Government eyes Rs 25,000 crore annual savings through coastal shipping

NEW DELHI: Government is eyeing annual savings of Rs 25,000 crore on logistics costs by 2025 by promoting coastal shipping under its ambitious Sagarmala project.

Sagarmala aims at promoting port-led development by harnessing the country's 7,500-km long coastline, 14,500-km of potentially navigable waterways and strategic location on key international maritime trade routes.

"Across all commodities, coastal shipping volumes could grow to 5-6 times of current levels to about 400-480 million tonnes (MT) by 2025. This would save logistics costs of about Rs 25,000 crore per annum," a blueprint on Sagarmala unveiled by the government said.

Coastal shipping volume at present is about 80 MT.

Logistic costs account for a large part of the country's non-services GDP compared to benchmarks of 8-10 per cent for developed nations, it said.

Citing an example, it said upto 100-150 MT of coal can be moved from the east coast to coastal power plants in Andhra Pradesh, Tamil Nadu and Karnataka.

In addition, up to 50 MT could be moved coastally for non-thermal coal users.

"There is potential to move steel, cement, fertilisers and foodgrains coastally to the extent of about 60 MT by 2025. Further, about 50 MT of petroleum products could be moved coastally from refining centres in Gujarat and Odisha to demand centres in Tamil Nadu and Andhra Pradesh," it said.

Government has identified over 150 projects under Sagarmala. It expects to mobilise more than Rs 4 lakh crore of investment, besides creation of 1 crore new jobs, including 40 lakh direct jobs, in the next 10 years.

These projects have been identified across the areas of port modernisation and new port development, port connectivity enhancement, port-led industrial development and coastal community development.

The Cabinet approved Sagarmala project last year.