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Paradip Port: India’s Leading Major Port in Cargo Handling
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Paradip and other major sea-ports
Mains level: NA
Why in the news?
Paradip Port in Odisha has made history by becoming India’s largest major port in terms of cargo volumes, surpassing Deendayal Port Authority in Gujarat during FY24.
About Paradip Port
- Paradip Port is situated at the confluence of the Mahanadi River and the Bay of Bengal in the Jagatsinghpur district of Odisha.
- It has a natural deep-water harbor, allowing it to accommodate large vessels and handle bulk cargo efficiently.
- The port was commissioned in 1966 to serve as a gateway for the maritime trade of eastern India.
- Paradip Port Trust, a statutory body under the Major Port Trusts Act, 1963, manages and operates the port.
Key Features of the Port
- Infrastructure: It is equipped with modern facilities for handling a variety of cargo, including dry bulk, liquid bulk, containerized cargo, and general cargo.
- Deep-Draft Port: The port has extensive berthing facilities and cargo-handling equipment capable of handling millions of tonnes of cargo annually.
- Strategic Importance: Paradip Port serves as a vital link for the export and import trade of eastern and central India, contributing significantly to the region’s economic development.
- Connectivity: The port is well-connected to major cities and industrial centers in Odisha and neighbouring states through road and rail networks.
Key Feats Achieved
- Cargo Throughput: Paradip Port achieved a record-breaking cargo throughput of 145.38 million metric tonnes (MMT) in FY2023-24, surpassing Deendayal Port.
- Coastal Shipping Traffic: The port recorded the highest-ever coastal shipping traffic of 59.19 million metric tonnes, showcasing a growth of 1.30% over the previous year.
- Thermal Coal Handling: Thermal coal shipping reached 43.97 million metric tonnes, marking a growth of 4.02% over the previous year.
- Revenue Growth: Operating revenue crossed Rs 2,300 crore in FY24, reflecting a notable increase of 14.30% compared to the previous fiscal.
Driving Factors of this Success
- Enhanced Operational Efficiency: Mechanised coal handling plant operations were optimized, resulting in the highest handling of thermal coal at 27.12 million tonnes.
- Productivity Improvement: Paradip Port improved berth productivity to 33,014 MT, the highest among all ports, showcasing a growth of 6.33% over the previous financial year.
- Rake Handling and Ship Movements: The port handled 21,665 rakes and 2,710 ships during FY24, registering significant year-on-year growth in both metrics.
Future Prospects
- Capacity Expansion: With a current capacity of 289 million tonnes, Paradip Port is poised to exceed 300 million tonnes capacity in the next 3 years with the commissioning of the Western Dock project.
- Strategic Location: Located near a mineral-rich hinterland, Paradip Port remains a strategic asset for India’s maritime trade and economic growth.
PYQ:2017: What is the importance of developing Chabahar Port by India? (a) India’s trade with African countries will enormously increase. (b) India’s relations with oil-producing Arab countries will be strengthened. (c) India will not depend on Pakistan for access to Afghanistan and Central Asia. (d) Pakistan will facilitate and protect the installation of a gas pipeline between Iraq and India.
Practice MCQ: It is situated at the confluence of the Mahanadi River and the Bay of Bengal. It has a natural deep-water harbor, allowing it to accommodate large vessels and handle bulk cargo efficiently. Which sea port in Odisha is being talked about by the above description? (a) Haldia (b) Gopalpur (c) Belikeri (d) Paradip |
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Israel proposes New Trade Route via Mundra Port
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Mundra Port
Mains level: IMEC
Introduction
- Amid ongoing attacks on Israel-linked ships by Yemen’s Houthi rebels in the Red Sea, Israeli Transport Minister Miri Regev has announced an alternative trade route via the Mundra port in Gujarat.
- The route aligns with the India Middle East Europe Economic Corridor (IMEC) project, aiming to link India to Europe via the Middle East.
Why discuss this?
- Houthi Attacks: Houthi rebels in Yemen have been targeting ships connected to Israel in solidarity with Gaza, leading to disruptions in global trade, with about 12% passing through the Red Sea.
- Industry Response: A recent industry agreement grants seafarers the right to refuse to sail through the Red Sea due to safety concerns, further highlighting the gravity of the situation.
New Route via Mundra Port
- Overview: Minister Regev outlined the new trade route in a video from the Mundra port. Goods will travel from Mundra to UAE ports, then proceed by land through Saudi Arabia and Jordan to Israel, primarily using trucks.
- Operational Details: Israeli company Trucknet and UAE’s PureTrans will operate the trucks transporting goods. This route bypasses the Red Sea, ensuring safer passage amidst escalating tensions.
About India Middle East Europe Economic Corridor (IMEC)
| Details | |
| Corridors | East Corridor: Connects India to the Arabian Gulf.
Northern Corridor: Connects the Gulf to Europe. |
| Infrastructure | Railroad, Ship-to-Rail networks, and Road transport routes.
Includes an electricity cable, a hydrogen pipeline, and a high-speed data cable. |
| Signatories | India, the US, Saudi Arabia, UAE, the European Union, Italy, France, and Germany. |
| Ports Connected | India: Mundra (Gujarat), Kandla (Gujarat), Jawaharlal Nehru Port Trust (Navi Mumbai).
Middle East: Fujairah, Jebel Ali, and Abu Dhabi in the UAE, as well as Dammam and Ras Al Khair ports in Saudi Arabia. |
| Railway Route | Connects Fujairah port (UAE) to Haifa port (Israel) via Saudi Arabia (Ghuwaifat and Haradh) and Jordan.
Israel: Haifa port. Europe: Piraeus port in Greece, Messina in South Italy, and Marseille in France. |
Implications and Considerations
- Benefits: The land route promises reduced travel time and costs for Israel, while generating revenue for Saudi Arabia and Jordan through transport fees and duties.
- Challenges: Trucks have limited capacity compared to ships, potentially limiting trade volume. Additionally, the route’s viability hinges on stable diplomatic relations between Israel and the transit countries.
- Long-term Prospects: The route aligns with the India Middle East Europe Economic Corridor (IMEC) project, aiming to link India to Europe via the Middle East. However, the project’s progress may face hurdles due to ongoing conflicts.
Conclusion
- Israel’s initiative to establish an alternative trade route reflects its adaptability amidst regional challenges. While offering immediate relief from Red Sea disruptions, the long-term success of the route depends on diplomatic stability and infrastructure development in the transit countries.
- Despite its limitations, the new route underscores the importance of innovation and collaboration in navigating complex geopolitical scenarios, ensuring continuity in global trade operations.
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Unlocking Lakshadweep’s Potential as Logistics Hub for India
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Lakshadweep and its geographic features
Mains level: Overhaul of Lakshadweep
Introduction
- Lakshadweep’s strategic location near international shipping routes positions it as a potential logistics hub, attracting attention for its economic and tourism prospects.
About Lakshadweep
| Details | |
| Location | In the Arabian Sea, off the southwestern coast of India. |
| Geographical Formation | Formed by coral activities and have a coral atoll structure. |
| Formation as UT | Formed as a Union Territory of India in 1956. |
| Total Islands | Comprises 36 islands, including atolls, coral reefs, and submerged banks. |
| Inhibition | 10 of the 36 islands are inhabited. |
| Capital | Kavaratti is the capital of the Union Territory. |
| Area | Total area of 32 sq km. |
Tourism and Diplomatic Stir
- Tourist Attraction: PM Modi’s visit to Lakshadweep sparked a surge in interest, with comparisons to Maldives and discussions on Lakshadweep’s tourism potential.
- Diplomatic Tensions: Comments from Maldivian leaders sparked controversy, leading to online backlash and a shift in focus towards Lakshadweep’s tourism development.
Logistics potential of Lakshadweep
- Geographical Advantage: Lakshadweep’s proximity to major shipping routes and deep-water ports presents an ideal location for logistics transportation.
- Existing Infrastructure: The islands have airports, road networks, and plans for container terminals and inland container depots (ICDs) to improve connectivity.
- Regional Integration: Efforts to establish links with neighboring ports in Sri Lanka and the Maldives aim to boost trade and economic ties.
- Connectivity Projects: Lakshadweep administration is working to enhance connectivity between islands and the mainland, including plans for roll-on/roll-off ferry services and container terminals.
- Centuries-old Business Links: Historical ties between Lakshadweep and Mangaluru underscore the importance of business relations, with many residents relying on supplies from Mangaluru.
Government Initiatives and Development Plans
- Inclusion in Budget Proposal: Lakshadweep featured prominently in the Indian government’s interim Budget (2024-25) proposal, focusing on port connectivity, tourism infrastructure, and amenities across its islands.
- Gateway Proposal: Suggestions to make Mangaluru the gateway and mainland partner for Lakshadweep’s logistical and tourism needs, leveraging historical and geographical connections.
- Tech push: The Prime Minister has recently inaugurated Kochi-Lakshadweep islands submarine optical fiber connection (KLI-SOFC) project.
Present Challenges
- Infrastructure Deficiency: Lack of roads and suitable airports hinder transportation, especially for heavy machinery and equipment.
- Resource Constraints: Limited freshwater and reliance on diesel generators raise operational costs and limit industrial growth.
- Isolation: Geographical isolation from the mainland poses logistical challenges and limits business opportunities.
- Preserving Ecological Balance: Recognizing the ecological significance of Lakshadweep, proposals emphasize sustainable development and eco-sensitive tourism practices.
Benefits of Logistics push
- Efficiency Enhancement: Logistics optimization can improve route planning, resource allocation, and cost-effectiveness.
- Flexibility Boost: Adaptive transportation systems can respond to market changes and emergencies efficiently.
- Sustainability Promotion: Logistics practices can reduce emissions, waste, and energy consumption, contributing to sustainable development.
Conclusion
- Unlocking Lakshadweep’s logistics potential is pivotal for economic self-sufficiency and growth.
- Government support in modernizing logistics with technology adoption can enhance efficiency and create job opportunities.
- Investment in infrastructure and technology is imperative for realizing Lakshadweep’s economic potential and fostering regional development.
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Book Review: How India ignored its Aqua-Geography of Histories
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ancient geographical division of India, ex. Madhyadesa, Udicya, Pracya etc.
Mains level: Maritime Geography and historic references to it
Introduction
- India’s coastal geography, often overshadowed in educational curricula, holds profound historical and cultural significance.
- While India’s connection with its southern seas is acknowledged, the broader implications of its maritime heritage remain underexplored.
Irony of India’s Maritime Geography
- Distance from the Sea: While some might remember that India is bound by sea all along the south, the connections with the sea do not consciously register — for a great many people even today, the sea is a very distant object.
- Impact of Natural Events: It may perhaps impinge on the consciousness a little more when there are reports of cyclones or storms (or the tsunami that hit some years ago in 2004), but the expanse of the sea, the links with the oceans, and the historical and geographical connections are typically rather hazy.
Historical Perspectives on Indian Geography
- School Definition: Moreover, children are mostly taught about only two parts of India — the plains to the north, and the peninsula to the south.
- Sanskrit Texts: But historically, India was defined slightly differently. In early Indian Sanskrit texts, the subcontinent is seen as divided into five major regions
- Madhyadesa (middle country),
- Udicya or Uttarapatha (northern India),
- Pracya (eastern India),
- Dakshinapatha (Deccan) and
- Aparanta (western India)
- Different Interpretations: The term Dakshinapatha came to be used in two ways: the entire peninsula, or more commonly, a more limited area from the Narmada to the Tungabhadra and Krishna rivers. To the south of this lay the Dravidadesa or Tamilakam.
- Imperial Gazetteer’s Definition: On the other hand, as defined in the Imperial Gazetteer, the ‘Deccan’ has also been understood as referring to the entire landmass south of the Vindhya mountains and the great Gangetic plain, and so it can be taken to mean the entire peninsular region of India.
Geographical Features of the Indian Subcontinent
- Demarcated Regions: Within the peninsula itself are five clearly demarcated regions — the Western Ghats skirting the Arabian Sea, the northern Deccan plateau, the eastern plateau, the Eastern Ghats towards the Bay of Bengal and the coastal strip between the ghats on either side and the sea itself.
- Plateau Considerations: While studies have traditionally tended to focus on only the western part of the plateau as the ‘Deccan’, it is to be remembered that the plateau region covers much of the northern peninsula.
- Extent of Ghats: Furthermore, the ghats bordering it extend almost down to Kanyakumari. The western coastal strip is generally narrow, being indented and segmented by spurs from the Western Ghats or by small rivers flowing to the sea from the hills.
- Eastern Ghats Description: The Eastern Ghats are less continuous, with a wider and more fertile coastal strip, containing, as it does, the deltaic plains of the two major river systems of the Deccan plateau, the Krishna and Godavari.
Coastal Divisions and Sub-regions
- Distinct Names for Ghats: On both coasts, the ghats are given different names in various regions. So, for example, the Western Ghats up to Karnataka are also often referred to as the Sahyadri ranges.
- Plateau Description: What is normally understood as the Deccan plateau proper is a broad quadrangle covering most of the present-day Maharashtra state, with a topography typical of plateau land.
- Transition to Plains: As it begins to give way to the plains in Andhra Pradesh and Karnataka (the south-eastern and southern plateaus), the geography becomes rougher and rockier, and is interspersed with forest land and riverine stretches.
- Coastal Strip Description: The western coastal strip is a narrow strip of land, very rarely extending more than eighty kilometres inwards from the sea. This strip is particularly narrow from the Tapi river to Goa, after which it widens a little on the Karnataka coast and finally includes all of present-day Kerala, for the ghats here form the demarcation between Kerala and modern Tamil Nadu.
Coastal Features and Subdivisions
[A] Western Coast
- Technical Divisions: This coast is technically divided into three parts, excluding Gujarat. The northernmost section is called the Konkan, which is further subdivided into two segments — the northern one running approximately from the Tapi to Chaul (modern Revdanda) and the southern from Chaul to Goa.
- Coastal Divisions: South of Goa is the Canara coast, stretching till Mount Eli (Ezhimala) in modern-day Kerala, known to early travellers as Mount Dilli or Dely. The Malabar coast begins here and extends to Kanyakumari, the tip of the peninsula.
- Maritime Economic Considerations: However, in maritime economic terms, it is rather difficult to limit oneself only to this western stretch of the coastline, for connections extend northwards into the Gujarat coast and eastwards across the ghats into the plateau region.
[B] Eastern Coast
- Ease of Access: The Eastern Ghats, as mentioned earlier, are not continuous, which means that access to the interior from the coast (or vice versa) is much easier.
- Water Bodies: The eastern coastal strip features deltas and various other water bodies, including, in the northernmost part of the region, Chilika Lake in modern-day Odisha; Kolleru Lake between the Krishna and the Godavari deltas, approximately in the centre of the coast; and Pulicat Lake, which lies towards the southern edge of the Deccan region.
- Historical Significance: All these lakes used to be hubs for trade and fishing, with Pulicat also being the heart of a thriving weaving industry through most of India’s medieval era.
Port Dynamics
- Abundance of Ports: Both coasts are, of course, marked by innumerable ports. A brief survey of these ports is enough to indicate the ever-present climatic and natural hazards they faced.
- Western Coast Considerations: The physical geography of the west coast, given its numerous indentations, offers ample natural shelters all along its length, with the two largest natural harbours being Mumbai (Bombay) and Goa.
- Importance of Smaller Ports: However, throughout the medieval and early modern period (approximately the eighth to eighteenth century), the harbours of ports like Mangalore, Honawar, Bhatkal or Chaul were no less important in terms of the traffic they handled.
Challenges and Hazards on the Coasts
- Monsoon Challenges: Western ports face closures during the southwest monsoon, with shifting sandbanks and shoals posing dangers to ships.
- Lack of Natural Harbours: The east coast lacks natural harbors, with ports vulnerable to silting near river deltas.
- Unstable Delta Mouths: Delta mouths are prone to instability, potentially rendering established channels unusable after monsoon cycles.
- Cyclone Vulnerability: The Bay of Bengal presents cyclone risks due to its enclosed nature, leading to higher possibilities of circular winds compared to the west coast.
- Open Roads for Ports: East coast ports operate as open roads, requiring ships to navigate high surf, rolling waters, and random winds while loading and unloading goods.
Trade Routes and Cultural Exchange
- Port Competitiveness: Ports rely on their immediate interior areas, often shared by multiple ports, for sustenance and trade.
- Political and Economic Factors: Port prosperity hinges on political stability and economic conditions in their vicinity.
- Trade Patterns: West coast ports primarily trade with the Arabian Sea littoral, while east coast ports engage in trade across the Bay of Bengal.
- Cross-Coastal Trading: Merchants from both coasts trade extensively across the Indian Ocean world, transcending geographical boundaries.
- Established Routes: Trade routes across the Indian Ocean have existed for centuries, with changes in rulership but continuity in trade activities.
Conclusion
- The multitude of functional ports, diverse trade patterns, and established trade routes highlight the resilience and adaptability of India’s maritime regions.
- As India continues to navigate its maritime heritage into the future, understanding and appreciating its maritime geography remain crucial for fostering sustainable development and cultural preservation.
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The Great Nicobar Island Project: Environmental Recklessness or Economic Opportunity?
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Andaman and Nicobar Islands (ANI), Holistic Development of Great Nicobar Island project
Mains level: Holistic Development of Great Nicobar Island project and related concerns
Central Idea
- The ₹70,000 crore Holistic Development of Great Nicobar Island project raises concerns about its ecological impact and the Union government’s hasty clearances, while its feasibility and sustainability remain questionable.
What is Holistic Development of Great Nicobar Island project is all about?
- The Holistic Development of Great Nicobar Island project is a major infrastructure development initiative launched by the Indian government in 2020.
- The Union Ministry of Environment, Forest and Climate Change (MoEFCC) has cleared the way for the ‘Holistic Development of Great Nicobar Island project.
- The project aims to transform the Great Nicobar Island, the largest island in the Nicobar group of islands in the Bay of Bengal, into a modern, sustainable, and self-sufficient territory.
- The project includes an international transhipment port, an international airport, a gas and solar-based power plant, and an ecotourism and residential township.
Environmental and Ecological Concerns
- Quick Clearances and Exemptions: The project’s quick approvals, clearances, exemptions, and de-notifications indicate the Union government’s keenness to implement it.
- Urbanization and Biodiversity: The project is expected to attract a population equal to the entire island chain, with potential negative impacts on the region’s marine and terrestrial biodiversity.
- Biosphere Reserve and Tribal Reserves: The island was declared a biosphere reserve in 1989 and is home to vulnerable tribal communities, such as the Nicobarese and Shompen.
Feasibility and Sustainability Issues
- Hinterland Economic Activities: A successful transhipment hub requires viable hinterland economic activities, which may be wishful thinking in Great Nicobar.
- Afforestation and Coral Reef Translocation: The far-field afforestation recommendation and coral reef translocation are questionable compensation methods.
- Tectonic Instability: Great Nicobar Island’s proximity to the Ring of Fire and its history of earthquakes raise concerns about the feasibility of developing an urban port city.
Facts for Prelims: Andaman and Nicobar Islands (ANI)
- Location: Located between 6° and 14° North Latitude and 92° and 94° East Longitude lie the Andaman and Nicobar Islands, a union territory in India.
- Two groups of Island: It consists of two groups of islands. The islands located north of 10° north latitude are known as Andaman while islands located south of 10° north latitude are called Nicobar.
- The Andamans: More than 300 islands make up the Andamans. North, Middle, and South Andaman, known collectively as Great Andaman, are the main islands;
- The 10- degree channel: The 10-degree channel which is about 145 km long separates Little Andaman in the south from the Nicobar Islands.
- The Nicobars: The Nicobars consists of 19 islands. Among the most prominent is Car Nicobar in the north; and Great Nicobar in the south. About 90 miles to the southwest of Great Nicobar lies the northwestern tip of Sumatra, Indonesia.
- Formation: Both the Andaman and Nicobar groups are formed by the above-sea extensions of submarine ridges of mountains and are a part of a great island arc. The highest peak is 2,418 feet at Saddle Peak on North Andaman, followed by Mount Thullier at 2,106 feet on Great Nicobar and Mount Harriet at 1,197 feet on South Andaman. Barren island, the only known active Volcano in south Asia lies in the Andaman Sea. In the late 20th and early 21st centuries, there were volcanic eruptions on Barren Island.
- Andaman Terrain: Formed of sandstone, limestone, and shale of Cenozoic age, the terrain of the Andamans is rough, with hills and narrow longitudinal valleys. Flat land is scarce and is confined to a few valleys.
- Nicobar Terrain: The terrain of the Nicobar is more diverse than that of the Andamans. Some of the Nicobar Islands, such as Car Nicobar, have flat coral-covered surfaces with offshore coral formations that prevent most ships from anchoring. Other islands, such as Great Nicobar, are hilly and contain numerous fast-flowing streams.
- Great Nicobar is the only island in the territory with a significant amount of fresh surface water.
- Climate: The climate of the Andaman and Nicobar Islands is tropical but is moderated by sea.
Conclusion
- The Great Nicobar Island project’s ecological and environmental costs, along with its questionable feasibility and sustainability, raise concerns about India’s commitment to conservation, sustainability, and green development models. It is crucial that the green developmental model becomes the guiding principle for future economic activities, ensuring that growth does not result in irretrievable loss of natural capital.
Mains Question
Q. Recently Union Ministry of Environment, Forest and Climate Change (MoEFCC) has cleared the way for the Holistic Development of Great Nicobar Island project. In this backdrop, discuss environmental and ecological concerns and sustainability issues.
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Protests against Vizhinjam Port
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Vizhinjam Port Project
Mains level: Transshipment hub: Economic potential
Kerala’s ambitious Vizhinjam port project for a transshipment container terminal is caught in protests and violence.
Vizhinjam Port Project
- In 2015, the Adani Group signed a concession agreement with the Kerala government to build India’s first mega transshipment container terminal at Vizhinjam near Thiruvananthapuram.
- The ₹7,525 crore project — an all-weather deep-sea port with a depth of 24 meters — can service large megamax-sized container ships.
- This natural port has no littoral sedimentation, obviating the need for periodic dredging and lowers maintenance costs.
- The port, which is well-connected to the hinterland, will handle 1 million twenty-foot equivalent units in Phase-I and another 6.2 million TEUs when completed.
Significance of the project for India?
- Transshipment hub: The Vizhinjam Port holds the potential to attract a large share of container transshipment traffic that is now handled by Colombo, Singapore or Dubai.
- Important shipping lane: It located just off the International Shipping Lane and close to the East-West Shipping Axis.
- Cargo handling: A large share of India’s exports and imports that are now transshipped through these international ports can be handled at Vizhinjam.
- Reducing logistic costs: It would mean a sharp reduction in shipping costs and lead time. This will go a long way in reducing overall logistics costs and making manufacturing competitive.
- Employment generation: It will also create thousands of jobs – directly and otherwise.
Reasons for protests
- Local fishermen fear displacement and loss of livelihood. They blame higher tides and increasing coastal erosion on the project.
- Protests has some leftist leaning inherently opposing every development project.
- A Latin Catholic Church has been at the forefront of the protests.
- Many right-wing outfits have thrown their weight behind the project and want its quick completion.
- They blame foreign funding for what they call ‘anti-development’ protests.
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Trans-shipment Terminal at Great Nicobar: strategic imperative and ecological concerns
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Great Nicobar Islands
Mains level: Read the attached story
The Ministry of Environment, Forest and Climate Change gave environmental clearance for the ambitious Rs 72,000 crore development project on the strategically important Great Nicobar Island.
About the Great Nicobar Development Project
- A “greenfield city” has been proposed, including an:
- International Container Transhipment Terminal (ICTT),
- Greenfield international airport,
- Power plant, and
- Township for the personnel who will implement the project
- The project is to be implemented in three phases over the next 30 years.
When was the project incepted?
- The proposal to develop Great Nicobar was first floated in the 1970s, and its importance for national security and consolidation of the Indian Ocean Region has been repeatedly underlined.
Scope of the project
- A total 166.1 sq km along the southeastern and southern coasts of the island have been identified for project along a coastal strip of width between 2 km and 4 km.
- Some 130 sq km of forests have been sanctioned for diversion, and 9.64 lakh trees are likely to be felled.
- Development activities are proposed to commence in the current financial year, and the port is expected to be commissioned by 2027–28.
- More than 1 lakh new direct jobs and 1.5 lakh indirect jobs are likely to be created on the island over the period of development.
Features of the Project
- Transshipment hub of the East: The proposed port will allow Great Nicobar to participate in the regional and global maritime economy by becoming a major player in cargo transshipment.
- Naval control: The port will be controlled by the Indian Navy, while the airport will have dual military-civilian functions and will cater to tourism as well.
- Urban amenities: Roads, public transport, water supply and waste management facilities, and several hotels have been planned to cater to tourists.
Why need such project?
- Geostrategic advantage: The Island has a lot of tourism potential, but the government’s greater goal is to leverage the locational advantage of the island for economic and strategic reasons.
- Critical shipping chokepoint: Great Nicobar is equidistant from Colombo to the southwest and Port Klang and Singapore to the southeast, the region through which a very large part of the world’s shipping trade passes.
- Huge source of revenue: The proposed ICTT can potentially become a hub for cargo ships travelling on this route.
- Countering Chinese presence: Increasing Chinese assertion in the Bay of Bengal and the Indo-Pacific has added great urgency to this imperative in recent years.
Malacca Dilemma
In recent years, China’s efforts to expand its footprint in the Indian Ocean Region to overcome its ‘Malacca Dilemma’ (China’s fear of a maritime blockade at the Straits of Malacca) and fulfil its ‘Maritime Silk Road’ ambitions have fuelled apprehensions about freedom of navigation in these waters.
Issues with the Project
- Ecological damage: The proposed massive infrastructure development in an ecologically important and fragile region, including the felling of almost a million trees, has alarmed many environmentalists.
- Threats to marine ecosystem: The loss of tree cover will not only affect the flora and fauna on the island, it will also lead to increased runoff and sediment deposits in the ocean, impacting the coral reefs in the area.
Damage control measures by the govt
- India has successfully translocated a coral reef from the Gulf of Mannar to the Gulf of Kutch earlier.
- The Zoological Survey of India is currently in the process of assessing how much of the reef will have to be relocated for the project.
- The government has said that a conservation plan for the leatherback turtle is also being put in place.
- The project site already is outside the eco-sensitive zones of Campbell Bay and Galathea National Park.
Conclusion
- Given its physical location, the A&N Islands are the natural platform for collaboration between India and Southeast Asia.
- By most accounts, political will in India and other countries to develop these islands is high.
Back2Basics: Great Nicobar Islands
- Great Nicobar, the southernmost of the Andaman and Nicobar Islands, has an area of 910 sq km.
- It has tropical wet evergreen forests, mountain ranges reaching almost 650 m above sea level, and coastal plains.
- The A&N Islands are a cluster of about 836 islands in the eastern Bay of Bengal, the two groups of which are separated by the 150-km wide Ten Degree Channel.
- The Andaman Islands lie to the north of the channel, and the Nicobar Islands to the south.
- Indira Point on the southern tip of Great Nicobar Island is India’s southernmost point, less than 150 km from the northernmost island of the Indonesian archipelago.
- Great Nicobar is home to two national parks, a biosphere reserve, and the Shompen and Nicobarese tribal peoples, along with ex-servicemen from Punjab, Maharashtra, and Andhra Pradesh who were settled on the island in the 1970s.
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Sustainable port development promises blue economy to bloom
Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Sustainable coast management
Context
- It is politically hard, but developmentally critical, to run port development projects with coastal management sustainably.
What is a port?
- A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can also be found far inland, such as Hamburg, Manchester and Duluth; these access the sea via rivers or canals.
What is meant by port management?
- A port management analysis involves an understanding of the port conditions, including intra-port distribution, and routes and hinterland connections outside the port.
Why ports are important?
- Ports infrastructure is key to the development of any nation. India has a coastline spanning about 7,500 km. around 90 percent of India’s external trade by volume and 70 percent by value are handled by ports.
What are concerns with port projects?
- Displacement: Some 350 families that have lost homes to coastal erosion last year, and those living in makeshift schools and camps are just a foretaste of things to come if coastal erosion and extreme cyclones continue unabated.
- Ecological impact: A further danger is an irreversibly destroyed ecology, triggering deadlier hazards of nature. Ports without adequate safeguards in a highly delicate ecology unleash destruction on marine life and the livelihoods of the local population.
- Coastal erosion: Visakhapatnam and Chennai show how siltation, coastal erosion and accretion can be exacerbated by deepening of harbour channels in ecologically sensitive areas.
- Oil spills: During the operation of ports, spillage or leakages from the loading and unloading of cargo and pollution from oil spills are common due to poor adherence to environmental laws and standards.
- Ecosystem threat: The water discharged during the cleaning of a ship and the discharge of ballast water is a threat to marine ecosystems
- Impact on fisheries: Dredging cause’s environmental problems (increased sedimentation) affecting local productivity of the local waters and its fisheries
Value addition example
A just published study shows that during 2006-20, the sea gobbled some 2.62 square kilometres or close to 650 acres from the Thiruvananthapuram coast alone.
Steps to take
- Compensation: The first order of business, as in infrastructure projects worldwide, is that the project provides compensation to the displaced people and restores their rights.
- Reversing marine damage: Second, the gross neglect of the damage to invaluable marine biodiversity must be redressed with an acceptable EIA, including inputs from experts in biology, ecology, and oceanography.
- Safeguard to place: Third, there needs to be an independent assessment of safeguards that port authorities must put in place as a precondition for any further construction.
- Blue Economy:Blue Economy as a concept includes all the economic activities related to oceans, seas, and coastal areas and emerges from a need for integrated conservation and sustainability in the management of the maritime domain.
Way forward
- Master plan: Countries should adopt a National Long-term Mater plan addressing the aspects of smarter, greener, safer sustainable port development and productivity improvement.
- Planning: Port development and investment should be driven by setting specific and realistic goals, such as building a stable infrastructure focused on reducing trade costs and contribute to achieving sustainable transport.
- Cooperation of multiple sectors: In order to establish a comprehensive port development master plan, cooperation with financial, environmental, technical, energy, transportation and urban development authorities is essential and must reflect the needs of users, including shippers and shipping lines.
Conclusion
- To address existing challenges, we should provide research, analysis and technical assistance to help ports and the maritime transport sector especially in developing countries to improve operations and become more sustainable and resilient to crises, including climate change.
Mains question
Q. What do you understand by sustainable port development and port productivity? Discuss the challenges in achieving the same along with way forward.
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Why are the fisherfolk protesting over Vizhinjam Port Project?
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Vizhinjam Port Project
Mains level: Port-led development in India
Vizhinjam near Thiruvananthapuram, is on the boil due to the under-construction Vizhinjam Port Project, from both sea and land.
Vizhinjam Port Project
- The Vizhinjam International Transhipment Deep-water Multipurpose Seaport is an ambitious project taken up by Government of Kerala.
- It is designed primarily to cater container transhipment besides multi-purpose and break bulk cargo.
- The port is being currently developed in landlord model with a Public Private Partnership component on a design, build, finance, operate and transfer (“DBFOT”) basis.
Why protests are erupted?
- The protestors have been opposing the construction work by the Adani Vizhinjam Port Private Limited.
- Adani group is developing the port on DBFOT basis.
What lies at the heart of the protest?
- According to fisherfolk, the port work has aggravated the coastal erosion along the coast of Thiruvananthapuram.
- A scientific study to assess the impact of the port work on the shoreline has to be conducted urgently by stopping the construction.
- Further, around 300 families along the coastline were shifted to relief camps after their houses were destroyed due to high-intensity coastal erosion.
- The protesters demand a comprehensive rehabilitation package, an assured minimum wage when the sea turns rough due to inclement weather and subsidised kerosene for boats.
Why the Vizhinjam project is considered important?
- The port is located on the southern tip of the Indian Peninsula, just 10 nautical miles from the major international sea route and east-west shipping axis.
- It has a natural water depth of more than 20 m within a nautical mile from the coast.
- The Vizhinjam port is likely to play a pivotal role in the maritime development of the country and Kerala.
- The commissioning of the port is expected to leverage the growth of 17 minor ports in the State along with creating thousands of employment opportunities.
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Places in news: Ningbo Port
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Port of Ningbo-Zhoushan
Mains level: Not Much
China has partially shut down the world’s third-busiest container port, the Ningbo Port, after a worker there tested positive for Covid-19.
Port of Ningbo-Zhoushan
- This port is the busiest in the world in terms of cargo tonnage.
- It handled 888.96 million tons of cargo in 2015.
- The port is located in Ningbo and Zhoushan, on the coast of the East China Sea, in Zhejiang province on the southeast end of Hangzhou Bay, across which it faces the municipality of Shanghai.
- The port is at the crossroads of the north-south inland and coastal shipping route, including canals to the important inland waterway to interior China, the Yangtze River, to the north.
- The port consists of several ports which are Beilun (seaport), Zhenhai (estuary port), and old Ningbo harbour (inland river port).
What is the potential impact of the closure?
- Despite the diversion of shipments to other terminals, experts are anticipating a backlog of consignments with average wait times being expected to rise.
How is it likely to affect global trade?
- In the aftermath of Covid-19, global supply chains have remained fragile mainly on account of closures and lockdowns that affected both the manufacturing and the logistical segments of the chain.
- This has not only resulted in a growing backlog of shipments but has also caused freight charges to go up as demand outgrew the supply.
- Extended closure of one of the biggest terminals at the third-busiest port in the world could further exacerbate the stress in global trade.
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Major Port Authorities Bill, 2020
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Various ports in India
Mains level: Corporatization of ports
Rajya Sabha has passed the Major Ports Authorities Bill 2020 with 88 votes for and 44 against it. The Bill was passed in Lok Sabha in September last year.
Major Ports Authorities Bill 2020: Major: Highlights
- The Bill provides for the regulation of major ports and will replace the Major Port Trusts Act of 1963, and a board of Major Port Authority for each major port will replace the current port trusts.
- The Bill will apply to the major ports of Chennai, Cochin, Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, VO Chidambaranar and Vishakhapatnam.
Boards to replace trusts
- Under the 1963 Act, all major ports are managed by the respective Board of Port Trusts that have members appointed by the central government.
- The Bill provides for the creation of a Board of Major Port Authority for each major port.
- These Boards will replace the existing Port Trusts.
- It will have a member each from the state governments, the Railways Ministry, the defence ministry, and the customs department.
- The Bill allows the Board to use its property, assets and funds as deemed fit for the development of the major port.
Board has financial powers
- Under the 1963 Act, the Board had to seek the prior sanction of the Centre to raise any loan.
- Under the new Bill, to meet its capital and working expenditure requirements, the Board may raise loans from any scheduled bank or financial institution within India, or any financial institution outside India.
- However, for loans above 50% of its capital reserves, the Board will require prior sanction of the central government.
The board will fix rates
- At present, the Tariff Authority for Major Ports fixes the scale of rates for assets and services available at ports.
- Under the bill, which now awaits President’s accent to become a law, the Board or committees appointed by the Board will determine these rates for services that will be performed at ports.
- The services would include the access to and usage of the port assets, and different classes of goods and vessels, among others.
Punishments
- Under the 1963 Act, there are various penalties for contravening provisions of the Act.
- The penalty for setting up any structures on the harbours without permission, for example, may extend up to Rs 10,000, and the penalty for evading rates may extend up to 10 times the rates.
- Under the new Bill, any person contravening any provision of the Bill or any rules or regulations will be punished with a fine of up to Rs one lakh.
Opposition criticism
- Opposition parties had opposed the legislation terming it the move to privatize ports.
- They said that this Bill is nothing but a retraction of the Singapore model.
- When there were hue and cry that there cannot be the privatization of ports, it adopted a policy of so-called corporatization. Thereafter, it ultimately privatized its ports.
- So, corporatization is the first step. The next in the offing is privatization said the opposition.
What did the govt. say?
- The government has brought in a provision that will allow ports to take their own decisions. To change tariffs, the ports have to now approach the ministry.
- The port sector in the last six years has doubled the profit. Profit has increased, liabilities have come down. For modernization, 300 projects are ongoing.
- This Bill is not to privatize any port, but it is to ensure that our ports can properly compete with private ports.
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Shipping sector in india
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sagarmala
Mains level: Paper 3- India's shipping industry and challenges
The article deals with the problems faced by India’s shipping sector and suggests the measures to improve the shipping sector.
Importance of shipping for economic growth
- The major economies of the world have always realized the potential of shipping as a contributor to economic growth.
- For instance, control of the seas is a key component of China’s Belt and Road Initiative (BRI).
- However, geographically, China is not as blessed as India, yet, seven of the top 10 container ports in the world are in China, according to the World Shipping Council.
- What aided China’s growth are strong merchant marine and infrastructure to carry and handle merchandise all over the world.
Lack of carrying capacity
- All the shipping infrastructure in peninsular India only helps foreign shipping liners.
- India has concentrated only on short-term solutions.
- Foreign ship owners carry our inbound and outbound cargo. This is the case in container shipping too.
- As a country, we have still not optimized our carrying capacity.
- Much of foreign currency is drained as transshipment and handling costs every day.
- Due to this, members of our maritime business community have also preferred to be agents for foreign ship owners or container liners rather than becoming ship owners or container liners themselves.
- As a result, there is a wide gap between carrying capacity and multi-folded cargo growth in the country.
Way forward
1) Regional cargo-specific ports
- Instead of creating regional cargo-specific ports in peninsular India, we allowed similar infrastructural developments in multiple cargo-handling ports.
- As a result, Indian ports compete for the same cargo.
- We need to make our major ports cargo-specific, develop infrastructure on a par with global standards, and connect them with the hinterlands as well as international sea routes, they will automatically become transshipment hubs.
- We need to only concentrate on developing the contributing ports to serve the regional transshipment hubs for which improving small-ship coastal operations is mandatory.
2) Sagarmala
- Sagarmala aims are port-led industrialization, development of world-class logistics institutions, and coastal community development.
- Sagarmala will help in increasing domestic carrying capacity.
- Shipbuilding, repair, and ownership are not preferred businesses in India and the small ship-owning community in India also prefer foreign registry instead of domestic registration.
- If this has to change, there needs to be a change in the mindset of the authorities and the maritime business community.
- ‘Make in India’ will result in multi-folded cargo growth in the country, we need ships to cater to domestic and international trade.
- Short sea and river voyages should be encouraged.
- Shipbuilding and owning should be encouraged by the Ministry.
- The National Shipping Board is an independent advisory body for the Ministry of Shipping, where the Directorate General of Shipping (DGS) is a member.
- The NSB should be able to question the functioning of the DGS, which is responsible for promoting carrying capacity in the country.
- Coastal communities should be made ship owners.
- This will initiate the carriage of cargo by shallow drafted small ships through coast and inland waterways.
- Sagarmala should concentrate on consolidating the strength of the coastal youth and make them contribute to the nation’s economy with pride.
Consider the question “How shipping contributes to the economic prosperity of a country? Suggest the steps need to be taken to develop its shipping sector.”
Conclusion
Shipping plays an important role in the economic development of a country. India needs to focus on developing it to achieve the economic prosperity.
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Gujarat Maritime Cluster Project at GIFT City
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Gujarat Maritime Cluster
Mains level: Need for a Maritime Cluster in India
The Gujarat Maritime Cluster coming up in the GIFT (Gujarat International Finance Tec-City) City at Gandhinagar will be a dedicated system to address logistics of ports and seaways.
Try answering this:
Q.What do you mean by Central Business Districts? How it is different from a Special Economic Zone (SEZ)?
What is a Maritime Cluster?
- The concept of the maritime cluster is new to India, but these clusters have been driving some of the most competitive ports of the world like Rotterdam, Singapore, Hong Kong, Oslo, Shanghai, and London.
- Simply put, a maritime cluster is an agglomeration of firms, institutions, and businesses in the maritime sector that are geographically located close to each other.
Gujarat Maritime Cluster
- While the project was conceptualized back in 2007, it received in-principle approval from the state government only in 2015.
- The Gujarat Maritime Board (GMB), a nodal agency of the Gujarat government, has been trying to develop such a cluster at GIFT City in the state capital Gandhinagar.
- This cluster will initially consist of Gujarat-based shipping lines, freight forwarders, shipping agents, bunker suppliers, stevedores, and shipbrokers with chartering requirements.
- In the second stage, the cluster would attempt to bring Indian ship owners, ship operators, Indian charterers and technical consultants scattered in cities like Mumbai, Chennai, and Delhi to Gujarat.
- Thereafter it would target to attract global players in the maritime sphere.
Need for a maritime cluster
- This project will try to bring back businesses that have migrated over the years to foreign locations due to the absence of the right ecosystem in the country.
- Gujarat has a lot of ports and handles 40 per cent of the country’s cargo, but it does not target the entire value chain.
- Since we didn’t have the ecosystem, a lot of Indian companies have moved to foreign locations. For instance, Adani Group has the biggest port in Gujarat, but for their chartering needs, they are based out of Dubai.
Back2Basics: GIFT City, Gandhinagar
- GIFT city is India’s first operational smart city and international financial services centre (much like a modern IT park).
- The idea for GIFT was conceived during the Vibrant Gujarat Global Investor Summit 2007 and the initial planning was done by East China Architectural Design & Research Institute (ECADI).
- Currently approximately 225 units/companies are operational with more than 12000 professionals employed in the City.
- The entire city is based on concept of FTTX (Fibre to the home / office).The fiber optic is laid in fault tolerant ring architecture so as to ensure maximum uptime of services.
- Every building in GIFT City is an intelligent building. There is piped supply of cooking gas. India’s first city-level DCS (district cooling system) is also operational at GIFT City.
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Ghogha-Hazira Ferry Service
Note4Students
From UPSC perspective, the following things are important :
Prelims level: RO-RO ferry services
Mains level: Not Much
PM has virtually inaugurated the Ghogha-Hazira Ro-Pax ferry service in Gujarat.
Try this question from CSP 2016:
Q.Recently, which of the following States has explored the possibility of constructing an artificial inland port to be connected to the sea by a long navigational channel?
(a) Andhra Pradesh
(b) Chhattisgarh
(c) Karnataka
(d) Rajasthan
Ghogha-Hazira Ferry Service
- It will work as a Gateway to South Gujarat and Saurashtra region. It will reduce the distance between Ghogha and Hazira from 370 km to 90 km.
- It has a load capacity of 30 trucks (of 50 MT each) on the main deck, 100 passenger cars on the upper deck and 500 passengers plus 34 crew and hospitality staff on the passenger deck.
- The reduced cargo travel time from 10 to 12 hours to about four hours will result in huge savings of fuel (approx 9,000 litres per day) and lower the maintenance cost of vehicles drastically.
- The ferry service, while making three round trips per day on the route, would annually transport about 5 lakh passengers, 80,000 passenger vehicles, 50,000 two-wheelers and 30,000 trucks.
Benefits
- It will reduce the fatigue of truck drivers and enhance their incomes by giving them more opportunity to do extra trips.
- It will give an impetus to the tourism industry with ease of access to the Saurashtra region and lead to the creation of new job opportunities.
- With the onset of ferry services, the port sector, furniture and fertilizer industries in Saurashtra and Kutch region will get a big boost.
- Eco-tourism and religious-tourism in Gujarat, especially in Porbandar, Somnath, Dwarka and Palitana will grow exponentially.
- The benefits of enhanced connectivity through this ferry service will also result in increased inflow of tourists in the famous Asiatic lion wildlife sanctuary at Gir.
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National Authority of Ship Recycling (NASR)
Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Authority of Ship Recycling (NASR)
Mains level: Not Much
The Central government has notified the Director-General of Shipping as the national authority for recycling of ships under the Recycling of Ships Act, 2019.
The ‘Hong Kong Convention’ is the odd man out here. Read more about the convention at:
[pib] Hong Kong International Convention for Safe Recycling of Ships 2009
About NASR
- The national authority of ship recycling will be set up in Gandhinagar, Gujarat.
- The location of the office will benefit the ship recycling yard owners situated in Alang, Gujarat which is home to the largest ship recycling industry in the world.
- DG Shipping is authorized to administer, supervise and monitor all activities relating to ship recycling in the country.
- DG Shipping will oversee the sustainable development of the ship recycling industry, monitoring the compliance to environment-friendly norms and safety and health measures for the stakeholders.
- DG Shipping will be the final authority for the various approvals required by the ship-recycling yard owners and state governments.
Recycling of Ships Act, 2019
- Under the Ship Recycling Act, 2019, India has acceded to the ‘Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships’.
- This was adopted by the International Maritime Organization (IMO).
- DG Shipping is a representative of India in the IMO and all the conventions of IMO are being enforced by DG Shipping.
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What are SAROD-Ports?
Note4Students
From UPSC perspective, the following things are important :
Prelims level: SAROD-Ports
Mains level: Not Much
Union Ministry of Shipping has e-launched ‘SAROD-Ports’ (Society for Affordable Redressal of Disputes – Ports).
Try this MCQ:
Q.The term SAROD is sometimes seen in the news with context to governance is related to:
(a) Disputes Redressal
(b) Employment
(c) Sustainable Development
(d) None of the above
SAROD Ports
SAROD-Ports are established under the Societies Registration Act, 1860 with the following objectives:
- Affordable and timely resolution of disputes in a fair manner
- Enrichment of Dispute Resolution Mechanism with the panel of technical experts as arbitrators.
- They consist of members from the Indian Ports Association (IPA) and Indian Private Ports and Terminals Association (IPTTA).
- They will advise and assist in settlement of disputes through arbitrations in the maritime sector, including ports and shipping sector in Major Port Trusts, Non-major Ports, including private ports, jetties, terminals and harbours.
- It will also cover disputes between granting authority and Licensee/Concessionaire /Contractor.
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[pib] India’s first trans-shipment hub – Vallarpadam Terminal of Cochin Port
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Major ports of India
Mains level: Not Much
The Ministry of Shipping has reviewed the development activities of the Vallarpadam Terminal of Cochin Port, envisaged as first trans-shipment port of India.
Try this question from CSP 2016:
Q.Recently, which of the following States has explored the possibility of constructing an artificial inland port to be connected to the sea by a long navigational channel?
(a) Andhra Pradesh
(b) Chhattisgarh
(c) Karnataka
(d) Rajasthan
Vallarpadam Terminal
- The Kochi International Container Trans-shipment Terminal (ICTT), locally known as the Vallarpadam Terminal is located strategically on the Indian coastline.
- It is the terminal at the port which handles containers, stores them temporarily and transfers them to other ships for the onward destination.
- It is proposed to be developed as the most preferred gateway for South India and leading transhipment hub of South Asia.
It successfully fulfils all the criteria which are needed to develop it as trans-shipment hub which include:
- It is best positioned Indian port with regard to proximity to International sea routes;
- It is located at least average nautical distance from all Indian feeder ports;
- It entails connectivity which has multiple weekly feeder connections to all ports on West & East Coast of India, From Mundra to Kolkata;
- It has proximity to key hinterland markets of India;
- It has the infrastructure to manage large ships and capacity to scale it up as per requirement.
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International Convention for the Prevention of Pollution from Ships (MARPOL)
Note4Students
From UPSC perspective, the following things are important :
Prelims level: MARPOL
Mains level: Maritime pollution control and its international mechanism
The Ministry of Shipping has informed about the steps taken for prevention and control of pollution arising from ships in the sea and in the inland waterways under the MARPOL Convention.
Aspirants must note the following things:
1. If the convention is a subsidiary to the United Nations/IMO,
2. Whether it is Legally binding?
3. If India is a signatory or not …..
MARPOL Convention
- MARPOL is the main international convention aimed at the prevention of pollution from ships caused by operational or accidental causes.
- The Protocol of 1978 was adopted in response to a number of tanker accidents in 1976–1977.
- It is one of the most important international marine environmental conventions.
- It was developed by the IMO with an objective to minimize pollution of the oceans and seas, including dumping, oil and air pollution.
- The Convention includes regulations aimed at preventing and minimizing pollution from ships – both accidental pollution and that from routine operations – and currently includes six technical Annexes.
- India is a signatory to MARPOL.
- It has six annexes (I to VI) and it deals with prevention of (1) Pollution from ships by Oil, (2) Noxious liquid substances, (3) Dangerous goods in packaged form, (4) Sewage, (5) Garbage and (6) Air pollution from ships respectively.
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Private: Major Port Authorities Bill, 2020
Context
- Major Port Authorities Bill 2020 was recently introduced in the Lok Sabha by the Ministry of Shipping.
- The Bill aims to replace the Major Port Trusts Act, 1963.
- It seeks to provide for regulation, operation and planning of Major Ports in India and to vest the administration, control and management of such ports upon the Boards of Major Port Authorities.
- This will empower the Major Ports to perform with greater efficiency on account of full autonomy in decision making and by modernizing the institutional framework of Major Ports.
Background
Ports in India
- India is the sixteenth largest maritime country in the world, with a coastline of about 7,517 km. The Indian Government plays an important role in supporting the ports sector.
- According to the Ministry of Shipping, around 95 per cent of India’s trading by volume and 70 per cent by value is done through maritime transport
- India has 12 major and 205 notified minor and intermediate ports.
- The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce.
- It has allowed Foreign Direct Investment (FDI) of up to 100 per cent under the automatic route for port and harbour construction and maintenance projects.
- It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.
Major Port authorities bill,2020
Key features of the Bill include:
Jurisdiction
- The Bill will apply to the major ports of Chennai, Cochin, Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, V.O. Chidambaranar, and Vishakhapatnam.
Major Port Authorities Board
- Under the 1963 Act, all major ports are managed by the respective Board of Port Trusts that have members appointed by the central government.
- The Bill provides for the creation of a Board of Major Port Authority for each major port.
- These Boards will replace the existing Port Trusts.
Composition of Board
- The Board will comprise of a Chairperson and a Deputy Chairperson, both of whom will be appointed by the central government on the recommendation of a selection committee.
- Further, it will include one member each from
(i) the respective state governments,
(ii) the Railways Ministry,
(iii) the Defence Ministry, and
(iv) the Customs Department
- The Board will also include two to four independent members, and two members representing the interests of the employees of the Major Port Authority.
Powers of the Board
- The Bill allows the Board to use its property, assets and funds as deemed fit for the development of the major port.
- The Board can also make rules on:
(i) declaring the availability of port assets for port-related activities and services,
(ii) developing infrastructure facilities such as setting up new ports, jetties, and
(iii) providing exemption or remission from payment of any charges on any goods or vessels.
Fixing of rates
- Currently, the Tariff Authority for Major Ports, established under the 1963 Act, fixes the scale of rates for assets and services available at ports.
- Under the Bill, the Board or committees appointed by the Board will determine these rates.
- They may determine rates for:
- services that will be performed at ports,
- the access to and usage of the port assets, and
- different classes of goods and vessels, among others.
- Such fixing of rates will not be with retrospective effect and must be consistent with the provisions of the Competition Act, 2002, or any other laws in force, subject to certain conditions.
Financial powers of the Board
- Under the 1963 Act, the Board has to seek the prior sanction of the central government to raise any loan.
- Under the Bill, to meet its capital and working expenditure requirements, the Board may raise loans from any:
- scheduled bank or financial institution within India, or
- any financial institution outside India that is compliant with all the laws.
- However, for loans above 50% of its capital reserves, the Board will require prior sanction of the central government.
Corporate Social Responsibility
- The Bill provides that the Board may use its funds for providing social benefits.
- This includes the development of infrastructure in areas such as education, health, housing, and skill development.
Public-Private Partnership (PPP) projects
- The role of the Tariff Authority for Major Ports (TAMP) has been redefined. The Bill defines PPP projects as projects taken up through a concession contract by the Board.
- For such projects, the Board may fix the tariff for the initial bidding purposes.
- The appointed concessionaire will be free to fix the actual tariffs based on market conditions, and other conditions as may be notified.
- The revenue share in such projects will be on the basis of the specific concession agreement.
Adjudicatory Board
- The Bill provides for the constitution of an Adjudicatory Board by the central government.
- This Board will replace the existing Tariff Authority for Major Ports constituted under the 1963 Act.
- It will consist of a Presiding Officer and two members, as appointed by the central government.
- Functions of the Adjudicatory Board will include:
- certain functions being carried out by the Tariff Authority for Major Ports,
- adjudicating on disputes or claims related to rights and obligations of major ports and PPP concessionaires, and
- reviewing stressed PPP projects.
Penalties
- Under the 1963 Act, there are various penalties for contravening provisions of the Act.
- For example, (i) the penalty for setting up any structures on the harbours without permission may extend up to Rs 10,000, and (ii) the penalty for evading rates may extend up to 10 times the rates.
- Under the Bill, any person contravening any provision of the Bill or any rules or regulations will be punished with a fine of up to one lakh rupees.
Why need corporatization?
- Indian state-owned ports or major ports (12 in number) account for around 55% of maritime cargo traffic in the country.
- Currently, most major port trusts in India carry out terminal operations as well, resulting in a hybrid model of port governance.
- The involvement of the port authorities in terminal operations leads to a conflict of interest and works against objectivity.
- But, they still have to adhere to a tariff and policy regime that has its roots in the 1960s.
Significance of the bill
- Privatized ports operate under a much more liberal regime and are under the control of state governments.
- They are operationally more efficient and are crucially developed better linkages to the hinterland to enable smooth traffic flows.
- The bill aims at decentralizing decision making and to infuse professionalism in governance of major ports.
- It would help to impart faster and transparent decision making benefiting the stakeholders and better project execution capability.
- The Bill is aimed at reorienting the governance model in central ports to the landlord port model in line with the successful global practice.
- This will also help in bringing transparency in operations of Major Ports.
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Port Infrastructure and Shipping Industry – Sagarmala Project, SDC, CEZ, etc.
Private: Major Port at Vadhavan
Port Infrastructure and Shipping Industry – Sagarmala Project, SDC, CEZ, etc.
Ro-Pax Ferry Service
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ro-Pax Ferry
Mains level: Not Much
Mumbai – the first metropolitan city in India has introduced Ro-Pax service to its transport infrastructure. M2M1 Ferry Vessel has commenced operations between Mumbai and Mandwa.
Ro-Pax Ferry
- Ro-Pax Ferry is a ferry that combines the features of a cruise ship and a roll-on/roll-off service.
- This service has brought much to the relief of daily commuters, job seekers and holiday-goers travelling between Mumbai and Mandwa and also other parts of Alibaug.
- Ro-Pax service enables people to ferry along with their vehicles on board, between Mumbai and Mandwa.
- With this, Mumbai, Alibaug and the adjoining Konkan region will experience a boost in tourism, hinterland connectivity and also job opportunities.
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Port Infrastructure and Shipping Industry – Sagarmala Project, SDC, CEZ, etc.
Places in news: Kolkata Port
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Kolkata Port
Mains level: Ports in India
PM Modi has renamed the Kolkata Port Trust after Dr Syama Prasad Mookerjee, at an event to mark its 150th anniversary.
History of Kolkata’s port
- In the early 16th century, the Portuguese first used the present location of the port to anchor their ships, since they found the upper reaches of the Hooghly river beyond Kolkata, unsafe for navigation.
- Job Charnock, an employee and administrator of the East India Company, is believed to have founded a trading post at the site in 1690.
- Since the area was situated on the river with jungle on three sides, it was considered safe from enemy invasion.
- After the abolition of slavery in the British Empire in 1833, this port was used to ship lakhs of Indians as ‘indentured labourers’ to far-flung territories throughout the Empire.
- During World War II, the port was bombed by Japanese forces.
Its administration
- As Kolkata grew in size and importance, merchants in the city demanded the setting up of a port trust in 1863.
- The colonial government formed a River Trust in 1866, but it soon failed, and administration was again taken up by the government.
- Finally, in 1870, the Calcutta Port Act (Act V of 1870) was passed, creating the offices of Calcutta Port Commissioners.
- In 1869 and 1870, eight jetties were built on the Strand. A wet dock was set up at Khidirpur in 1892. The Khidirpur Dock II was completed in 1902.
- As cargo traffic at the port grew, so did the requirement of more kerosene, leading to the building of a petroleum wharf at Budge Budge in 1896.
- In 1925, the Garden Reach jetty was added to accommodate greater cargo traffic. A new dock, named King George’s Dock, was commissioned in 1928 (it was renamed Netaji Subhash Dock in 1973).
- In 1975, the Commissioners of the port ceased to control it after the Major Port Trusts Act, 1963, came into force.
Significance
- After Independence, the Kolkata Port lost its preeminent position in cargo traffic to ports at Mumbai, Kandla, Chennai, and Visakhapatnam.
- The Kolkata port is the only riverine port on R. Hooghly in the country, situated 203 km from the sea.
- The Farakka Barrage, built in 1975, reduced some of the port’s woes as Ganga waters were diverted into the Bhagirathi-Hooghly system.
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India has a coastline spanning 7516.6 kilometers, forming one of the biggest peninsulas in the world.
According to the Ministry of Shipping, around 95 per cent of India’s trading by volume and 70 per cent by value is done through maritime transport. It is serviced by 13 major ports, 200 notified minor and intermediate ports. The total 200 non-major ports are in the following States:-
Maharashtra (48); Gujarat (42); Tamil Nadu (15); Karnataka (10); Kerala (17); Andhra Pradesh (12); Odisha (13); Goa (5); West Bengal (1); Daman and Diu (2); Lakshadweep (10); Pondicherry (2); and Andaman & Nicobar (23).
source
Present situation of Indian Ports
- The development of port infrastructure in India is not on par with other ports across the world. China’s 10th largest port is 50% bigger than India’s largest, all of India’s 12 ports that are officially classified as “major” carry less traffic between them than the single port-city of Singapore.
- Colombo can handle more container traffic than all of India’s ports put together — With something like three-quarters of that being transshipment of containers from India, because India’s ports are too shallow to accommodate big container vessels. For a country with a long maritime tradition, this is a pathetic state of affairs.
- Indian ships account for a tiny part of the country’s trade: About 15%, compared to the international norm of 40%. It has no civilian shipyards to compare with the world’s best. The two or three private ones that look to build commercial vessels are deep in debt and short of orders; most Indian ship-owners prefer to look to foreign yards, because of better quality and assurance on delivery schedules. In short, India’s maritime business needs a booster shot.
What’s the reason for such situation?
- The cost-inefficiency and non-competitiveness of the cargo has resulted in higher through-port and transport costs.
- Shipping lines avoid touching ports in India because of the long waiting time. The capacity of various ports including Mumbai has already been exhausted and now capacities of other ports like JNPT are on the verge of exhaustion.
- The turnaround time at ports in India is one of the biggest handicaps logistics service providers have to deal with. The major reason for the poor turnaround time at Indian ports is that they are not comparable to global standards.
- There are 12 types of different taxes that Ships have to pay at our Ports
- Three-quarters of Traffic Which Colombo port handles consists of transshipment of containers from India, because India’s ports are too shallow to accommodate big container vessels. This is the reason why Colombo Port handles more ships than all of India’s ports put together.
- Governance issues: Major ports managed by Central govt. while minor ports by state govt. So skewed distribution of traffic, , lack of coordination in port traffic management and non-uniform tariff,resulting in suboptimal utilization of port infra.
- Political pressure, lack of autonomy, absence of incentives, excessive bureaucracy, and hierarchical rigidities are contributors to the current state of the Indian ports
- Inadequate dredging and container handling facilities
- Many major ports are affected by silting and require frequent dredging
- Except for Bombay and Madras, other ports do not have the facility of night navigation and pilots. This hampers working round the clock
Steps taken by Government to improve the situation
- The government has launched Sagarmala and its prime objective is to “promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively.”
- Under this plan, a comprehensive and integrated planning for Sagarmala for the entire coastline shall be prepared within six months which will identify potential geographical regions to be called Coastal Economic Zones (CEZs).
- Government has proposed Central Ports Act 2016 to replace major port trusts act 1963 to give more power and autonomy to the major sea ports. Under the proposed act the Major ports will be able to lease land for port-related use for up to 40 years, and for non-port related activities up to 20 years
- Government has given SEZ status to JNPT port
- Passing of National Water ways Act 2015 and Coastal shipping agreement with Bangladesh which will give boost to coastal and inland waterways.
- Port led industrialization and modernization of adjacent situated areas has been envisaged as mechanism for enhancing indigenous manufacturing potential and creating employment opportunities
- Government has allowed 100% FDI for port development projects
- 100% income tax exemption from income tax is extended to companies investing in port infrastructure. Further, a 10-year tax holiday has been given to enterprises engaged in the business of developing, maintaining and operating ports, inland waterways and inland ports.
- Government has proposed to work towards converting 12 public port trusts in India into corporations under the Companies Act to bring greater efficiencies in operations, raise funds for growth and compete better with their private sector counterparts.
- The Centre recently gave its ‘in-principle’ approval to set up the country’s13th major port at Enayam in Tamil Nadu
What more should be done?
As India eyes resurgence in port-led activities in the country the above mentioned problems faced by Indian ports, indicate the need for the Central government to undertake measures to facilitate trade through Indian ports, either in terms of building and maintaining infrastructure for handling desired capacities or undertaking relevant policy and regulatory reforms. These Reforms should include
- In terms of infrastructure, it is important to maintain draft to serve bigger vessels, ensure mechanisation of ports through introduction of new equipment and procedures, build new facilities, upgrade existing facilities and automate systems/procedures.
- In terms of policy and regulatory reforms, it is important to streamline tariff determination by TAMP along with a provision for periodic revisions, ensure transparent and effective contractual arrangements in PPPs, implement strengthened communication platforms for seamless information flow among stakeholders, strengthen system integration, ensure paperless clearance of procedures and transactions, develop user information portals
- We also need corporatization of our major ports.
- More major Sea ports should be built
There is also need to improve the road connectivity between the ports and Hinterland.