India has a vast opportunity for expansion of the capacity of its ports as the total containerised cargo capacity at 12 major ports is less than a quarter of containerised goods handled at Shanghai port in China, stated the latest study by Associated Chambers of Commerce and Industry of India (Assocham).
The study titled ‘Indian ports sector: Challenges of scale and efficient operations’ released here on Tuesday said while the capacity of all 12 major ports of the country stands at 8.75 million TEUs, Shanghai port alone handles around 36.5 million TEUs.
The study report was released by Assocham secretary general DS Rawat and chief advisor Dr Arvind Kumar.
Highlighting the importance of port development, Rawat said the Orissa High Court’s decision to dispose of the case pertaining to setting up 13 non-major ports along its 480 km long coastline will further boost the prospect of port infrastructure, bring in investment, create thousands of jobs and also add to the revenues of the state exchequer.
Though India’s ports have met in rapidly expanding traffic, handling more than a billion tonne of cargo in 2016-17 and the capacity is expected to increase to 2.5 billion tonnes by 2025, the freight mainly comprises petrol, oil, and lubricant besides coal, iron ore and other commodities.
It is only recently that freight in containers, which are easy to load, unload and can be carried to the hinterland through multi-modal transport, is catching up in the country.
In China, there are six cargo ports which can handle over 500 million tonnes cargo per annum and it has eight ports which handle cargo more than 100 million tonnes up to 500 million tonnes.
“The port scaling in China is not only ahead of us, but it over-awes even the major countries. Of top 20 cargo ports in the world, 14 are located in China and of top 20 container ports in the world, nine belong to China. No Indian port figures in the world’s top 20,” Rawat said.
Even on the parameter of overall cargo, both with or without containerisation, India has a fragmented capacity at different ports. It has two ports at Kandla and Mundra which handle beyond 100 MT.
The Assocham report said large productivity gains can be achieved by improving existing ports at a much lower marginal cost. The use of containers is imperative to promote multimodal transportation and these containers can travel across all modes.
Since a container is a transport unit as well as a logistics unit and it saves handling costs, the study suggested that it would be appropriate to augment the capacity of existing ports with a large capacity of 100 million tonnes rather than creating new ports and spreading resources thinly.
Observing that for India to remain competitive globally, investment in port capacity is a must, Kumar said the industry needs to address how to identify, fund, operate and make targeted infrastructure improvements in key elements of the maritime transportation system. “India needs to spend more and better in maritime infrastructure,” he pointed out.
The Assocham study said the proposed national ports strategy should include a clear articulation of function and hierarchy of India’s ports within the context of a national supply chain.
A key outcome of ports strategy should lie in determining a hierarchy for container and resource ports which takes into account future growth and potential landside bottlenecks which may impede growth, it said.
The study has also recommended the need for India to revisit the Major Ports Trusts Act, 1963 with a view to modernize the institutional structure of major ports and to secure greater operational freedom for ports, in tune with present-day requirements.
“A single-window clearance is required to promote ease of doing business in the ports sector. Private port operators are already introducing automation and technological advancements and this should be complemented by improvement in customs procedures,” it added. Read More
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