Wednesday, July 20, 2016

‘Sagarmala — tax sops to attract investors’

Coastal shipping traffic has the potential to go up from 86 MTPA currently to over 230 MTPA by 2025, says Rajive Kumar, Secretary, Ministry of Shipping, in an exclusive e-mail chat with BusinessLine. Edited excerpts
What is the status of the 150-plus projects under Sagarmala?
As part of the National Perspective Plan, April 2016, prepared under Sagarmala, more than 150 projects, at an estimated cost of ₹4 lakh crore, have been identified.
Implementation will be taken up by the relevant Ports, State Governments/Maritime Boards, Central Ministries, mainly through private or PPP mode.
The implementation roadmap for these projects is being finalised in consultation with the relevant stakeholders, with a time horizon of 2016-2035.
More than 60 projects (total project cost of approximately ₹26,800 crore) are being considered for implementation starting FY16-17, of which 20 plus projects are being considered for funding under Sagarmala.
The Techno-Economic Feasibility Reports have already been prepared for the proposed four new port locations (Colachel, Sagar Island, Paradip Satellite Port and Vadhavan).
Of the seven Multi-Modal Logistics Parks (MMLPs) proposed under Sagarmala, development is already under way for five.
The Ministry of Road Transport & Highways/NHAI has agreed to prepare the Detailed Project Reports for 18 road projects, proposed under Sagarmala, on immediate basis under the proposed Bharatmala scheme. Through these 18 projects, approximately 450 km of roads will be developed, at a cost of ₹5,100 crore, which will provide last-mile connectivity to the non-major ports and the new port at Sagar.
What is the strategy you are planning to enable the major ports to gain market share?
Based on the benchmarking exercise conducted for the 12 major ports with the global best-in-class ports, 119 initiatives have been identified that would lead to unlocking of more than 100 MMTPA of existing major port capacity over the next three years; 35 of these initiatives have been implemented and the remaining are under implementation.
Capacity expansion projects proposed by both major and minor ports are expected to add 500 MMTPA to existing port capacity by 2025. Seven potential new port locations have been identified.
Which large private players are likely to invest under the PPP model?
A wide range of investors are expected to be interested. In fact, the strength of investor sentiment in Sagarmala can be gauged from the response at the maiden Maritime Investor Summit held in Mumbai in April 2016 at which business agreements worth ₹72,000 crore were concluded in the ports and maritime sector.
Port modernisation and new port development projects will be attractive for domestic/international container terminal operators as well as port developers who currently operate large non-major ports in India. Port connectivity projects (road and rail) should be of interest to road developers and port developers themselves. With development of coastal economic zones (CEZ) identified under Sagarmala, developers of SEZs and townships should also evince strong interest.
Considering weak exports, how are you planning to increase the traffic in ports?
A two-fold strategy is proposed to be adopted to increase port traffic. First, coastal shipping traffic has the potential to go up from 86 MTPA currently to over 230 MTPA by 2025. Coal, other bulk cargo (such as cement and steel) and containers are the primary focus areas for coastal shipping. This is expected to add approximately 300 MTPA to the total port traffic (30 per cent of the current port traffic handled).
Second, the coastal economic zones proposed under Sagarmala will provide a major boost to port traffic by promoting development of port-dependent industries.
Several bulk and discrete manufacturing industries have been identified for this purpose to be located in CEZs and could collectively add over 200 MTPA of traffic .
What would attract manufacturing units in the coastal economic zones?
The proximity of the manufacturing units to the ports will substantially cut down lead distances. Seamless connectivity to the ports will provide a strategic edge that will reduce logistics cost as well as provide higher level of reliability.
It is also being examined whether the coastal economic units, which are export-oriented, can also get benefits available to special economic zones. Further tax incentives necessary to attract large global investors are also being explored.
What is the strategy for integrating dedicated freight corridors (DFCs) into Sagarmala?
For better integration of the DFCs, it is proposed to link three key ports (Mundra, Kandla and Pipavav) with the western DFC using spur lines.
In addition, the eastern DFC is proposed to be linked with the National Waterways 1 (Ganga), through multi-modal terminals, enabling better integration with ports at Kolkata and Haldia.
What is the current status of the plans to build 101 new inland waterways?

It is proposed to develop the new National Waterways (NWs) in phases. Fairway development of six NWs is to be taken up in 2016-17. These include – NW-16 (Barak), NW-68 (Mandovi), NW-111 (Zuari), NW- 40 (Ghaghra), NW-37 (Gandak) and NW-58 (Kosi).

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