#117 The Coastal Shipping Industry in India

  "The country's coastal economy is being strengthened through the Sagarmala programme,           wherein along with modernization of old ports, new ones are being built. We believe that our     Ports are gateways to development. Therefore the government has launched the Sagarmala     programme to modernize the connectivity and infrastructure on the coast”

                                                                                  - Prime Minister Narendra Modi

Introduction
______________________________________________________

    The Sagarmala programme is the flagship programme of the Ministry of Ports, Shipping and Waterways to promote port-led development in the country by taking advantage of India's 7,500 km long coastline, 14,500 km long potentially navigable waterways and the strategic location on major maritime trade routes. The core vision of the Sagarmala programme is to reduce the logistics cost for EXIM and domestic trade with minimal infrastructure investment.

• The concept of Sagarmala was approved by the Union Cabinet on 25th March, 2015 
• Hon'ble Prime Minister released the National Perspective Plan (NPP) for the holistic development of  the Indian Coastline and Maritime Sector on 14th April, 2016 
• Currently, a total of 802 projects worth Rs. 5.5 lakh crore are part of Sagarmala Programme. 
• Out of these, 217 projects worth Rs. 1,12,239 crores have been completed and 225 projects worth Rs. 2.17 lakh crore are under implementation. 

Improvement Measures

______________________________________________________

• Modern governance of major ports 
• Ease of Doing Business
• Berthing Policy 
• Operations Policy 
• Policy Guidelines for Land Management 
• One Time Settlement Scheme 
• Institutional Mechanism for Dispute Redressal 
• Enterprise Business Systems 
• NLP-Marine 
• Shipbuilding Financial Assistance Policy 
• Biometric Seafarers Identity Document (BSID) 
• Online Exit Exam 
• Private Sector Participation in IWT 
• Increasing IWT Cooperation with Bangladesh
• Promoting multi modal transport 
• Establishment of new mega port

                      

Increasing Efficiency

______________________________________________________

Modern governance of major ports

      A new era has begun for the administration of major ports in India, in which they will have greater autonomy in decision making, adopting the 'Landlord Model' of development and providing world class port infrastructure.

Ease of Doing Business (EODB) in Major Ports and Shipping Sector:

• Creating Smart Ports - Several steps are being taken towards making major ports smart ports including implementation of  Port Community System 1x; Logistics Data Bank Service; RFID Solutions; Enterprise Business Systems; Direct Port Delivery (DPD); Direct Port Entry (DPE); scanners/ container scanners and simplifying the procedures.
• Digitization in Services - In order to bring transparency and accountability, Director General of Shipping has introduced online training of seafarers, Biometric Seafarers Identity Document (BSID) as well as digitization of its services for issuance of certificates of ratings, etc.
• Smooth Data Flow - A centralized, web-based Port Community System (PCS) has been commissioned across all major ports which enables smooth data flow between different stakeholders through a common interface.
• PCS/NLP(M) - The Port Community System (PCS) has integrated the electronic flow of business-related documents/information and functions as a centralized hub for the secure exchange of electronic messages between all major ports of India and other stakeholders like shipping lines/agents, surveyors, stevedores, banks, container freight stations, customs agents, importers, exporters, railways/concor, government regulatory agencies etc. In past few years, keeping in mind the ease of doing business, many new features like e-delivery order, e-invoicing and epayment have been added to PCS1x. Now Ministry of ports shipping and waterways is launching National logistics portal(Marine) in Dec 2022, which will substitute PCS 1X. The new portal will directly connect more stakeholders and support end-to-end Logistics. Tracking and tracing along with latch-on software facilities will also remain available on this portal. India ports Association is running the Unnati Portal which is fetching traffic and other information from the port and publishing it to the website. This portal has created it transparent mechanism of data sharing between Port and different stakeholders.  
• Establishment of New major port in Vadhavan: The Union Cabinet in its meeting held in February 2020 has given 'in-principle' approval for setting up a Major Port at Vadhavan in Dahanu, Maharashtra. The total estimated cost of this project is about Rs 65,544 crore. The Vadhavan port will be developed on the 'Landlord Model'. Jawaharlal Nehru port entered into a joint venture agreement with Maharashtra Maritime Board and have established a limited liability company registered under the Companies Act,2013 namely "Vadhavan port Projects Limited" have 74% and 26% equity stake respectively to execute Vadhavan port project. The SPV will develop the port infrastructure including reclamation, and construction of breakwater besides establishing connectivity to the Hinterland. 

Policies to Boost Productivity

______________________________________________________

Berthing Policy:

The new berthing policy came into effect from August 2016. This policy gives a framework of norms. This will improve efficiency at ports and productivity parameters across all ports.

Stevedoring Policy:

The new stevedoring policy has been implemented from July, 2016. This has improved the productivity, efficiency and safety at ports.

Policy Guidelines for Land Management:

Policy guidelines for land management were issued to all major ports. Later, on 17 July 2015, some provisions on easing of policy guidelines for major ports were further clarified. 

One Time Settlement Scheme:

Large lands owned by major ports are under lease of the Government of India or the State Governments. Interest on lease rent and penalty interest has been recovered on which the payments have not been made. Over a period of time this accumulated rent and penalty rent increased considerably and it became a hurdle in the settlement of rent. In order to streamline and speed up the recovery of these huge pending dues of Major Ports, Ministry of Ports, Shipping and Waterways on August, 2019 launched “One Time Settlement Scheme (OTSS)” with Ministries/Departments of Government of India/State Governments. Similarly, a new dispute settlement institutional mechanism in the form of SAROD-PORTS has been set up jointly by Indian Private Ports and Terminals Association (IPPTA) and Indian Ports Association (IPA). 

Shipbuilding Financial Assistance Policy:

           In order to encourage domesc shipbuilding and to provide a level playing field vis a vis foreign shipyards, the Union Cabinet approved the Shipbuilding Financial Assistance Policy for Indian Shipyards on December 09, 2015 for 10 years for shipbuilding contracts secured between 01.04.2016 and 31.03.2026 (including these dates). Financial assistance is granted to Indian Shipyards equal to 20% of the lower of “Contract Price” or the “Fair Price” or “actual payments received”, whichever is least, for a period of at least 10 years commencing 2016-17. This rate of 20% will be reduced by 3% every three years. Budget of Rs. 4,000 crore has been approved by the Government of India. The Directorate General of Shipping (DG(S)) is the implemenng authority for release of Shipbuilding Financial Assistance Policy. The applicaons for release of financial assistance are processed through an online portal in order to expedite the process of release of financial assistance to Indian shipyards. Under the Shipbuilding Financial Assistance policy, an amount of Rs. 29.02 crores was released to Indian shipyards for 12 vessels in FY 2018-19; Rs. 26.97 crores for 7 vessels in FY 2019-20, Rs. 58 Cr was released to Indian shipyards for 23 vessels in 2020-21, Rs. 64.7 Cr was released for 17 vessels in FY 2021-22 and Rs. 20.17 Cr has been released for 12 vessels ll Q2 of FY 2022-23. 

Shipbuilding Financial Assistance Policy(2016-26) has been an improvement over previous shipbuilding subsidy scheme (2002-2007) in following ways:

Integration of Processes

______________________________________________________

Enterprise Business System:

Enterprise Business System (EBS) is being implemented at 5 major ports (Mumbai, Chennai, Deendayal, Paradip & Kolkata) to provide a digital port ecosystem. This will give the ultimate aid to the processes. All re-engineered processes and performance and high standards of each department can be observed and controlled as needed. It also includes standardization of ERP modules (FI, CO, MM, PP, SD, etc.), port operation, asset operation and hospital management system (cafeteria model). The project includes equipping the existing port with the latest computing equipment and network. The infrastructure is also being modernize.

NLP-Marine:

In addition, the process of launching PCS1X is already underway in the National Logistics PortalMarine (NLP-Marine) which will act as a unified digital platform for all maritime stakeholders and Integration of Processes Chapter-5 SAGARMALA NEW DIMENSIONS IN COASTAL ECONOMY 11 provide complete digital solutions. NLP Marine + PCS1X / Platform is envisaged as a central hub for all kinds of interactions with various stakeholders like Ports, Terminals, Shipping Lines Agents, CFS and Customs Brokers, Importers/ Exporters etc. A centralized web based application will be developed which will act as a single window for port community members/stakeholders to securely exchange messages electronically.

• Reducing the transaction time and cost of port business.
• Achieve paperless system in the port sector.
• Implementation of e-commerce portal for port community. 
• Eliminating duplication of documents. 
• Connecting multiple stakeholders.
• Uninterrupted sharing of information among stakeholders.

Biometric Seafarers Identification Document (BSID):

BSID is rolling out new security systems, which include embedding of biometric chip inside security based identity card. Records of each BSID 12 SAGARMALA NEW DIMENSIONS IN COASTAL ECONOMY issued are maintained in a national database so that the relevant information is internationally accessible.

To encourage multimodal transport:

Inland Water Transport terminals are now intermodal terminals, earlier they provided only road and waterway connectivity. On NW-1, two Multi Modal Terminals (MMT) have been constructed at Varanasi and Sahibganj and one more MMT at Haldia is nearing completion. These MMTs also have potential for rail connectivity.

Establishment of new major port: 

The Union Cabinet in its meeting held on February, 2020 has given 'in-principle' approval for setting up of a Major Port at Vadhavan in Dahanu, Maharashtra. The total estimated cost of this project is about Rs 65,544 crore. The Vadhavan port will be developed on the 'Landlord Model'. The implementation of the project will be done by Jawaharlal Nehru Port Trust (JNPT) with equity participation equal to or more than 50% in which all business activities will be undertaken by private developers under PPP mode.

Under Sagarmala programme, 802 projects have been identified with an estimated investment of about Rs.5.53 lakh crore for implementation by the year 2035. These projects are being implemented by the concerned Central Ministries, State Governments, Ports and other agencies mainly through private or PPP mode.

Conclusion

The coastal shipping industry in India holds immense promise. By leveraging its economic and environmental advantages, it can become a cornerstone of India's logistics and transport sector. With the right mix of policy support, infrastructural investments, and technological advancements, the coastal shipping industry is set to navigate a prosperous future, contributing significantly to India's economic growth and sustainable development.