Sagarmala Project , Water Transport
(May 24, 2016)

Introduction:

Indian ports and coastal regions are set to witness a sea change, thanks to the ambitious Sagarmala project mooted by the Centre.

What is it?

The Sagarmala is a series of projects to leverage the country’s coastline and inland waterways to drive industrial development. It was originally mooted by the Vajpayee government in 2003 as the waterways equivalent of the Golden Quadrilateral. Sagarmala, integrated with the development of inland waterways, is expected to reduce cost and time for transporting goods, benefiting industries and export/import trade.

One-Two-Three-Four (Impact)

The project is mammoth with 150 initiatives with a total outlay of ₹4 lakh crore, spread across four broad areas. One, modernise port infrastructure, add up to six new ports and enhance capacity. Two, improve port connectivity through rail corridors, freight-friendly expressways and inland waterways. Three, create 14 coastal economic zones or CEZs and a special economic zone at Jawaharlal Nehru Port Trust in Mumbai with manufacturing clusters to enable port-led industrialisation. Four, develop skills of fishermen and other coastal and island communities.

Implementation:

To implement this, State governments would set up State Sagarmala committees, headed by the chief minister or the minister in charge of ports. At the central level, a Sagarmala Development Company (SDC) will be set upto provide equity support to assist various special purpose vehicles (SPVs) set up for various projects.

Why is it important?

India is located along key international trade routes in the Indian Ocean and has a long coastline of over 7,000 km. Yet, capacity constraints and lack of modern facilities at Indian ports tremendously elongates the time taken to ship goods in and out of the country and has held back India’s share in world trade.

Developing rivers as inland waterways can also help save domestic logistics costs too. Transport costs are high in India – 18 per cent of GDP, compared to less than 10 per cent in China.

Employment Generation:

Port infrastructure and linkages have been frankly a sinking ship and initiatives such as Make in India cannot take off without better port infrastructure. This has led to expectations that Sagarmala could boost India’s merchandise exports to $110 billion by 2025 and create an estimated 10 million new jobs (four million in direct employment).

Such a project looks promising, going by the example of Shenzhen in China. Since 1978, it helped create an estimated seven million jobs and the city’s GDP grew 50 times to $180 billion after the development of ports. If Indian port development takes off similarly, local and foreign funds would flow in and coastal regions may become good bets for real estate too, as they will see industry and job growth. Logistic costs savings of over ₹35,000 crore per year can also help the Centre spend on development and possibly reduce taxes.

The bottomline

There is lots of moolah in Sagarmala if we know how to ride this wave.

Note:

• The Union Ministry of Shipping has been appointed as the nodal ministry for this initiative.
• Major ports are controlled by the central government (the Central Shipping Ministry) and minor ports by state governments (ministries in nine coastal states).
• 9 coastal states of India are shown below:

12 Major ports:

More facts:

• Kandla Port is located on the Gulf of Kutch. It is the largest port of India by volume of cargo handled.
• Ennore Port, officially renamed Kamarajar Port Limited,  is the only corporatised major port and is registered as a company.
• Max minor port= Maharashtra, 2nd=Gujarat
• Enayam (Tamil Nadu) will be 13th major port (received in principle approval). Special Purpose Vehicle (SPV) known as Indian Port Rail Corporation (IPRC) has been established under companies Act, 2013 to fund Port Rail connectivity.

Source: Business Line