'Infrastructure development, reduction in transaction cost key to make ports competitive'

Ports on the east coast have a bright future ahead of them, as India’s trade with China and other Asian countries is increasing substantially thanks to the look-east policy of the Government, but the eastern states have to emulate Gujarat in developing ports and related infrastructure to make use of the emerging opportunities.

This was the conclusion arrived at by many speakers at the East Coast Maritime Business Summit organised here on Friday and Saturday by the Hyderabad-based magazine Maritime Gateway.

Many of the speakers pointed out that the performance of major ports on the east coast and west coast was more or less similar, but there was a vast difference in the number of non-major ports and their volumes on the east coast and the west coast.

The west coast, especially Gujarat, was far ahead of the east, and the gap should be bridged with concerted efforts by the eastern states.

Visakhapatnam Port Chairman Ajeya Kallam said the port had taken up several projects in the public-private partnership mode, currently being executed at a cost of more than Rs 3,000 crore.

In the next two phases, an additional Rs 10,000 crore would be invested for taking the capacity of the port to 130 million tonnes per annum by 2016-17 from the present 70 mt. He said Visakhapatnam would also be developed as a container hub.

Shipping Corporation of India CMD Sabyasachi Hajara said he also agreed that the future of eastern ports was very bright, but infrastructure should be developed and the transaction cost should be brought down substantially for the Indian ports to be competitive.

He exhorted other states to follow Gujarat. He also expressed the need for the formulation of a national integrated logistics policy and added that “many policy interventions are needed to develop inland waterways and coastal shipping.’’

As the number one carrier, he said SCI would play its part in the development of eastern ports.

Krishna B. Kotak, Chairman of J.M Baxi & Co, said the Union Government had invited private investment in port development after the liberalisation in the nineties, but it had not kept many of the promises and developed the port-related infrastructure. As a result, many of the investors had lost heavily and they are now wary of investing in Indian ports.

He said the cost factor was crucial and the Government should formulate the right kind of policies and keep its promises. Otherwise, the massive investments needed for port development may not be so readily available.

Former Union Shipping Secretary K. Mohan Das said funds would not be a problem for the port projects, if the projects were viable. “There may be some temporary difficulties now because of the global recession. But things will improve and I am confident of a great future for the eastern ports,’’ he added.

(This article was published on September 22, 2012)
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