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Coastal Shipping requires urgent attention

Water transport is the preferred mode of transport all over the world as it is economical, cost saving, less prone to pilferage and damage, reduces road congestion and accidents, clean and green mode of transport and proved to be a valuable asset during emergencies and calamities. Coastal shipping is ideal for carriage of both dry and liquid bulk cargoes.

India is blessed with a huge coast line of 7516.6km comprising of 6100 km of main land and 1197km of islands coast covering 13 states and union territories. The main land coast line extends from Rann of Kachchh in the west to the river Subarnarekha in the east with Kanyakumari being the south most point. 12 major ports and 168 non major ports serve the maritime trade of the country. However coastal shipping continues to be an untapped sector in our country contributing merely 6% of domestic trade.

It is a well known fact that water transport is the preferred mode of transport all over the world due to following advantages, namely

  1. Facilitate transport of large volume of commodities providing economy of scale and so helps in cost saving for shippers and Government
  2. Less prone to pilferage and damage
  3. Reduces road congestion and so road accidents
  4. Provides cleaner and greener environment by cutting down air pollution
  5. A valuable asset during emergencies and calamities

Coastal shipping is ideal for carriage of dry bulk commodities like coal, mineral, grain, fertilizer, cement, salt etc and liquid bulk cargoes like petrol, diesel, kerosene, aviation fuel besides containers, project and over dimension cargoes, RORO cargoes of trucks, trailers and other commercial vehicles etc.

Government’s initiative:

From time to time Government has declared various initiatives to assist coastal shipping but it has not yield the desired result.

Some of the initiatives declared recently by the Government are:

  1. Coastal Berth scheme under the Sagarmala Programme provides financial aid for development of infrastructure for coastal shipping in the major/non major ports to handle cargo and passengers.
  2. Cabotage relaxed for five years for specialized vessels (RORO, RO-PAX)
  3. Customs and excise duty exemption on bunker fuel for Container vessels
  4. Exemption of Light house dues for coastal vessels
  5. Green channel clearance for coastal cargo
  6. Coastal fleet

India’s coastal shipping tonnage as on 31.12.18 was 16,32,864 DWT, comprise of 945 vessels. Most of the vessels are of tugs, dredgers, OSV etc. Cargo vessels are of 100 plus in number of 0.7 to 0.8 million tonnes dwt. It shows the Indian bottom is grossly under capacity to meet the costal movement of potential 200 million tonnes of cargo per annum.

  1. Port facilities and charges in Major Ports

At present thermal coal is the major commodity for coastal shipping mainly handled through port facilities of Haldia Dock Complex, Paradip, Vishakhapatnam, Ennore and Tuticorine. This cargo is handled at dedicated berths using mechanical loading/ unloading system. POL and Iron ore along with coal constitute 90% of the coastal movement. There are no dedicated berths at Major ports for handling of coastal traffic.

For the services rendered Port charges are mainly consisting of vessel related and cargo related charges. Vessel related charges comprise of Port dues, Pilotage and towage and berth hire charge while cargo related charges are wharfage and storage .Besides above charges stevedoring charges are to be paid for loading/unloading of cargo, to private stevedoring companies or to Ports, where port perform stevedoring work.

While ports are giving concession in vessel related charges and wharfage to certain cargoes for coastal movement, same needs a relook for the promotion of coastal shipping.

  1. Ship building and repairing facilities

Most of the Indian ship owners prefer to build their fleet abroad mainly for timely delivery. Dry docking and ship repairing facilities available in the country to carter to Indian fleet is inadequate. These facilities need equal attention for the coastal shipping to be cost effective.

  1. Dedicated Port Facilities for costal cargo

Each maritime state may develop a dedicated port facility for handling of coastal cargo. These facilities could run independently or could be under the administrative control of an existing port. The facilities need to have adequate infrastructure to serve as a transfer point between coastal shipping and inland water ways, rail and road traffic. Since these facilities aim at handling smaller size vessels those can be built at a much lesser capital cost and so also will have less maintenance cost. As various regulations applicable to foreign going vessels will not be applicable, the operation cost will reduce. Coast Guard and Navy may invest in these ports to have their dedicated berthing facility.

  1. Ship canal connecting east and west coasts

At present coasting vessels are required to navigate via Srilanka coast. This adds nearly two days to the voyage time between east and west coast ports. Construction of a ship canal connecting Gulf of Mannar and Palk Strait without damaging the Rama setu or Adam’s Bridge will give a much boost to coastal shipping. This will also facilitate faster movement of Naval and Coast Guard vessels between the coasts. The project though conceived during British raj around 1860 and its alignment has been changed 5 times due to various reasons since then, the project is yet to see light of the day. Considering the huge capital and maintenance cost involved in dredging activities the canal need to be dredged to a depth sufficient to facilitate the safe passage of shallow draft coastal vessels only. Comparison of the canal to that of Suez or Panama will serve no purpose.

Growth of coastal shipping will not only make transportation of goods cheaper and cut down pollution and road accidents but also will create a large number of jobs both on and off shore. This calls for a coordinated effort on the part of Government, Ship operators, Ports, transport companies and various agencies involved in the supply chain management.

This much neglected sector definitely requires a boost.

About Capt. D.K. Mohanty

Former Chairman and Managing Director of Dredging Corporation of India Ltd

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