With the powers-that-be encouraging private investments in a big way, the non-major ports are eating into the throughput handled by the major ports.
A study conducted by Ernst & Young (EY) in collaboration with Andhra Pradesh Chambers of Commerce and Industry Federation (APCCIF) has confirmed that going by the trend, the non-major ports will account for a majority share of cargo being handled by the port sector in a few years.
The State government also has plans to develop non-major ports at Bhavanapadu in Srikakulam and other places across the State. The National Maritime Development Programme-2020 envisages a huge investment of ₹25,000 crore in major ports in capacity augmentation and modernisation projects.
In tune with NMDP, Visakhaptnam Port, one of the premier ports, is investing ₹6,000 crore to achieve a capacity of 125 million tonne as part of preparation to face the challenges posed by non-major ports in its neighbourhood.
Visakhapatnam Port, which became operational in 1936, is already faced with competition from Gangavaram and Kakinada ports. Krishnapatnam has already launched a container terminal. Orissa Stevedores Ltd has commenced cargo handling by inaugurating a single berth. On the other hand, construction of a container terminal is in progress at Paradip.
Share in total traffic
“Non-major ports constituting a whopping 43% of total traffic in financial year-16, up from 10% in previous fiscal, reflects a huge shift in trade over a period of 10 years with the latter emerging as better choices compared to major ports on the back of strategic location, modernisation, efficiency and better infrastructure while achieving cost competitiveness through optimisation of network and logistics,” the EY report said.
According to the study, global trade went up at a CAGR of 6.9% in value terms during 1990 – 2015 and sea-borne trade constitutes 80% of the global trade by volume.
Whereas in the Indian context, traffic handled at ports has increased at CAGR of 7.4% during 1981-2016 in line with global trade growth.
During the period under review, trade in value increased from $24 billion to $643 billion. In the past decade, India’s trade with countries to its east has been expanding. China has emerged as a dominant partner constituting 7.9% of imports and 1.8% of exports in 2015.
With the government spelling out its focus on various developmental projects under Sagarmala initiative, which Union Shipping Minister Nitin Gadkari spelt out at the recently held CII Partnership Summit, the government wants to transform existing ports and integrate the development of ports, industrial clusters and hinterland evacuation.
The EY study revealed that India can save up to $28 billion in infrastructure investment and another $3.3 billion in transportation cost if 50% of overall trade moves closer to ports by 2020.
