​​​
  1. Sagarmala agenda: A host of factors hit coastal shipping and inland waterways project

Sagarmala agenda: A host of factors hit coastal shipping and inland waterways project

When Link Shipping and its partner Symex Maritime Singapore shipped cars on a special category Pure-Car-Truck-Carrier (PCTC) vessel in early February, 2016, it was considered a signal move towards the use of coastal shipping as a cheap transport option by auto and other industries.

By: | Published: December 18, 2017 1:18 AM
Maritime, Pure-Car-Truck Carrier, inland waterways project When Link Shipping and its partner Symex Maritime Singapore shipped cars on a special category Pure-Car-Truck-Carrier (PCTC) vessel in early February, 2016, it was considered a signal move towards the use of coastal shipping as a cheap transport option by auto and other industries.

When Link Shipping and its partner Symex Maritime Singapore shipped cars on a special category Pure-Car-Truck-Carrier (PCTC) vessel in early February, 2016, it was considered a signal move towards the use of coastal shipping as a cheap transport option by auto and other industries. For the first time, 800 Hyundai cars were moved from Chennai port to Pipavav on the west coast. However, while Hyundai Motor India (HMIL) has moved a total of 12,805 cars through the route since then, the coastal initiative has not gained traction with other auto manufacturers, as the government was hoping for under the Sagarmala programme. Although water-borne transport is a much cheaper — transport of coal by coastal shipping costs one-sixth of rail — and environment-friendly option compared to other modes, it accounts for only 6% of India’s modal split. By comparison, coastal and inland water transport contribute to 47% of China’s freight modal mix, while in Japan and the US, it is 34% and 12.4%, respectively. The constraints on connectivity and the sub-optimal modal mix result in higher logistics cost in India.

In October this year, Ashok Leyland (ALL) was driven to the sea route, not because it was cheaper, but because of a problem that hindered its road options. ALL has made two voyages with 185 trucks to Mongla Port in Bangladesh. “Border crossing has been taking additional time and we had to park the trucks, costing us money,” a senior ALL official tells FE. Facing the same issues, Tata Motors sent 240 trucks from Kolkata to Bangladesh in late November and is planning another voyage soon.  According to Arvind Tembhurne, VP at Sirocco Partners, although the Ministry of Shipping is promoting coastal shipping, issues like handling and transportation costs, port delays, shortage of suitable vessels and mechanical handling equipment and slow handling of cargo traffic at the ports are yet to be addressed.  Industry insiders say wharfage, handling and other charges ensure the sea route works out to be 15-20% costlier than road at present.

Although the ministry had announced 80% concession on wharfage and vessel-related charges at major ports for vessels carrying automobiles, V Anand, senior general manager at HMIL, says this is yet to be streamlined. “Individual ports had given these concessions until the last fiscal. If the ministry facilitates a flat rate for wharfage and fixes a concessional vessel calling rate on the gross registered tonnage at all major ports for at least three years, coastal shipping can be viable,” he points out. The Sagarmala programme aims to raise the contribution of coastal shipping and inland waterways to domestic cargo movement from 6% to 12% by 2025. Of the 415 projects identified under it, 253 with an estimated cost of `1,23,000 crore are supposed to be executed by March, 2018. However, the reality is different, Tembhurne says.

“Very few projects are under implementation stage, and these too, are being executed by government agencies and not under the public-private-partnership (PPP) mode as was being spoken of. The fact that information on Sagarmala is not publicly available perhaps has to do with this delay,” he adds.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Go to Top