Posted on April 12, 2023
The union ministry for ports, shipping and waterways has proposed giving infrastructure status to coastal shipping, a government priority. The status entitles a sector to several benefits and concessions, including cheaper bank loans. In an interview, the Union minister of ports, shipping and waterways, Sarbananda Sonowal, said the ministry is holding stakeholder consultations for developing coastal shipping in a public-private partnership mode.
He also said that stakeholder consultation is underway for proposed viability-gap funding (VGF) for coastal shipping—when ships move between ports within a country.
On the development of Chabahar Port, the minister said Iran and India are moving toward finalization of the amended provisions of the long-term contract. Edited excerpts:
There has been a major push on shipping and waterways. What has been the progress?
Our aim is to boost the performance and productivity of ports, shipping and waterways and to strengthen our position of eminence in the global maritime sector. Targets set out in Maritime India Vision-2030 provide a clear roadmap for bringing all-round improvement in port modernization and automation, coastal shipping, shipbuilding, ship repair, transition to renewable energy, increasing share of Indian seafarers across the globe, improving vessel turnaround time, developing transhipment hubs, cruise shipping and augmenting capacities at the major ports. Focus is also on developing and operationalizing inland waterways for improved connectivity and creating an environment for a positive modal shift from road and rail to waterways.
What steps can we expect in coastal shipping?
Coastal shipping shall be promoted as an energy-efficient, low-cost mode of transportation through PPP with VGF (Viability Gap Funding) support. A number of initiatives have already been taken by the ministry to promote coastal shipping. Facilities like dedicated coastal berths, priority berthing, cabotage relaxation to Ro-Ro/Ro-Pax vessels, concessions in berth and handling charges, and bunkering, among others, are already being provided to motivate all stakeholders to adopt coastal transportation for the transport of passenger and goods in the country. Ministry is proposing to include ‘coastal shipping’ as an eligible sector in the existing VGF scheme of the ministry of finance. The inclusion of coastal shipping as a sector in the ‘Harmonized List of Infrastructure’ is also being proposed. These steps will make the sector eligible for various concessions to enhance the overall viability of the sector and help in attracting cargo and passengers to this mode of transport.
What is the update on Chabahar port? Is a long-term agreement in place there?
The long-term agreement (10-year term) with the Iranian authorities was executed in the presence of Prime Minister Narendra Modi in Tehran, but it could not be activated due to subsequent modifications suggested by the Iranian side in certain provisions of the contract. The government has been making efforts to finalize and activate the long-term contract. Meanwhile, short-term contracts have been under execution, enabling us to operate the terminals. Recently, during the visit of the Iranian delegation to India (in January), the activation of a long-term contract was also discussed, and both sides have made substantial progress towards finalization of the amended provisions of the long-term contract. Once finalized, the long-term contract will be activated.
How are we moving towards making the country a global hub for manufacturing green ships? Will the initiative on tug ships impact the plan to develop large ships?
The financial support by means of the Shipbuilding Financial Assistance (SBFA) scheme for shipbuilding given to Indian shipyards by the government to make India a sought-after destination for technologically advanced green ships is the primary reason why Indian shipbuilding is competitive with international yards. The recent acquisition of new projects by Indian shipyards serves as proof of this. The orders have been received by Cochin Shipyards from several European clients, including Norwegian shipping entities.The ministry is also launching ‘Green Tug Transition Programme (GTTP)’, in ports starting with ‘Green Hybrid Tugs’ adopting Green Hybrid propulsion systems (using Battery+ Diesel Electric OR Battery+ Diesel Mechanical), and subsequently adopting non-fossil fuel solutions (Methanol, Ammonia, Hydrogen) to be built at Indian Shipyards. Tug-building projects will aid and probably complement the production of large vessels.
What is happening with the plan to develop mega ports in the country? Are we looking at attracting global investments in such projects?
A modern deep draft (20 metres) all-weather port has been sanctioned at Vadhavan. It will be located in Dahanu Taluka in Maharashtra. The port will be developed as a Land Lord model and shall have a capacity of 308 MTPA once completed and fully functional. The port will be developed by an SPV having JNPA and Maharashtra Maritime Board as members (with equity share of 74% and 26%, respectively). In-principle approval for the project was granted in February 2020. Basic infrastructure, including breakwater, reclamation, rail and road connectivity linkages, power, water lines, and common utilities, among others, will be developed by the SPV (Special Purpose Vehicle). Terminal operations & Cargo handling infrastructure shall be offered to Private agencies under PPP mode. The project is currently in the stage of obtaining NOC from DTEPA (Dahanu Taluka Ecologically Fragile Area) as a part of ToR (Terms of Reference) for processing for EC (Environmental Clearance) and CRZ (Coastal Regulation Zone) Clearance.
How would you respond to the environmental concerns on the proposed transhipment port in Great Nicobar Island?
The project is going ahead as per the time schedule. Considering the magnitude of the project, strategic location and geological and environmental sensitivities, MoPSW is in continuous engagement with various stakeholders for the development of the project.
How do you plan to develop the eastern grid of waterways?
Encouraged by progress on the augmentation of the Ganga river system (National Waterways 1) and the huge trade potential with Bangladesh and wider East Asia, the government has been firming up the plan to develop a ‘Regional Waterways Grid’, comprising key waterways and certain international routes, primarily situated in India and Bangladesh, of about 5000 km navigable waterways to boost regional integration and trade. Seamless connection of NW l (Ganges) and NW2 (Brahmaputra) would also create an opportunity for developing an economic corridor of 3500 km connecting North Eastern India with the rest of India through Bangladesh and also linking Bhutan and Nepal to Bangladesh and India through multimodal connection. The Eastern Grid will benefit 600 million people in one of the densest parts of the world. The project report for the grid is under preparation for placing before the finance ministry as a project. The total project cost is likely to be between ₹7000-9,000 crore.