Focus now on port led-industrialisation: Sagarmala Development

Sagarmala Development Corporate Ltd to shift focus on port-led industrialisation to get cargo to ports than looking at new projects. “With infrastructure lying idle at ports, it has been decided not to look at projects to add more capacity at ports. The focus is more port-led industrialisation, which in turn will get cargo to ports,” according to a senior official of the three-year old Sagarmala Development Corporate Ltd (SDCL), which assists Central/State/port level/private sector Special Purpose Vehicles with equity support for projects to be undertaken by them.

While the government in the past had acted fast in creating capacity at ports, the utilisation has been quite low due to wanting of cargo, said Dilip Kumar Gupta, Managing Director of SDCL, which is a $110 billion coordinated effort across over 60 agencies for over 600 identified projects. The potential logistics cost savings identified were ₹35,000 to ₹40,000 crore per annum by 2025 under Sagarmala programme, he added.

“We are now not in a mood to increase port capacity further but to give a push to industrialisation that in turn will help in better utilisation of port infrastructure,” he said at the third edition of the CII Port Conclave 2019 organised by the Confederation of Indian Industry.

Port capacity

For instance, in 2014-15, the total annual capacity at ports was 860 tonnes (at both major and non-major ports), and then the overall utilisation was nearly 75 per cent. However, in 2018-19, the port capacity was 1,514 tonnes per annum but the utilisation is only 53 per cent. There is now sufficient capacity to cater to future traffic even at 10-15 per cent growth rate for the next 4-6 years, he said.

The challenge now is on how industrialisation can be given a boost and CII as a forum could suggest to the government where and how to intervene in this,” he said.

Gupta said under port-led development the four pillars are - port modernisation, port community, port-led industrialisation and coastal community development. The focus is on optimising cost and time of cargo movement to enhance the competitiveness of Indian industries through port-led industrialisation.

Till date four projects worth ₹205 crore - Krishnapatnam Rail Company (₹125 crore) for port connectivity; Indian Ports Global (₹10 crore) for new port development; ROB at Haldia port (₹50 crore) for port connectivity and Vizag Road connectivity (₹20 crore) for port connectivity - have been completed. There are ten more projects under activity evaluation, he said.

Chennai Port Trust at Jolarpet

On the off-site facility plan of the Chennai Port Trust (ChPT) at Jolarpet , Gupta said, this project is unlikely to take off as the Railways wants more price for the land. While initially it was agreed for ₹32 crore, the Railway now offers it at ₹86 crore. This makes the project it unviable, he told media on the sidelines of the two-day conclave. “We have asked the ChPT to look at an alternate land parcel,” he said.

In January 2018, the ChPT proposed the Jolarpet project to be set up in railway land near Jolarpet junction about 225 km from Chennai en route Bengaluru. Southern Railway had given its in-principle approval for the project, which needs 55 acres.

The facility was planned like a container freight stations where clearances will be handled and cargo transported by train directly from Jolarpet to the Chennai port to be on board a container ship. Similarly, customers can take delivery of import containers from Jolarpet.

Sunil Paliwal, Chairman and Managing Director, Kamarajar Port Ltd (KPL), said the port plans would offer 187 acres on port-led industrialisation. Soon KPL will work out on how to parse out to various industries, said Paliwal who took charge as CMD of KPL a week back.