New govt measures spur Sagarmala implementation

It’s been seven years since the ambitious Sagarmala programme — pet project of the Narendra Modi government in the maritime sector — was launched. It’s been slow and steady progress so far. Out of the 802 projects worth ₹5.48 lakh crore — to be executed by 2035 —a total of 202 worth over ₹1 lakh crore have been completed. Project overrun and lack of financial support have affected the pace, not to mention the pandemic.

However, a slew of measures, including financial support to projects and operationalisation of Major Port Authorities Act 2021, is likely to speed up the pace of implementation in coming years.

A total of 29 projects worth ₹45,000 crore have been successfully implemented under Public-Private-Partnership (PPP) model, thus reducing financial burden on the exchequer.

There are 218 projects worth ₹2.12 lakh crore under construction and expected to be completed in two years. This apart, 390 projects worth ₹2.37 lakh crore are under development, said Sarbananda Sonowal, Union Minister of Ports, Shipping and Waterways, recently.

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Sagarmala was launched in March 2015 to achieve port modernisation and new port development; port connectivity enhancement; port-led industrialisation and coastal community development. It identified opportunities to reduce overall logistics costs to improve the economy's efficiency and increase export competitiveness.

The most visible success was the decline in turnaround time for containers at ports to 26.58 hours from 44.70 hours in 2013-14, said a senior official in the Shipping ministry.

To help projects stuck due to lack of finance , contribution up to 50 per cent of the cost is given under Sagarmala scheme. Systematic pipelines of over 40 PPP projects and funded projects have been created for the next five years, he said.

With the use of coastal infrastructure, distance between end points is reduced by five times. In line with the success of the ferries between Ghogha and Hazira in the Gulf of Cambay and Mumbai–Mandwa in Maharashtra, around 40 projects have been undertaken for public/urban water transport. These ferries have benefitted over seven lakh passengers and around 50,000 vehicles and trucks, the official added

A Balasubramanian, Project Financier and PPP Lawyer with maritime focus, said that Sagarmala, with focus on multimodal connectivity developed into a competitive logistic model for each commodity. The thoughtful addition of coastal economic zones and coastal employment gave a human face to market reforms.

There have been challenges in converting the strategic intent into an attractive business model for the private sector. Also, the programme had to contend with inter-departmental legacies, differing State government priorities and competing demands of non-major ports. Amidst these headwinds, the progress achieved is significant in the strategic sense of enhancing India's trade competitiveness, he said.

Sai Krishna, Assistant Vice President, Sector Head, Corporate Ratings, ICRA Limited, said that while pace of execution has been slow, it is expected that with several policy measures undertaken, including the operationalisation of Major Port Authorities Act 2021, there should be some traction in project execution going forward as major ports will have more flexibility with regards to decision making and tariff setting.

The new tariff guidelines for PPP projects at Major Ports allows for market-based pricing, which should also help in attracting investments, he said.

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