The Telegraph
Since 1st March, 1999
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Cash anchor for coastal shipping overdrive

New Delhi, Dec. 7: The ministry of shipping has drawn up an ambitious Rs 10,000-crore plan to give a major fillip to coastal shipping.

The proposal includes a Rs 1,220-crore package to develop 20 minor ports to provide better docking facilities for the movement of coastal cargo. Another Rs 2,400 crore has been allocated for the establishment of dedicated terminals for coastal cargo at the major ports.

The target is to nearly double the current share of coastal shipping in the movement of the nationís domestic cargo by weaning away a neat chunk of the road and rail freight traffic.

The 10-year plan, which was discussed at an inter-ministerial meeting recently, expects to raise as much as Rs 5,600 crore from financial institutions, including the World Bank and the Asian Development Bank.

The central government will allocate Rs 2,620 crore for the project, while the maritime states are expected to chip in with another Rs 580 crore. The remaining Rs 1,200 crore is expected to come as equity from the private sector.

The shipping ministry is in favour of granting infrastructure status to coastal shipping so that it becomes eligible for cheaper loans. The proposal also envisages the setting up of a coastal shipping development agency for providing soft loans for buying coastal ships and coastal cruise vessels. The plan provides an outlay of Rs 5,000 crore for acquiring 200 coastal vessels at an average price of Rs 25 crore a piece.

The fiscal concessions proposed for coastal shipping sector include a duty waiver on the import of spares for coastal ships and extending the duty-free bunker facility currently provided for foreign going vessels to coastal shipping as well.

The minor ports to be taken up for development in the first five years are Gopalpur, Cuddalor, Vizhanjam, Azzhikhal, Malpe, Karwar, Ratnagiri, Dharamtar, Magdall, Kakinada, Krishnapuram, Sikka, Pipavav and Mundra. Another set of 20 ports are proposed to be selected for development during the second five-year period so that more cargo is generated for the coastal sector.

The plan also provides for establishing dedicated terminals at each major port for the use of coastal ships and coastal cruise vessels.

The proposal highlights the fact that although 67 per cent of the current movement of coastal cargo is handled at major ports there is a lack of adequate dedicated terminals at these ports for this cargo.

Coastal shipping, considered the cheapest of all modes of transport, currently accounts for a measly 7 per cent of the countryís total domestic cargo movement. This is in sharp contrast to the European Union where its share is as high as 43 per cent.

The trend analysis of the current coastal traffic data indicates that there is scope for diverting at least 4 million tonnes of cargo to coastal shipping every year from the road and rail sectors without any increase in transport costs.

The shipping ministry is of the view that with its new plan of action this diversion can be increased to 12 million tonnes per year by 2012 so that the share of coastal shipping goes up to around 12 to 13 per cent.

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