Shipping ministry planning to revive non-functional ports

NEW DELHI: The shipping ministry is formulating a plan to revive several of the country’s 133 nonfunctional ports as part of a move to encourage traders to use India’s vast 7,500 km coastline for transporting local freight.

The ministry has prepared a concept note for forming special purpose vehicles by Shipping Corporation of India and Dredging Corporation of India with state governments and private operators, said an official privy to the development.


Most of these ports face dredging issues or lack terminal facilities. “This collaboration would be on a revenue share basis,” the official said, adding that the ministry is also looking to hire a private consultancy to study the scope of coastal shipping in India and ways of promoting it. The revenues from the port would be shared among the consortium partners in an agreed upon ratio.

The ministry is looking at developing five coastal ports in the next one year itself as part of the plan. To start with, Rs 30 crore per port would be provided by the government to kick start their development.

The remaining funds are likely to be provided by the state governments in order to provide connectivity to nearby state, national highway or railway station. Further expenditure on the port like maintenance dredging would be undertaken out of the revenues arising from port operations.

According to the plan, DCI would undertake dredging operations at the ports while SCI would berth three of its coastal container vessels, eachof 1,869 TEUs capacity, at the identified port to act as a “catalyst for other coastal vessels” to visit the port.India has 200 ports in all, of which only 67 are operational. Only 7 per cent of India’s domestic cargo is transported by coastal shipping even with a coastline of 7,500 km. In comparison, coastal shipping accounts for 20 per cent of domestic cargo in China and 42 per cent in Japan.

In India, the share of major ports and inland waterways as modes for evacuating cargo is a low 2 per cent, when it should ideally be 10 per cent. “Coastal shipping in India has immense potential, which has so far been neglected. This would be a very good initiative by the government in promoting the coastal movement,” said Vishwas Udgirkar, senior director, Deloitte India.

The government is keen on encouraging coastal movement, which is not just considered a safer, greener and cheaper mode of transport compared to rail and roadways but could also ease off burden on road and rail transport.

The government has already taken some steps to encourage coastal shipping and is expected to undertake more steps to give it a fillip.It has provided incentives to major ports for creation of exclusive berths to handle only coastal cargo instead of export-import traffic. It is also providing an aid of up to Rs 30 crore to major ports to set up dedicated coastal berths.