Big investments needed to boost seaborne trade: Assocham
Time：2014-10-09
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“This would require massive investment to the tune of over ?17,000 crore as there is a need to augment port capacity by over 140 mt from the current level of about 690 mt,” according to Shipping Industry: Today & Tomorrow, a study conducted by Assocham.
Level playing
“ Private sector participation is imperative for such huge investments in the shipping sector,” said DS Rawat, Secretary-General of Assocham, while releasing the study.
Lack of a level-playing field for private operators, hinterland connectivity, especially lack of co-ordination between road, rail and port authorities, and proper risk allocation are certain key issues affecting port development in India, he said.
Ageing fleet
The Government needs to act as a facilitator to create opportunities for attracting fresh investments in the shipping sector, more so as about 40 per cent of India’s fleet of ships are over 20 years old, indicating slow rate of new fleet addition.
This is good news for the ?7,300 crore shipbuilding and ship-repair industry as the older fleet requires frequent and extensive repair and maintenance. “However, this makes the Indian fleet less competitive as mostly young vessels below 15-years-old are often preferred in international trade.”
Share in global traffic
A drastic decline in share of Indian ships in carriage of global trade traffic over the years is a significant concern. Indian shipping carriage dropped from about 36 per cent to just about 8 per cent between 1990-91 and 2009-10.
“This is causing a drain on precious foreign exchange in terms of payment of freight charges and this could instead be used for other high priority imports and scaling up infrastructure facilities.”
India can save up to ?26,000 crore by 2016-17 if we can increase the share of coastal shipping in total traffic carriage, thereby reducing the burden on other modes of transport. There is a need to encourage coastal shipping as a viable mode of bulk freight transportation as it has just about 3 per cent of share in carrying regional traffic.