How Maharashtra looks to cash in on location, beat Gujarat

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New Delhi | Published: June 22, 2016 6:01:07 AM

This might change if the policy framework put in place by the state government translates into change at the ground level. Spurred by the Union government’s agenda to make India a manufacturing hub, the BJP-led government in Maharashtra came out with a new policy for the maritime sector in January, aiming to turn its ports into trade gateways that can support the growth of the manufacturing sector.

For a state that has the second-longest coastline (720 km) among maritime states in India, Maharashtra is yet to capitalise on its strategic location on the Indian map. Nothing illustrates this better than the fact that besides its two major ports—Jawaharlal Nehru Port Trust (JNPT) and Mumbai Port Trust—just 12 of the state’s 48 non-major ports handle cargo at present.

This might change if the policy framework put in place by the state government translates into change at the ground level. Spurred by the Union government’s agenda to make India a manufacturing hub, the BJP-led government in Maharashtra came out with a new policy for the maritime sector in January, aiming to turn its ports into trade gateways that can support the growth of the manufacturing sector.

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While the state introduced a maritime policy back in 1996, revising it in 2000, 2002, and 2010, past efforts have failed to harness the sector’s potential, with many projects failing to take off or work being stalled because of issues faced by private players.

The new policy aims to fast-track clearances and project execution by making the Maharashtra Maritime Board (MMB) the nodal authority for the purpose. To enable integrated development of the sector, the government intends to provide impetus to sub-sectors such as shipyards, inland waterways, coastal shipping, and port-based industries. To further private sector participation, the government is taking steps to ensure transparency and fairness in award of projects and enhance their viability.

For providing connectivity to ports, a company called Maharashtra Port Connectivity Corporation would be formed within the purview of MMB. Atul Patne, CEO, Maharashtra Maritime Board told FE the policy focusses on connectivity between existing and new ports and the hinterland as it would encourage growth of the automobile industry in cities like Aurangabad, Nashik, Pune. Efforts are also being made to cut down on the time taken to transport horticultural and floricultural produce. “Our effort is that mango plucked in Ratnagiri at 8 am should reach Mumbai by 4 pm. Today it takes more than 14 hours as it is transported by road,” he says.

Apart from the port-led economy, which will include industrial parks, SEZs, etc. there would be focus on developing tourism hotspots. “The idea is to have an integrated model which will focus on passenger traffic as well,” Patne says. If things go as planned, MMB expects the current volumes of cargo and passenger traffic—29 million tonnes (non-major ports) and 18 million, respectively, in 2015-2016—to increase at least “3 times in the next four years”.

Industry experts have given a thumbs-up to the plan, particularly as Maharashtra has taken the lead in synchronising the development of ports and industrial zones.“Ports are capital intensive projects and therefore monetisation of traffic is essential for making projects viable. Since ports have captive traffic, industries coming up around the port area will benefit from it,” says an official from a global consultancy firm.

Work on a few projects has been under way. In June last year, the Jawaharlal Nehru Port Trust (JNPT) and MMB signed an agreement to develop a new major port at a cost of

R6,000 crore at Dahanu taluka, off Vadhwan point. The development of this port assumed significance as JNPT would be fully saturated after the commissioning of the Fourth Container Terminal.

Another port is coming up at Karanja creek in Raigad district. Having been awarded to SKIL Port and Logistics Ltd, the foundation for Karanja port was laid in December 2015. The terminal is expected to be used for defence logistics, oil and gas logistics support, and general cargo.

There are three more ports in the pipeline: Rewas-Aware in Raigad district, and Vijaydurg and Redi in Sindhdurg district (all with private sector participation). These await clearances. Indeed, Maharashtra has to move fast given that neighbouring

Gujarat aims to double its existing port capacity of 480 million tonne to 1 billion tonne by 2020—Gujarat handled 336 million tonne of cargo in FY15 as against Maharashtra’s 153 million tonne.

Patne, however, says the comparison is unfair. “Gujarat gets a lot of cargo from the northern states of Rajasthan, Uttar Pradesh and Gujarat itself. Down below, all the southern states are sea-facing; therefore, our cargo volumes may not be of that magnitude. It is passenger traffic and tourism related development that will be our USP in the future,” he sums up.

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