National Maritime Development Programme Putting port infrastructure on fast channel

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Raja Simhan T.E.

ON THE heels of the Golden Quadrilateral and the North-South and East-West projects that are expected to vastly improve connectivity in India, comes the Rs 61,000-crore National Maritime Development Programme (NMDP) to boost infrastructure at major ports in the next ten years.

Under the NMDP, 228 projects have been identified for implementation in two phases through public-private partnership. By identifying specific projects and other measures, the NMDP will over the next 10 years give a concrete shape to the vision and strategy of the National Maritime Policy, says a note from the Union Ministry of Shipping, Road Transport and Highways.

"Creation of additional capacities in ports has for long remained neglected . Though a bit late, the NMDP should improve the port sector by creating additional facilities to handle the growing traffic," said a source in the maritime industry.

Under the NMDP, public investments will be primarily for common user infrastructure in the ports such as deepening and maintenance of port channels, construction of breakwaters, internal circulation systems of cargo within ports, and rail and road connectivity from ports to the hinterland. Private investments will be in areas where operations are primarily commercial such as construction, management and operation of berths/terminals.

According to the Ministry, the traffic is likely to grow at all ports at a compounded annual growth rate of 7.69 per cent; the CAGR for traffic at major ports was 7.43 per cent and non-major ports 8.47 per cent. The highest CAGR has been in container traffic, at 18.31 per cent.

To meet the projected traffic of 705.84 million tonnes to be handled by 2013-14 at major ports, a capacity of 917.59 million tonnes has been estimated. According to the Ministry note, this means in the next ten years additional capacities of 528.09 million tonnes would have to be created; the current port capacity is 389.5 million tonnes.

The major ports were asked to identify projects that would meet the demands of a growing international traffic and to bring their facilities on a par with world standards. Most ports categorised their projects with the fund requirements and the financing pattern under the five broad heads of development process as:

  • Projects related to port development (construction of jetties, berths, so on),
  • Procurement, replacement or upgradation of port equipment,
  • Deepening of channels to improve draft,
  • Projects related to port connectivity, and
  • Other related schemes.
  • The investment envisaged for these projects is estimated at Rs 61,000 crore. Of this, Rs 39,238 crore has to come from the private sector, Rs 11,445 crore through budgetary support and Rs 5,078 crore from port trusts' internal resources.

    This investment includes the requirement of funds on the rail and road connectivity for which Rs 4,575 crore has been earmarked (Rs 1,898 crore through the Railways; Rs 1,072 crore through joint ventures with ports, the National Highways Authority of India or the State governments concerned, and Rs 1,640 crore through joint ventures formation with ports, the NHAI or State governments).

    According to the Ministry, the Government has fixed an export target of $150 billion by 2008-09 to double the country's share in world exports from 0.8 per cent to 1.5 per cent.

    About 95 per cent of volume and 70 per cent by value of India's international trade is carried through maritime transport.

    The country has 12 major ports, six each on the west and east coasts and about 45 non-major and private ports.

    Till 2000-01 most ports were operating beyond or close to their handling capacities, resulting in high pre-berthing detention and longer turnaround time of vessels.

    However, for the first time, the aggregate capacity in major ports exceeded the cargo handled in 2000-01 as the capacity achieved a level of 291.45 million tonnes against 281.11 million tonnes of cargo handled.

    This continued in 2003-04, as the capacity created in the ports as on March 31, 2004 was 399.5 million tonnes against the traffic of 344.8 million tonnes.

    The CAGR of traffic at major ports during 1950-51 to 2003-04 was 5.51 per cent, whereas post-liberalisation (1991-92 to 2003-04) it was 6.74 per cent.

    If the CAGR of traffic growth at major ports is taken into consideration for the recent years, it has been 9.50 per cent during the last three years.

    (This article was published in the Business Line print edition dated August 22, 2005)
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