Vasan says that his Ministry will ramp up port infrastructure by 2020
The Shipping Ministry will establish new major ports in Andhra Pradesh and West Bengal as part of a maritime agenda that includes a ramp up of port infrastructure by 2020, G.K. Vasan, Union Shipping Minister, said on Monday.
Inaugurating a national conclave on shipping hosted by the Federation of Indian Export Organisations (FIEO), Mr. Vasan said one of the chief aims of the Ministry’s ‘Maritime Agenda 2010-20’ was the capacity addition of about 3,200 million tones —from the current levels of about 1,000 million tones — to handle an expected traffic increase of 2,500 million tonnes by 2020.
“During this financial year, the Ministry of Shipping will initiate measures to get Union Cabinet approval for establishing the two ports,” Mr. Vasan said.
The ports form part of the set of projects for creation of 244 million tonnes of capacity spread across 42 projects at an estimated cost of Rs.14,500 crore in 2012-13 under a target set by a recent Prime Ministerial review of the infrastructure sector, he said.
The Ministry has also come out with new guidelines to streamline processing of security clearance proposals expeditiously without compromising on security aspects. The move sought to address a situation where the award and implementation of projects to create additional capacity at Indian ports were been affected by factors such as security clearance of bidders, environment clearance, land acquisition and litigation. Efforts are on to get Cabinet clearance for the Shipping Trade Practices Bill, which seeks to bring transparency and uniformity in maritime logistical trade practices.
The extension of tax-free bond scheme for one year to raise funds of Rs.5,000 crore for various projects and reduction in the rate of withholding tax on interest payments on external commercial borrowings from 20 per cent to five per cent for three years would provide impetus to port sector, Mr. Vasan said.
Comprehensive land policy 2010
The comprehensive land policy of 2010 that aimed at optimal use of land was being revised further to bring in more transparency, he said.
According to Mr. Vasan, the tonnage tax introduced in 2004 to provide a fillip to Indian shipping has paid dividends with the sector which was stagnating at around 6 million gross tonnage for almost a decade recording steady growth to aggregate 11 million gross tonnage in 2011.
The capacity of Indian ports went up to more than 1200 million tonnes by March 31 this year from about 1100 million tonnes per annum at the end of the previous financial year.
To further boost the sector’s growth, the Shipping Ministry is in dialogue with Finance Ministry to examine the need for exemption of Minimum Alternate Tax on the book profit on sale of the eligible class of ships and its inclusion within the tonnage tax regime.
The inclusion of interest income on funds deployed out of tonnage tax regime is also among the issues being taken up with the Finance Ministry, Mr. Vasan said.
External trade doubles
Mr. Vasan pointed out that the country’s external trade, as a proportion of GDP had more than doubled in the last 10 years and was close to 40 per cent with shipping accounting for the bulk of this international trade.
“We also expect that in future, high demand for energy will result in increased import of coal and oil. Similarly the container volumes in India are expected to witness high growth in the years to come,” he said.
The Minister also launched a Deloitte status check document on Indian shipping handing over the first copy to M. Rafeeque Ahmed FIEO president.