping registered a throughput of 870 million tonnes, while that of Japan was 549 million tonnes."

According to the TCS study, crude, POL and coal cargoes formed about 73 per cent of the coastal cargo handled at the major ports, with Ennore, Paradip, Tuticorin, Cochin and Visakhapatnam ports handling 50 per cent of this traffic.

After extensive studies on `divertable' traffic, the TCS report pointed out that "even if things stand as at present, 4 million tonnes of traffic can be diverted from road and rail to coastal shipping annually, without any increase in transport costs. Furthermore if certain concessions are extended to coastal shipping, the traffic can easily grow up to 10 million tones by 2012."

Says Mr S. S. Rangnekar, chairman, Indian Coastal Conference: "Indian exports are expected to grow to $80 billion by 2007 from the present level of about $46 billion. As such, the presence of a strong and adequate maritime transportation system, specifically coastal shipping, is vital to managing the projected freight growth."

Even in the context of economies of scale, coastal shipping is seen to have some strong advantages. A recent comparative analysis between truck and coastal ship movements between Mumbai and Goa has come to the conclusion that for movement of a parcel of 1,000 DWT cargo, a coastal vessel would require 15.1 per cent of the fuel that would be consumed by road movement.

"In addition to this, consider the fact that in cases of cargoes like coal and iron ore, large quantities are required to be transported, which cannot be handled by road or rail modes because of their limited capacity and infrastructure.

For example, Indian Railways probably would not be able to supply the 20,000 tonnes of coal required by Tuticorin thermal power plant in such a short span of time as two days. Ships, on the other hand, can handle such large quantities easily," Mr Rangnekar pointed out.

What needs to be done to boost coastal shipping? The TCS report feels that funds to the extent of Rs 185 crore may be provided by the Centre to develop basic infrastructure at the nine minor ports of Gopalpur, Cuddalore, Vizhinjam, Azzhikal, Malpe, Karwar, Ratnagiri, Dharamtar and Magdalla on both the coasts.

The development of these ports would include capital dredging and construction of breakwaters, berths and wharves. "This would attract significant private sector interest to operate on lease or joint venture basis," the report says.

In addition to these ports, the Kakinada Deep Water port (operated by Kakinada Seaports Ltd), the Pipavav port (operated by Gujarat Pipavav Port Ltd) and Mundra port would also facilitate coastal movements along both coasts.

Connectivity, doubtless, is an important factor for development of coastal trade.

With the on-going schemes for development of roads such as the Golden Quadrilateral and East-West and North-South corridor projects, it will be relatively easier to connect these ports to the nearest points on the highways.

Analysts feel that for a start the Government can consider diverting its own cargo as also that of its agencies to coastal shipping to the extent feasible. Also, such steps as reduction of maritime dues and wharfage on coastal vessels by 50 per cent and providing concessional cargo-related charges for all coastal cargoes could give the much-needed fillip to this sector.

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