A southern Indian port has established the nation’s newest facilities to handle the world’s largest ships.
The catch? It needs a policy change to bring in the vessels.
Foreign ships are barred from moving cargo between Indian ports themselves. What’s more, congestion, slow turnaround and shallow waters have deterred large vessels from docking locally, sending their cargo to Colombo and Singapore instead. India can potentially recover $260 billion in lost shipping trade annually as Prime Minister Narendra Modi moves to scrap the law under his Make in India push to gain investments.
“We have the infrastructure,” said Chinta Sasidhar, managing director of Krishnapatnam Port Co., which built and manages the port of the same name. “To achieve Modi’s vision, we first need to come out of these laws, get back our cargo to our country, so that ships can straightaway steam up, have internal business.”
More than half of cargo headed in and out of India goes through foreign ports led by the Sri Lankan capital, Colombo, and Singapore. Ships handled 68% of India’s $786.2 billion trade in 2014, according to government data compiled by Bloomberg.
“This government is listening to us,” Sasidhar said in an interview from his office at Krishnapatnam port. “They are moving, but it is not easy because these are rules which were laid long back.”
Sasidhar said he expects the shipping law to be abolished within six months.
Shipping route
Scrapping the regulation won’t necessarily mean bigger vessels docking at the port because the Indian coast doesn’t fall on the main shipping route, said Jayendu Krishna, a director at Drewry Maritime Services Pvt. in Singapore.
“No shipping company would really prefer to do a transshipment unless it leads to some cost savings,” he said.
While the waiver may not help Indian ports to attract traffic bound for Singapore and Colombo, they may manage to get some of the cargo headed for countries such as Bangladesh and Myanmar, said Anand Sharma, a director at Mumbai-based Mantrana Maritime Advisory Pvt.
“For any Indian port to ever replicate Singapore or Colombo, it has to be a big port located on the tip of Kerala and not Krishnapatnam,” Sharma said.
India’s ports have suffered from investments made in a “somewhat haphazard piecemeal fashion” and lack of transport links, according to a government report.
Krishnapatnam port, in Andhra Pradesh state, has a four-lane road linking it to the national highway, a railway line right up to the berths and two helipads for greater connectivity and faster turnaround.
Biggest vessels
Its maximum draft of 18 meters, exceeding that of Colombo and Singapore, means it can handle the biggest ships capable of carrying 18,000 twenty-foot containers, Sasidhar said. Currently, port operations in India are dominated by state-run enterprises.
While a limited capacity and shallow-water berths have deterred foreign vessels, the main obstacle is India’s policy of reserving intra-port trade for local ships, Sasidhar said.
We may have “the largest cranes and the deepest berth, but the ship won’t come because he doesn’t have business,” he said.
Container handling charges in India are also “fairly high” compared to Singapore and Colombo, Drewry’s Krishna said.
That may change if Modi realizes his vision. Under the Make in India campaign, the nation aims to boost the share of manufacturing to 25% of gross domestic product (GDP) by 2022 from 18% now.
For that policy to succeed, companies need to be able to export from local ports, Sasidhar said. The first step is to ensure India is capable of handling its own cargo, he said.
“The impression of the world is that we can’t handle much cargo,” Sasidhar said. “We want to now give the impression to the world that there are ports in India which are very aggressive.” Bloomberg
Source:- livemint.com
No comments:
Post a Comment