India has a 7,500-km long coastline, 14,500-km of potentially navigable waterways and is strategically located on key international maritime trade routes. The ambitious project Sagarmala undertaken by the Indian Government aims at leveraging India’s vast coastlines and industrial waterways to drive industrial development. The project is expected to reduce cost and time for transporting goods, benefiting industries and export/import trade.
Sagarmala is a strategic and customer-oriented USD 120 billion investment initiative entailing the setting up of 6+ mega ports, modernisation of several dozen more ports, development of 14+ Coastal Economic Zones and at least 29 Coastal Economic Units and airport linkages with these water ports.
Advantage for India
India has an advantage of being surrounded by water on three sides. This geographical advantage of having a long coastline, and given the importance of the maritime routes between the east and west, ports can play an essential role in achieving the financial and employment targets giving the size of the opportunity. Apart from the financial implications, development of ports is also required from a strategic standpoint if India is to emerge as a major player in manufacturing and export sectors and trading of goods between countries.
The National Perspective Plan
As per the projections mentioned in the plan, the industry shall generate 10 million jobs which include four million direct jobs in the next ten years. The maritime agenda for this decade, i.e. 2011-20 has targeted to generate employment for 2.5 million persons by 2020 in the core shipbuilding as well as ancillary and supporting industry sector. To put the projections in context, between 2009-10 and 2015-16, the total number of jobs created stood at 75 million across industries, resulting in USD 110 billion export revenue growth.
In order to have effective mechanism at the state level for coordinating and facilitating Sagarmala related projects, the State Governments in India will have to set up the State Sagarmala Committee to be headed by Chief Minister/Minister in Charge of Ports with members from relevant Departments and agencies. The state level Committee will also take up matters on priority as decided in the National Sagarmala Apex Committee (NSAC).
The development of each Coastal economic zone (in different States) will be done through individual projects and supporting activities that will be undertaken by the State Government, Central line Ministries and SPVs to be formed by the State Governments at the state level or by SDC and ports, as may be necessary.
The Sagarmala Coordination and Steering Committee (SCSC) will provide coordination between various ministries, state governments and agencies connected with implementation and review the progress of implementation of the National Perspective Plan, Detailed Master Plans and projects.
Shipping Ministry & IIT Madras Centre for Technology & Patents
The shipping ministry has set up a centre in a joint initiative with IIT Madras to accelerate indigenous development of technology and patents, and reduce reliance on costly foreign consultations. One of the central objectives of the centre – National Technology Centre for Ports, Waterways and Coasts (NTCPWC) is to help increase the country’s capital and operational ability to handle complex port projects, while reducing costs arising primarily from foreign consultations.
Some of the areas identified for applied research by the new centre are 2D and 3D modelling of ocean, coastal and estuarine flows, autonomous or self-driven platforms and vehicles, port and coastal engineering structures and breakwaters, dredging and siltation technology. This applied research is expected to be employed in upcoming projects in the next few years, NTCPWC will be working on 11 futuristic projects in the next three years, with the thrust areas being technology development, modelling and software products, bridge simulator and testing facilities.
The Way Forward
Developing rivers as inland waterways can also help save domestic logistics costs too. Transport costs are high in India – 18 per cent of GDP, compared to less than 10 per cent in China. Port infrastructure and linkages have been frankly a sinking ship and initiatives such as ‘Make in India’ cannot take off without better port infrastructure. This has led to expectations that Sagarmala could boost India’s merchandise exports to USD 110 billion by 2025.
Going by the example of Shenzhen in China, since 1978, it helped create an estimated seven million jobs and the city’s GDP grew 50 times to USD 180 billion after the development of ports. If Indian port development takes off similarly, local and foreign funds would flow in and coastal regions may become good bets for real estate too, as they will see industry and job growth. Logistic costs savings of over INR 35,000 crore (USD 5.39 billion) per year can also help the Centre spend on development and possibly reduce taxes.
(References: PIB, The Economic Times, Business Standard, Qrius)
Sea News Feature, March 6