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.

With the freight volumes coming down due to the global economic slowdown, the shipping sector had to negotiate turbulent waters as well . Shipping minister TR Baalu, in the last session of Parliament, agreed that the Indian industry was coping with continuous decline in the ship freight on the international waterways since October this year.

?Shipowners are receiving returns far below break-even levels for their vessels. Ship freight on international waterways have been declining for the last three months in the liner as well as the dry bulk sector. In general, the decrease ranges between 50% and 70% from the Indian sub-continent to Far East, Middle East and Europe. Similarly, freight is also declining on the return legs ranging from 35-40%,? Baalu informed Parliament this month.

On the reasons behind the fall in the freight, Baalu, apart from attributing it to the global economic slowdown said, ?China, a major engine for growth has a large stockpile of iron ore and coal. The prices of major traded commodities like iron ore, steel and other ores, metals have declined due to lack of demand. In tanker trade, the reduction in fuel prices and fall in demand has been a major factor.?

Immediately after Baalu?s acknowledgement of turbulence being faced by the shipping sector on freight issue, the department of shipping came demanded a stimulus package for the sector.

The department pitched for a stimulus package to execute nine major ports via public private partnership model, which envisages investments worth over Rs one lakh crore.

?We have asked for the special package for the first time in view of ongoing meltdown for the dredging at nine major ports in addition to relation on taxation for the sector, which is highly taxed,? said a top department official while placing the demand. The department a large part of the stimulus package to address the needs of state-level ports as they do not have funds for dredging operations.

However, amid these turbulences, a major move by the department of shipping was its plan to hike the cap on new infrastructure investments that major ports can make from their own reserves for speedy implementation of projects under NMDP. As per the plan, the department will increase the investment a major port can make on its own by 10 times to Rs 500 crore. As of now, the ports can invest not more than Rs 50 crore from their reserves. The proposal is under consideration of the ministry and is expected to be approved soon. Welcoming the move, a chairman of a major port said, ?The initiative will help us save time and implement the projects faster on our own.?

A major challenge that the sector had to reckon with in the current year was upgrading security at the various ports in the wake of terror attacks in Mumbai. Post the attacks, the department of shipping asked the directorate general of shipping to conduct the security audit of all the major ports. Also, the major ports were asked to acquire two speed boats to patrol their respective areas of operations in addition to sending their requirements for enhanced presence of Central Industrial Security forces. In addition, the smaller ports, 187 in number, through out the country?s coastline were asked to take similar initiatives and also register all the fishing boats operating in their territory.