The Hindu Business Line : Sea and air transportation — Why India, China will be Asia's giants

AS one travels through the South-East Asian countries, one gets the impression that in both sea and air transportation India and China are going to lead the other nations in the region.

Asia, according to one estimate, will handle 206.7 million TEUs, including 64 million TEUs in transhipment by 2011. This will require large investments, an estimated $30 billion, in creation of new port facilities. Over 400 new container berths will have to be constructed to meet the rising demand.

With 11 Asian ports already being among the world's top 20 ports and accounting for 46 per cent of the world's total containers handled (in terms of the TEUs), Asia remains the dominant players in the global shipping. Till 2007, the container trade in Asia is projected to grow at an annual average rate of 7 per cent.

Worldwide, the container traffic is projected to grow from 87.1 million TEUs last year to 94.4 million TEUs this year and to 104 million TEUs by 2005. By 2010, the figure is expected to jump to 400-450 million TEUs and further to 510-610 million TEUs in 2015.

Led by India and China, Asia's shipping trade during the period is expected to grow sharply. Riding on the back of economic boom and growing trade with the US, China has already emerged as the world's second largest container market while India, according to many, has the potential to emerge as one of the top three. Some analysts prefer to call the country a "sleeping Bengal tiger" that will roar when it awakens.

The emergence of the two nations as two major container markets, it is however felt, will not be a threat to the region; instead, they will boost the intra-regional trade and growth of several Asian ports. The volume is growing and the growth will be large enough to benefit every body.

Among other countries in the region holding out the big growth potential are Malaysia, Indonesia and Thailand. Malaysia's two ports, namely, Port of Tanjung Pelepas (PTP) and Port Klang are already doing exceptionally well. Last year, the PTP handled 3.5 million TEUs, expected to cross the 4.5 million TEU mark in 2004. Port Klang handled 4.8 million TEUs, expected to break the five million TEU mark in the current year. Maersk Sealand International, the key player in PTP, views Thailand and Vietnam as high growth markets while Indonesia's potential, it is felt, is dampened by its weak security enforcement.

Security remains the big concern. Till recently, the security issue was underplayed by both shippers and shipping lines. Not anymore. With the recent rise in the number of armed piracy and ransom demands for the release of ships' crew, the fears of disruptions to global trade by terrorist attacks in international shipping in the Malacca Strait are growing.

Every year 50,000 ships carrying half the world's oil supply and a third of the global trade pass through the Strait. At the insistence of the US, three nations that straddle the Malacca and Singapore Straits, namely, Singapore, Malaysia and Indonesia, have launched coordinated patrols in both the straits.

The next step should be to move from coordinated patrols, in which each navy patrols its own territorial waters, to joint patrols. The key issue is whether hot pursuit by the navy of one nation into the territorial waters of the other nation to apprehend pirates would be permitted. Arguing territorial integrity, Malaysia has ruled out joint patrol.

Early this month, Singapore hosted the annual international maritime and port security conference, the second since the first conference was held there in January this year.

The July 1 deadline for the implementation of the ISPS (International Ship and Port Facility Security) Code is gone and the feeling is that the industry has done well with the compliance.

The second Singapore conference, therefore, tackled the post implementation concerns and assessed security at ports, onboard ships and within the broader transport chain. It also looked at further enhancing maritime security beyond the ISPS Code through development of other security measures, international cooperation and application of technology.

Meanwhile, India has been asked by Thailand and Singapore to ease restrictions on foreign airlines and allow greater access for foreign carriers.

Last year, the Vajpayee Government had pledged to ease rules for national carriers of ASEAN countries to let them fly to four of India's largest cities and 18 smaller cities.

Picking up the threads, the Prime Minister, Dr Manmohan Singh, during his recent visit to Bangkok was quoted as saying that Thailand and Singapore would like India to improve upon those terms and the Indian Cabinet would discuss the issue to evolve a broad consensus as to how to go about it.

The eagerness of the ASEAN countries to enter the Indian sky is understandable.

Citing the Indian Civil Aviation Ministry's projections that the number of passengers using India's airports will more than double to 85 million by 2017 and the cargo traffic too will grow six-fold in next two decades, the national carriers of ASEAN countries express the view that India's fastest economic growth in 15 years would spur travel demand in the world's second most populous nation.

"India will be our future jackpot", the Thai Airways President has been quoted as saying.

Air Asia, South East Asia's pioneer no frills carrier, is believed to have set its sights on both Chinese and Indian markets. Negotiations with the Chinese authorities concerned have begun while right policy announcements from the Indian authorities are awaited.

As the prospect of a free trade area encompassing the Bay of Bengal region brightens following the recent successful meeting of the BIMSTEC in Bangkok, air travel as well as transportation of cargo by air in the region is expected to expand tremendously.

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