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    ;i*5''iliTt

    OF

    THE

    COMMITTEE

    ON

    STANDARDS

    FOR

    COASTAL

    &

    INLAND

    VESSELS;

    SEA

    LIMITS

    FOR

    INLAND

    VESSELS;

    AND

    INCENTIVE

    SCF{EME

    FOR

    MODAL

    SHIFT

    OF CARGO

    FROM

    ROANRAIL

    TO

    WATERWAYS

    Submitted

    on

    8k

    January

    2014

    SHIPPING

    GOVER1IMENT

    OP INDUI

    "whoever

    controls

    the

    Indian

    ocean,

    dominates

    Asia,

    This

    ocean

    is

    the

    key

    to the

    seven

    seas

    in

    the

    twenty

    I

    century,

    the

    destiny

    of the

    world

    wiil

    be

    decided

    in

    these

    waters,'.

    ffi

    #;{th

    rE\ur:Y

    INISTRY

    OF

    -

    Alfred

    Thayer

    Mi

    ^'l

    ':_)

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    PREFACE

    Maritime

    transport

    has

    been

    recognized

    as

    the

    most

    fuel

    efficient,

    cost

    effective

    and

    environment

    friendly

    transport

    system.

    All

    developed

    countries

    have

    based

    their development

    on

    their

    efficient

    maritime

    infrastructure

    and

    policies.

    2.

    The

    issues,

    as

    terms

    of

    reference

    before

    the

    Committee,

    are

    fundamental

    issues

    affecting

    coastal

    shipping.

    The

    Committee

    has

    endeavored

    in

    the report

    to

    suggest

    pragrnatic

    and

    "doable" recommendation

    for implementation.

    3.

    It

    is

    expected

    that

    the

    relaxation/increase

    in

    the

    area

    of

    operation

    of

    Inland

    vessels

    will

    supplement

    our coastal

    fleet

    capacity.

    Besides,

    cost

    effective

    construction

    and

    operation

    standards

    fbr

    inland

    vessel,

    I

    believe,

    will

    integrate

    the

    operations

    of

    inland

    vessel,

    coastal

    vessels

    and

    the foreign going

    vessels across

    the

    country. Further,

    incentive

    support

    to

    the

    coastal

    vessels

    is

    expected

    to boost

    coastal

    shipping

    and

    bring

    in

    the

    desired

    ideal

    modal

    mix

    which

    will

    have

    direet

    as

    well

    as

    indirect

    impact

    on

    the

    country's

    fuel

    bill resulting

    in

    reduction

    of

    fuel

    cost,

    creating

    positive

    social

    and

    environmental

    impacts.

    4.

    The

    expert

    inputs,

    able

    guidance

    and

    assistance

    of

    the Committee

    members

    and

    the

    valuable

    services

    of

    the concerned

    officials

    in the

    Ministry

    are

    gratefully

    acknowledged.

    The

    co-opted

    members

    from

    various

    organizations

    had played

    avital

    role

    in

    the deliberations

    of

    the

    Committee.

    5.

    The

    inputs given

    by

    Mr.

    Gautam

    Chatterjee,

    Director

    General

    of

    Shipping,

    Mumbai

    were

    invaluable.

    The support

    rendered

    by

    ICC

    Shipping

    Association

    by

    way

    of

    KpMG

    study

    report has

    been

    extremely

    useful.

    The

    Committee

    benefitted

    from

    the

    presence

    and

    valuable

    insights provided

    by

    co-opted

    members

    including

    Shri

    Arun

    Sharma

    of

    Indian

    Register

    of

    Shipping,

    Shri

    Anil

    Devli

    and

    Capt.

    Kekre

    from

    Indian

    National

    Shipowners'

    Association,

    Shri

    Atul

    Jadhav

    from

    All

    Goa

    Barge

    Owner's

    Association

    and

    Capt.

    Sudhir

    Subhedar,

    Capt.

    Kiran

    Kamat,

    Shri

    Aditya

    Suklikar

    from

    ICC

    Shipping

    Association.

    The

    Committee

    also

    benefitted

    from

    the

    presence

    and

    inputs

    from

    capt.

    Suraj

    and

    capt.

    shri

    p.

    p.

    sinha

    from

    Directorate

    General

    of

    Lighthouse

    &

    Lightships.

    6. I

    hope

    that

    the

    Report

    and

    recommendations

    contained

    in

    it

    are

    useful

    to

    the

    Government

    in promoting coastal

    shipping

    and inland

    water

    transportation

    in

    our

    country.

    Captain

    P.V.K.

    Mohan,

    chairman

    of the

    committee

    &chairman

    Nationar

    s.hipping

    Board

    8'n

    January

    2014

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    EXECIITIVE

    SUMMARY

    1.

    Coastal

    shipping

    in

    India

    presently

    accounts

    for

    only

    |yo

    ofthe

    overall

    cargo

    movement,

    which

    is

    low

    eompared

    to

    other

    developed

    countries

    in

    Europe

    and

    Asia'

    The

    coastal

    shipping

    in

    most

    of

    the

    countries

    has

    flourished

    due

    to focused

    policy

    interventions.

    2,

    There

    has

    been

    demand

    to

    extend

    IV

    limits

    for

    sea

    for

    better

    utilizing

    the

    available

    coastal

    fleet.

    Correspondingly,

    the

    safety

    standards

    (manning

    and

    technieal

    standards)

    required

    review.

    The

    Ministry

    of

    shipping

    ser

    up

    a

    Committee

    under

    the

    Chairmanship

    of

    Capt.

    P.V.K.

    Mohan

    for

    looking

    into

    the

    issues

    of

    Inland

    Vessel

    limits,

    standards

    for

    coastal

    and inland

    vessels

    and

    providing

    an ineentive

    scheme

    for

    modal

    shift

    of

    cargo.

    The

    Committee

    after

    detailed

    deliberations

    has

    made

    the

    following

    recommendations:

    (i)

    After

    due

    deliberations

    and

    discussions

    with

    the

    stakeholders,

    the

    Committee

    has

    suggested

    some

    workable

    standards.

    The

    Committee

    has

    noted

    that

    the

    Directorate

    General

    of

    Shipping

    has

    issued

    DGS

    Crder

    No.

    18

    dated

    31.7.2013

    with

    respect

    to

    the

    new

    standards

    for

    adoption

    by required

    by

    River

    Sea

    Vessels.

    The

    Committee

    noted

    that

    the

    same has

    been developed

    with

    the necessary

    input

    from

    the

    Indian

    Register

    of

    Shipping

    (IRS)

    as

    well

    as

    inputs

    from

    the

    industry

    inputs

    and,

    therefore,

    no

    further

    reoommendation

    in

    this

    regard

    are being

    made

    by the

    Committee.

    (ii)

    To

    fix

    Iniand

    Vessel

    Limit (IV)

    and make port

    wise

    recommendation

    -

    India

    is

    a

    party

    to

    United

    Nations

    Conventions

    on Law

    of

    Seas

    (I-JNCLOS)

    in

    which

    the

    different

    maritime

    zones

    are

    demarcated.

    'Ihe

    Ministry

    of

    External

    Affairs,

    the

    administrative

    ministry

    for

    LI{CLOS,

    has

    under

    the

    Maritime

    Zones

    Act,

    notified

    the

    baseline

    for

    the

    entire

    Indian

    coast

    vide

    notifieation

    No.

    SO IITT (E)

    dared

    1'9.2A09,

    The

    water

    inwards

    of

    the

    baseline

    has

    been

    treated

    as

    inland

    waters

    which

    has

    been

    aceepted

    by

    the

    Committee

    as

    the

    limit

    for

    inland

    vessels.

    Based

    on

    the

    recommendations

    of

    the

    Committee,

    the

    Directorate

    General

    of

    Shipping

    has

    accordingly

    issued

    the

    order

    on

    16th

    September

    2013.

    However,

    IWAI

    has

    to firm

    up

    the

    guidelines

    so

    that

    the

    same

    ean

    be

    applied

    by

    the

    states concerned.

    ilPage

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    (iii)

    To

    formulate

    an

    incentive

    seheme

    for

    modal

    shift

    of

    oargo from

    raillroad

    to

    inland

    waterways/coastar

    shipping

    -

    the

    committee

    deliberated

    in

    detaii

    on

    the

    various

    incentive

    scheme

    options

    for

    promoting

    modal

    shift

    and

    keeping

    in

    view

    the implementation

    issues,

    cost

    of

    subsidies

    and

    fund

    requirements,

    recommended

    the following

    incentives/measures

    for

    promotion

    of

    coastal

    shipping:

    1.

    In

    ease

    of

    bulk

    oargoes

    all

    new

    coastal

    cargoes

    on

    Indian

    flag

    vessels

    on

    demonstration

    of

    a fresh

    modal

    shift

    will

    be eligible

    for

    an incentive

    @

    of

    50

    paisa

    per

    tonne

    per

    nautical

    mile

    upl.o

    a

    maximum

    of

    500

    nautieal

    miles.

    The

    ioading

    ports

    will

    administer

    the

    release

    of

    incentive

    based

    on

    their

    reeords

    of

    coastal

    movement

    by

    a

    particular shipper.

    These

    major ports

    will

    be

    eligible

    f

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    4.

    60%

    at

    both

    ends.

    The

    difference

    of

    20%

    may

    be reimbursed

    to

    major

    ports

    by

    Government

    periodically.

    The

    above

    schemes

    may

    be

    operationalised

    for

    a

    period

    of

    five

    years.

    Meanwhile,

    the

    committee

    expects

    that

    two way

    cargo

    movement

    develops

    by

    the

    increased

    awareness

    of

    the

    benefits

    of

    ooastal

    shipping.

    It

    is

    therefore

    recommended

    that

    necessary

    infrastructure

    at

    major

    and

    non-major

    ports

    are

    developed

    to

    cater

    exclusively

    to

    coastal

    cargo

    movement.

    For

    shipbuiiding,

    of

    coastal

    eargo

    vessels,

    the

    committee

    recommends

    that

    a

    total

    excise

    and

    customs

    duty

    waiver

    may

    be

    given

    for

    the

    raw

    materials.

    This

    incentive

    will

    motivate

    shipyards

    from taking

    up vessel

    construction

    of

    coastal

    ships.

    5.

    iiilPage

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    TAT3I,

    11

    OF

    COhI]'E]\TS

    CHAPTER

    1.'

    INTRODUCTION

    CHAPTER

    2..

    COASTAL

    SHIPPING AND IWT

    IN INDIA

    Pg.

    Pg

    No.

    I

    No.5

    Iti

    21

    Pg, No.

    Pg.

    No.

    CHAPTER

    3:

    STANDARDS

    FORCOASTAL

    &

    INLAND

    VESSELS.,.,

    ......

    ps.No.

    I4

    CIUPTER

    4,, SEA

    LIMITS

    FOR

    INLAND

    VESSELS.,,.

    CHAPTER

    5,. INCENTIVE

    SCHEME

    TO

    PROMOTE

    MODAL

    5H1FT..,,,.,.

    T.,,IST

    OF'TABLES

    Table

    L'

    Environment

    cost

    and

    Accident

    cost............

    Table

    2:

    Trffic

    at

    major

    ports

    (otterseas

    and

    coastal)

    during

    pas

    rwo

    years....

    Table

    3: Trffic

    handled

    at

    minor

    and

    intermediate

    ports

    during

    2012

    -2013

    and 201I

    -2012

    .....,

    Table

    4: Trffic

    handled

    at

    minor

    and

    intermediate

    ports

    during

    2012

    -2013

    and

    20I

    j

    -20.,2

    ......

    Table

    5:

    Commodity

    specific

    routes

    andvolumes

    Pg.

    no.

    I

    Pg.

    no.

    B

    Fg.

    no,

    9

    Pg.

    no.

    l'

    Pg.

    no,

    2:

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    CHAPTER

    1 : II\:TRODUCTION

    Background

    1.1

    Environmental

    threats

    and

    the

    climate

    change

    emerging

    from greenhouse

    gas

    (GHG)

    emissions

    have

    been

    attracting

    countries

    all

    over

    the

    world

    to

    concentrate

    their

    focus

    on promoting

    a

    modal

    shift

    in

    cargo

    transportation

    from

    road

    to waterways.

    Besides,

    the Indian

    coastline

    and

    our

    waterway

    resources

    are

    grossly

    underutilized

    when

    it

    comes

    to

    moving

    domestic

    cargo.

    Modal

    shift

    also considerably

    brings

    down

    logistic

    and fuel

    consumption

    costs.

    There is

    also

    social

    cosit

    benefit from

    decongesting

    roads

    and

    minimizingroad

    accidents.

    The

    approximate

    estimation

    of

    savings

    on

    account

    of

    modal

    shift

    in

    terms

    of

    environmental

    costs

    and social

    cost is

    given

    in Table

    1

    below:

    Table

    1:

    Environment

    cost

    and Accident

    cost

    ENWRONMENT

    COST

    PER

    TONNE.KM

    ACCIDENT

    COST PER

    TONNE-KM

    MODE

    Road

    (Freight)

    Rail

    (Diesel

    Traction)

    Rail

    (Ele:ctric

    Traction)

    Airways

    MODE

    Road

    -

    Rail

    -

    COST

    Rs. 0.202

    Rs.

    0.051

    Rs.

    0.015

    Rs.

    0.690

    COST

    Rs.

    0.062

    Rs.

    0.001

    Coastal

    Shipping

    Rs.0.030

    Source;

    Flanning

    Commission's

    Total

    Transport

    system

    Study

    by MTES

    I.2

    The

    definition

    of IV

    limits

    under

    the

    IV Act,

    includes

    the terms

    sm66f[

    and

    partially

    smooth

    waters,

    as

    refemed

    in

    the Merchant

    Shipping

    Act

    and

    such

    vessels

    a,s

    per

    their

    standards

    )

    are

    permitted

    upto

    2

    meters

    wave

    heights

    dependin6S

    on

    weather

    conditions.

    The

    States

    of

    Gujarat,Maharashtra

    and

    Goa

    have

    already

    got

    conducted

    significant

    wave

    height

    studies

    of Indian

    National

    Centre fon Ocean

    Informatics

    Sciences

    (INCOIS)

    showing

    limits

    having

    v/ave

    height

    of

    less

    than

    1.80

    m.

    There

    have

    been

    demands

    from

    the industry

    that

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    these

    waters

    to

    be

    declared

    as

    partially

    smooth

    nature

    by

    Ministry

    of

    Shipping

    to facilitate

    declaration

    of

    new

    IV limits.

    There

    have

    also

    been

    demands

    to

    declare

    inland

    water

    limits

    upto

    12

    nautical

    miles

    seaward

    from

    the

    baseline

    for

    utilization

    of

    tonnage

    to

    a

    great

    extent.

    1.3

    To

    bring

    more

    focus

    in its policy

    approach

    towards

    coastal

    shipping

    and

    inland

    waterways,

    the

    Ministry

    of

    Shipping

    constituted

    a

    Committee

    under

    Chairmanship

    of

    Chairman,

    National

    Shipping

    Board

    with

    the

    following

    composition:

    capt P.v.K.

    Mohan,

    Chairman

    National

    Shipping

    Board

    Chair:man

    shri

    M.

    C. Jauhari,

    Joint

    Secretary (Shipping)

    M/o

    shipping

    Member

    Shri

    C.B.

    Singh,

    Adviser,

    IWo

    Shipping

    Member

    Shri B. Poiyaamozhi,

    Development

    Adviser (ports)

    Iwo

    Shipping

    Member

    shri M.

    M.

    Hasija,

    Dy.

    Financial

    Adviser,

    ld/o

    Shipping

    Member

    capt. L.

    K.

    Panda,

    Nautical

    Adviser

    to

    GoI,

    DG

    shipping

    Member

    Shri

    S.

    Dandapat,

    Chief Engineer,

    IWAI

    Member

    Shri

    M.K.

    Saha,

    Director

    (Traffic),

    IWAI

    Member

    Shri R.

    P.

    Khare,

    Chief Engineer,

    IWAI

    Member

    Shri B.

    Krishnamoorthy,

    Dy.

    Secretary

    (MA

    &MG),

    N/Vo

    Shipping

    Member

    Secretary

    I.4

    The

    Committee

    could

    also

    co-opt

    representatives

    from

    the Industry

    viz,

    Indian

    Register

    of

    Shipping,

    Indian

    National

    Shipowners'

    Association (INSA),

    ICC

    Shipping

    Association

    (ICCSA),

    etc

    as

    and

    when required.

    Terms

    of Reference

    1.5

    The

    terms

    of reference

    of

    the

    Committee

    are:

    i.

    flo

    recommend

    standards

    required

    for

    coastal

    and

    inland

    vessels

    as

    different

    from

    seagoing

    vessels (both

    manning

    as

    well

    as technical

    standards)

    including

    review

    of

    existing

    standards;

    ii.

    To

    fix

    Inland

    vessel (IV)

    limits

    and

    make

    port-wise

    recommendations;

    and

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    iii.

    To

    formulate

    an

    Incentive

    scheme

    for

    modal

    shift

    of cargo

    from

    r ail r

    o

    ad

    to inland

    waterways/co

    astal

    shipping.

    The

    order

    for

    setting

    up

    the

    committee

    is

    at

    Annexure

    I.

    Progress

    of

    work

    1,.6

    The

    Committee

    held

    six

    meetings

    on25.4.2013,

    20.6.2013,

    rr.7.2013,

    3I.7.2013,21.8.2013

    and

    12.9.2013

    to

    deliberate

    various

    aspects

    within

    the

    ambit

    of its

    Terms

    of

    Reference.

    I.7

    The

    Committee

    entrusted

    the representative

    of

    the

    Indian

    Register

    of

    Shipping

    and

    the Directorate

    General

    of

    Shipping

    the

    task

    of

    assisting

    it

    with

    respect

    to

    the

    standards

    for

    coastal

    and inland

    vessels.

    1.8 As

    regards

    fixing

    Inland vessel

    Limits

    and

    make

    port

    wise

    recommendations,

    the

    Committee

    requested

    the

    representatives

    from

    the

    Directorate

    General

    of

    Shipping

    and

    the

    Inland

    Waterways

    Authority

    of lndia

    (IWAI)

    to study

    the

    existing

    legislation

    and the

    outcome

    of

    the

    deliberationrs

    on

    the

    issue

    were discussed

    at

    other platforms

    like

    the Maritime

    State

    Development

    Council

    (MSDC)

    Meetings,

    National

    Shipping

    Board

    (NSB)

    meetings.

    The

    Committee

    also

    noted

    that

    different ports

    have

    determined

    their

    port

    limits

    for

    their operation

    and

    notified

    the

    same

    as

    per

    the

    State

    or Ports

    rules.

    There

    was

    no

    uniformity

    in

    the

    declaration

    of

    limits

    which

    was

    based

    on

    commercial

    operations.

    Thus,

    it was

    felt

    that

    instead

    of making port

    wise

    recommendat;ions

    for

    the operation

    of IV

    Craft.,

    it

    would

    be

    appropriate

    if

    a uniform

    standard

    and

    area

    of

    operation

    could

    be

    adopted

    with room

    for

    expansion

    at a Iater

    stage.

    This

    will

    help

    in

    development

    of Inland

    and

    Costal

    maritime

    traffic.

    as

    the

    trade

    develops.

    I.9

    The formulating

    of

    an

    incentive

    scheme

    for

    modal

    shift

    of

    cargo

    from rail

    road

    to Inland

    waterways/costal

    shipping

    was

    a

    challenging

    task.

    The focus

    was

    to formulrte

    an incentive

    mechanism

    more particularly

    a

    sustainable

    one

    which

    generates

    incremental

    increase

    in

    outcome.

    The

    mechanism

    so

    devised

    could

    be

    operationalised

    within

    a

    framework

    in

    which

    the

    Ministry

    of

    Shipping is

    able

    to

    administer

    the

    scheme

    efficiently.

    In

    its

    efforts

    towards

    framing

    the

    scheme,

    the

    Committee

    immensely

    benefitted

    from

    the

    inputs provided

    by Indian

    Coastal

    Conference

    Shipping

    Association

    (ICCSA)

    as

    they

    had

    got

    a

    study

    conducted

    by KPMG

    on

    the

    present

    trend

    of

    coastal

    cargo

    movement

    and in

    identifuing

    scope

    for

    improvement.

  • 8/9/2019 Coastal Shipping _ DG SHIPPING

    10/45

    Organization

    of the Report

    1.1 1 The

    report has

    been

    divided

    into five

    chapters.

    Chapter

    1 is introductory

    in

    nature

    giving

    in

    brief

    the

    background

    leading

    to

    the formation

    of

    the

    Committee,

    its

    composition, Terms

    of

    Reference

    and

    programme

    of

    work.

    Chapter 2

    gives

    the coastal shipping

    and inland

    waterways

    scenario

    in

    India, the

    importance

    and need

    for modal

    shift.

    Chapter 3, 4

    and

    5 covers

    the background

    on the three issues

    involved

    and the

    recommendations

    on

    each of the three

    Terms

    of References respectively.

    ****{

  • 8/9/2019 Coastal Shipping _ DG SHIPPING

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    CHAPTER 2:

    COASTAI

    SHIPPING

    A}ID

    INI"AND

    WATER

    TRANSPORT

    SCENARIO

    IN

    IIIDIA

    Fig 1:

    Modal Mix

    of

    Domestic

    Cargo

    Fig 2:

    Cargo

    Mix

    of Indian

    Coqstal Cargo

    (2011-12)

    Source:

    WMG

    Analvsis

    In India,

    Rail

    and road

    accovrft

    for

    57Yo

    and

    30%

    respectively

    whereas coastal

    shipping

    presently

    accounts for

    only

    7Yo

    of

    the

    overall

    cargo

    movement,

    which is

    very

    low

    compared

    to other

    developed

    counties.

    Apart from

    the fact

    that the

    developed

    countries have

    an

    advantage

    of better

    coastal

    shipping

    infrastructure,

    coastal

    shipping

    in

    most

    of

    these

    countries

    has

    flourished

    due to

    focused

    policy

    interventions.

    The coastal

    shipping fleet

    and

    related

    traffic

    flow

    in

    developed

    countries

    are

    of

    a

    higher

    scale

    compared

    to

    India.

    ,2.3

    Currently, most

    coastal

    movement

    that is

    witnessed

    is

    of

    POL

    (mainly

    govemment

    cargo),

    coal

    and iron

    ore

    (captive

    use).

    However,

    therq

    is

    evidence

    of

    marginal

    increase

    of break

    bulk by

    way

    of

    containers'

    movement

    over

    last

    5

    years.

    Commodities

    presently

    handled

    by coastal

    shipping

    in India

    is largely

    bulk

    and break

    bulk

    cargo. Movement

    of

    general

    cargo through

    coastal

    5

    2.2

    Countries such

    as

    China

    have an enviable

    percentage

    of

    460/o

    and

    8.3oA,

    United

    States

    14

    and 8.3%

    and Europe

    in

    general

    uses 43Yo

    of waterways

    in

    freight

    transport.

    The

    dependence

    on

    the Road

    and rail

    sector

    for

    freight

    movement

    is

    going

    to increase

    the logistic

    cost considerably,

    which

    is at

    a

    very

    high level

    of

    18oZ

    compared

    to

    just

    about 6Yo in

    developed

    countries.

    llote: thue

    of

    lffiwhich i3 stimatBd to b

    O-5%irincludd

    in

    mtakhipping

  • 8/9/2019 Coastal Shipping _ DG SHIPPING

    12/45

    shipping

    is

    presently

    very limited

    in

    quantity.

    The

    category

    of

    'others'

    in

    f\g.2

    above is largely

    general

    cargo

    which has

    seen

    a marginaL increase

    in

    the

    past

    five

    years.

    This

    is

    largely

    attributed

    to

    the

    growth

    of

    containerized

    cirgo,

    especially

    cargo such

    as marble,

    tiles,

    bentonite,

    soda

    ash

    etc

    and increase

    in

    movement

    of

    project

    cargo

    through

    coastal

    shipping. However,

    with

    a

    change in

    India's

    trade

    pattem,

    especially

    the

    "Look-East" policy,

    the

    existing

    pattern

    of

    coastal cargo

    movement

    may

    also

    change

    in the

    coming

    years.

    This is

    more

    so

    in

    view of the expected

    to

    growth

    in EXIM

    trade

    at

    anaverage

    rate

    of 7Yo.

    2.4 Indian

    major

    ports

    do not

    have

    dedicated facilities

    to

    coastal

    shipping

    and

    coastal

    vessels

    are looked

    at

    by

    ports

    from

    the

    view

    point

    of

    its

    ability to

    generate

    revenue.

    The

    upgradation

    of infrastructure

    standards

    in

    port

    faciltities

    and

    development

    of

    connectivity

    infrastructure entails

    lot

    of

    capital

    infusion.

    Facilities

    at

    ports

    like

    Sir

    creek, Dahej,

    Porbandar,

    }irazira,

    Ratnagiri

    lJaigarh,

    Karaikal,

    Ennore,

    Krisnapatnam,

    Kakinada,

    Gopalpur, Haldia

    can be

    rnade

    capable to handle

    exclusive

    coastal

    cargo improving

    India's

    carbon foot

    prirrt.

    2.5

    The

    problems

    of

    low

    draft, inadequate

    dredging

    and

    its

    maintenance,

    slow

    pace

    in

    development

    of

    new

    ports,

    port

    tariff

    structures,

    and such other

    transaction costs

    of

    customs

    and immigration

    have

    also been

    affecting

    costal

    shipping. In

    the

    past,

    the flow

    of bulk

    goods

    from

    west coast

    hinterlands

    to the

    east coast

    hinterlands always

    followed

    the

    coastal

    route.

    For

    instance,

    coal

    from

    Kolkata

    was

    carried

    in

    bulk

    on regular

    basis

    by coastal

    vessels

    to

    ports

    around

    the country

    right

    up to Kandla

    and Bhavnagar

    and

    salt

    in

    bulk

    was carried

    lback

    to Kolkata either

    from Kutchh ports

    or Tuticorin.

    2.6 The

    commodity-wise

    coastal

    traffic

    overseas, coastal

    and total

    at major

    and

    non major

    ports

    are

    given

    at

    Table

    2

    and

    Table

    3

    respectively.

    2.7 Traditionally

    the

    west

    coast

    ports

    have

    been handling

    industrial

    and

    finished

    products along

    with

    the

    petroleum products,

    whereas

    the

    east

    coast

    ports

    have

    been

    handling

    the

    bulk

    and mineral

    products.

    2.8

    Unavailability

    of consolidated

    cargo, return

    cargo

    and

    general

    lack

    of

    awareness

    among shipper

    community

    is

    generally

    the

    cause of low

    coastal

    shipping movement.

    On the

    contrary,

    the high

    penetration

    level

    of

    road

    followed

    by

    rail

    coupled

    with

    the

    ability

    to effect door-to-door

    movemerrt

    of

    cargo makes

    the field

    tougher

    for

    coastal

    shipping.

    2.9 The Karachi

    -

    Rangoon

    stretch

    vide

    Colombo

    was designated

    as coastal

    route. The

    ships

    carried

    rice

    in

    bulk

    as

    well

    as bags

    right

    from

    Rangoon

    to

  • 8/9/2019 Coastal Shipping _ DG SHIPPING

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    Chennai, Tuticorin

    and across

    to Kochi

    and even

    to Kandla

    and on

    the return

    journey,

    salt,

    cement and

    clinker

    were

    the

    cargo carried

    to

    Kolkata.

    Coastal

    vessels freighted

    small

    parcel

    sizes

    of

    general

    cargo

    such

    as

    spices,

    tea, coffee,

    cashew nuts

    coir

    and

    jute,

    until

    efficient

    containerization

    and equally

    rapid rail

    and road systems

    took

    over.

    However,

    due

    to

    missing

    unitization

    phase

    containerization

    took long

    time

    to catch

    up with

    modern

    transpoftation.

    This

    marked

    the shift of

    proportionate

    trading

    activities

    towards

    other modes

    of

    transport such

    as

    rail

    and

    road

    rather

    than coastal

    shipping.

    From

    1992

    to 2002,

    the coastal fleet

    tonnage

    had

    been hovering

    around 0.47

    million

    GT and

    had

    increased

    only marginally

    to 0.6 million gross

    tonnes

    (GT)

    in

    2003.While

    the

    Indian

    overseas

    fleet registered

    II73%

    growth

    in

    numbers

    from 1951

    to 2003,

    the coastal

    fleet inched

    upwards

    in

    the

    colresponding

    period

    to

    2}g%.India's

    coastal

    fleet

    has

    been hovering

    around

    a

    meager

    level

    of

    less

    than 1 million

    gross

    tonnage

    (GT)

    during

    the last

    five

    years.

    Out of the 805

    coastal vessels

    (as

    on

    March

    3I, 2013)

    only

    146

    are

    effective

    cargo

    carrying

    vessels

    constituting

    0.66

    million

    GRT.

    2.10

    Ship acquisition is

    presently

    burdened

    with high finance

    cost

    and low

    term of loan.

    High

    taxation,

    duties

    and compliance

    costs

    are of serious

    concem

    and this is

    compounded

    by

    port

    waiting

    times, inappropriate

    cargo handling

    practices

    and

    facilities.

    2.1I

    In

    order to increase

    coastal

    trade

    and effect

    modal

    shift,

    it

    is necessary

    to

    develop

    minor

    ports.

    Also,

    it

    is vital

    to

    provide

    for connectivity

    of the minor

    ports

    with the road

    and rail

    network.

    Ports like

    the Pipavav port

    had suffbred

    because

    of

    the lack

    of connectivity.

    The Pipavav

    -

    Surendranagar

    rail link

    was

    established

    by the

    port

    of Pipavav

    in

    joint

    venture

    with

    the Indian Railways.

    Given

    the belief that

    the Phase

    3 of the

    National Highway

    Development

    Programme

    would

    provide

    for

    connectivity

    to the minor

    ports;

    higher

    priority

    and

    weightage

    needs

    to

    be

    assigned

    to this.

    2.I2

    High

    share

    of rail

    and road

    can

    be attributed

    to

    the concessional

    rates

    provided

    for

    select

    commodities

    such as fertilizers

    by rail which

    makes

    it

    unviable to

    move

    the

    same

    through

    other modes

    of

    transport

    over longer

    distances.

    Subsidy on

    diesel

    has

    resulted

    in

    actual

    cost

    of

    transportation

    by road

    being lower

    than what

    it

    truly

    is.

    2.13

    There

    is

    a

    need

    for

    effective

    development

    of routes

    between

    production

    and consumption

    locations

    by

    identifuirg

    potential

    cargo

    that

    could move by

    coastal shipping.

  • 8/9/2019 Coastal Shipping _ DG SHIPPING

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