Cargo companies to get sops for taking sea route

HYDERABAD: The shipping ministry on Wednesday approved incentives to boost coastal shipping of goods to encourage manufacturers and cargo operators to shift from rail and road to coastal shipping. The fiscal incentives, which will cost the government about Rs 300 crore, are seen augmenting the amount of cargo transported by sea by at least 25% to 200 million tonne by 2017, said Captain PVK Mohan, chairman of National Shipping Board.

Manufacturers of steel, cement, fertilizers, sugar, automobiles and commodities as well as cargo operators will receive cash incentives for diverting to coastal shipping from rail and road. “A formal announcement on the incentives will be out through a gazette in the next few weeks,” Mohan told reporters here on Friday.

Consultancy firm KPMG was hired to study the cargo movement in the country through rail and road routes and suggest measures to shift the cargo towards inland waterways and coastal shipping, he said. India has a 7,500-km coastline, with around 200 minor and major seaports spread over nine maritime states, but coastal shipping accounts for only around 7% of cargo movement, one of the lowest in the world. Under the new plan, bulk cargoes will be eligible for 50 paisa per tonne per nautical mile of incentive with loading ports administering the incentive.

Mohan said the rebate would be Rs 1,000 per TEU (twenty-foot equivalent unit) in terminal handling charges at both ends in case of coastal container cargoes. The ministry has also agreed to increase the rebate on vessel-related and cargo-related charges at the ports to 60% from the existing 40%, with the government will reimbursing the difference of 20% to the ports. Mohan said the government has also advised state-owned enterprises such as Steel Authority of India and Rashtriya Ispat Nigam to significantly shift to coastal shipping for movement of steel products.

Further, the government has also advised the seaports to develop dedicated infrastructure to cater exclusively to coastal cargo movement.