Budget 2017: Ports to get Rs 91,000-cr push

Budget may give shipping ministry Rs 2,500 crore to upgrade and develop ports

In a major push to the maritime sector, the Centre has planned port-modernisation projects worth Rs 91,000 crore, leading to the creation of a 3-billion-tonne port handling capacity by 2025.

To part-fund its various schemes, the shipping ministry is likely to get Rs 2,500-crore allocation in the Budget, slated to be presented on February 1. 

India’s port handling capacity in 2015-16 stood at 1,673 million tonnes per annum (MTPA). Official estimates expect the traffic at the major ports to touch 2,500 MTPA by 2025. Keeping in line with the need for a higher capacity to handle growing traffic at the 12 major ports, the government has planned massive capacity augmentation exercise, which it aims to achieve through modernisation and development.

According to global norms, the difference between port-handling capacity and traffic should be 25-30%, an official in the shipping ministry told Business Standard.

Various port traffic studies conducted by the Centre have pointed towards one holistic approach in terms of development of India’s 12 major ports — Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia).

Each port would be developed under a master plan on PPP (public-private partnership) basis, the official said.

According to the plan, 142 port modernisation projects would be executed in a phased manner at an investment of Rs 91,000 crore. The projects would be implemented in 20 years and would contribute an additional capacity creation of 884 MTPA.

According to the official, 72 projects, costing about Rs 35,000 crore, are under implementation.

Port development through master planning was envisaged by the central government after a series of deliberations with consultants. Also, during the study, it was found that import and export of certain commodities was more than others.

The first six months (April-September) of FY17 witnessed growth of 142.4% in cargo traffic of iron ore, as compared to the year-ago period, official data released by the ministry of shipping showed. Cargo traffic of petroleum, oil, lubricants (POL) increased 5.8%, followed by other cargo (4.6%) and container (0.7%), against the year-ago period.

In terms of composition of the cargo handled at major ports, the largest commodity handled in the period of April-September 2016 was POL (37.1%), followed by coal (23.4%), container traffic (19.6%), other cargo (11.9%), iron ore (5.66%) and fertilisers (2.5%).

The ministry has envisaged a spurt in cargo movement in the coming years as an outcome of growth in the manufacturing sector.

The port modernisation plan is part of the broader Sagarmala programme, under which the government announced building 14 coastal economic zones (CEZs) aligned to the relevant ports in the maritime states, including West Bengal, Andhra Pradesh, Odisha, Karnataka, Tamil Nadu, Kerala, Goa, Maharashtra and Gujarat.

The ambitious Sagarmala programme has four essential features — port modernisation, port connectivity, port-led industrialisation and coastal community development.

Besides Sagarmala, the central government also intends to build a robust network of inland waterways and has entrusted Inland Waterways Authority of India (IWAI) with the job.

IWAI plans to raise Rs 1,000 crore via issuance of bonds in two tranches in February and March to part-fund its projects.