The Hindu Business Line : `Participation of global players to be carried forward'

The Union Minister for Shipping, Road Transport and Highways, Mr T. R. Baalu, has affirmed India's "intention to carry forward the process" of allowing the participation of "global players" in the country's port-terminal operations. During his recent visit to Singapore, Mr Baalu said, in written answers to a questionnaire from Business Line, that South Korea's Daeju Group Holdings had now evinced interest in setting up the state-of-the-art shipbuilding and port development projects in India.

Excerpts from the interview:

Has India firmed up a new `maritime policy,' given that a Maritime Development Programme is now in focus? What are the more important specifics of the policy as envisioned?

The Government is in the process of firming up the policy for the maritime sector. The policy will focus on (the) coordinated development of major and minor ports; (the) strategy for development of port channels as also for improving hinterland connectivity; (the) promotion of competition in port services — both inter-port and intra-port (services) to improve delivery mechanism; (the) augmentation of shipping tonnage; (the) strengthening of maritime administration (and) bringing about structural reforms; (the) declaration of new waterways; (the) modernisation of navigational aids etc.

Please give an update on the Sagar Mala blueprint.

The Government has taken up the formulation of comprehensive policy for the maritime sector. The National Maritime Development Programme, which will include specific schemes/projects to be taken up over a 10-year period, is also under finalisation.

A total of 223 schemes/projects in major ports have already been identified for the Programme. These are proposed to be taken up for implementation in two phases. Total investment envisaged for the entire programme (including ports, shipping and inland water transport) is about Rs 100,000 crore.

What is New Delhi's assessment of Singapore's participation in the Tuticorin port project? Is India likely to sound Singapore out for any other port project, with particular reference to the Sagar Mala vision? Or, will the process be left entirely to the dynamics of international bidding?

The development of the port sector in India, since its opening to the private sector including foreign direct investment (FDI), has been impressive. The transparent and global bidding process, being followed for selection of private terminal operators, has led to the participation of some of the major, reputed, terminal operators in the development, management, and operation of terminals at our major ports. The entry of global players in terminal operations, including that by the Port of Singapore Authority (PSA) Corporation at the Tuticorin port, has contributed to increased efficiency and productivity. We intend to carry this process forward.

Have you received a positive response to India's call for FDI for the construction of two state-of-the-art shipyards for `very large vessels'? If so, what is the current state of play?

Daeju Group Holdings of the Republic of Korea (South Korea) has shown interest in investing, to the extent of 7.5-billion Korean won, in shipbuilding, port development, and the construction of apartment complex in India. The (South) Korean group, which is already managing two floating docks, has the capacity to build oil tankers, cargo boats, chemical tankers, fishing guide-ships, and pollution-control ships. It has expressed its intention to construct a shipyard in India with a building-capability of 25,000-tonne DWT.

The Maritime Boards in Gujarat, Maharashtra, and Tamil Nadu as also the Shipyards Association of India have been approached for providing information on suitable locations for the (proposed) shipyard, in keeping with the project requirements. A committee to be set up by the Department of Shipping will recommend suitable locations for the establishment of two large shipyards and also suggest modalities for calling (the relevant) Expression of Interest.

With the Shipping Corporation of India (SCI) having acquired `Desh Ujaala', is India going ahead with the proposed purchase of one more very large crude-oil carrier (VLCC) and two container vessels?

The SCI has acquired two VLCCs of 300,000 DWT each. Further, proposals from the SCI for the acquisition of two more VLCCs of the same capacity and (also) two container vessels — 4,300 and 5,000 TEU capacity — are under consideration of the Government.

Does India plan to engage Singapore, at the government-echelons or at the corporate level, for the establishment of `logistics hubs' in India?

India and Singapore recently signed the Comprehensive Economic Cooperation Agreement (CECA). This could be useful in developing supply-chains from India. Singapore is a known trading-hub. The transportation industry is one of the top sectors (in India) attracting FDI from Singapore. We also understand that there is considerable interest in Singapore for making investments in the infrastructure projects and special economic zones in India.

The preferred route for the participation of private entrepreneurs, including foreign parties, in (India's) port-development projects is through open competitive bidding. FDI up to 100 per cent, under the automatic route, is allowed in the maritime sector in India, and corporates from Singapore are welcome to participate in such bids.

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