Vasan: Port Development Projects Require Big Investment (India)

Following is the text of the speech delivered by the Honourable Minister of Shipping, Shri G.K.Vasan at the meeting of the Consultative Committee attached to the Ministry of Shipping on April 15, 2013 in Mumbai.

“I extend a very warm welcome to all of you to the city of Mumbai and also to this meeting of the Consultative Committee. The topic selected for discussion in today’s meeting “Port Development Projects” is very important not only for the Ministry but also for sustaining the economic growth of the country,” said Vasan.

“Ports are the gateways for our EXIM trade and any deficiency will affect the country’s trade and competitiveness of its industries. The twelve Major Ports handle 58% of the total traffic in the Ports and the non-Major Ports handle 42%.”

“The development projects at our ports require a lot of investment. From the year 1996 onwards, the Government has embarked upon the Public-Private-Partnership (PPP) mode as the preferred mode for attracting investments in the port sector. The PPP approach has been quite successful in the Port Sector and most of the capacity augmentation projects are taken up through the PPP mode. Almost all the top port infrastructure companies in the world like D.P. World, Port Authority of Singapore, P&O Ports, APM Terminal, Maersk, and Noble Group have invested in India. This has ensured that the Government and our ports need not invest their resources to develop facilities, making them available for implementing welfare measures. Besides, the private sector participants bring in operational efficiency and latest technologies which result in timely commissioning of projects and smooth operation of the commissioned projects.”

To facilitate investment in port projects, the Government has inter alia:

1. Permitted 100% FDI under the automatic route;

2. Allowed income tax incentives as per Income Tax Act, 1961;

3. Standardized Bidding documents like RFQ, RFP and MCA;

4. Enhanced delegation of financial powers to Shipping Ministry to accord investment approval for PPP projects; and

5. Streamlined the security clearance procedures.

Realising the importance of the port sector for economic development, the Government has come out with the Maritime Agenda 2020, which provides the roadmap for the development of the ports, shipping and inland water transport sectors over a period of ten years. The Maritime Agenda 2010-2020 is a vision document and a perspective plan of Ministry of Shipping for a period of ten years. It gives the emerging scenario and overview of the port sector, existing policy frame work and analysis of traffic projection and capacity estimation. It also gives details of investment required, funding pattern, future policy milestones and spells out the way forward.

This Agenda was formulated by the Ministry of Shipping in January, 2011.

The Maritime Agenda identifies priority areas and gives a road map for achieving the targets in terms of creation of world class Port facilities in the country.

The capacity at Indian ports stood at 1,000 million metric tonnes per annum (MMTPA) in January, 2011. The Agenda aims to create port capacity of 3200 MMTPA by 2020, which is more than a three-fold increase over ten years, for handling about 2500 million metric tonnes of projected traffic at an estimated investment of about Rs.3 lakh crore.

“During the Eleventh Plan period, the growth in capacity of Major Ports was not remarkable but this was made up by the spectacular growth in the capacity of non-Major Ports, which increased by 316.34 MMTPA. However, I am happy to inform you that the achievement of the Ministry during 2012-13, which is the first year of the Twelfth Plan, has been outstanding in terms of awarding capacity augmentation projects at the major ports. The Ministry has awarded 32 Projects which will add a capacity of 136.75 MMTPA at an estimated investment of Rs. 6765.63 crores. This is the best performance for any year in the history of Major Ports.”

The Ministry has also decided to establish two new Major Ports, one at Sagar Island in West Bengal and another in Andhra Pradesh. These two new Ports will also add a capacity of 100 MMTPA.

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Press Release, April 15, 2013