Port sector wades through rough waters in 2008

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New Delhi: With the global economic slowdown crippling growth and taking a toll on the freight traffic in the ports and shipping sector worldwide, the domestic shipping and port sector had to wade through turbulent waters in the year 2008.

The year was marked by slow pace of growth in the UPA government’s flagship plan for the sector —National Maritime Development Policy (NMDP), which envisages an investment of Rs 55,000 crore to upgrade 12 major ports in the country by 2012.

NMDP focuses on dredging, equipment and berth development, which is being done on public-private partnership basis.

Of the 276 originally approved projects worth around Rs 55,000 crore, only 36 could only be completed, 65 are under construction and 29 are under various stages of approval. In all, projects worth Rs 20,000 crore are currently underway, less than half of the investment envisaged in the sector. Also, another 29 projects were dropped owing to the projects being not feasible and are also being redesigned to attract investors.

This means only 50% of the projects envisaged under NMDP by physical number and 40% of the projects in terms of investment could be achieved.

Also, during the current financial year, the department of shipping planned to give out 10 berths. However only two of the projects, worth Rs 1,008 crore, have have been approved by the Public-Private Partnership Appraisal Committee (PPAC), by October this year. The two projects—a Rs 467 crore deep-drought coal berth and a Rs 541 crore deep drought iron ore berth — will come up at the Paradip port on a build-operate and transfer basis. The port serves the hinterland spread over the states of Orissa, Jharkhand, Chhattisgarh, West Bengal, Madhya Pradesh, Uttar Pradesh and Bihar.

Speaking on the NMDP, Neeta Ramnath, Feedback Ventures said, “The major problem with the NMDP is the inconsistency in the policy apart from focus on vital issues such as rail connectivity, coastal shipping and inland waterways.”

Enumerating the inconsistencies she said, “The reason why Ennore port came up was to free the Chennai port, which is in the midst of the city, from dirty cargo like iron ore, and coal. However, now container and cargo terminals are coming at the Ennore port, thereby jeopardising the entire logic of having another port for dirty cargo.”

“NMDP is not looking at the entire port sector as a whole but only the major ports,” she added.