Year End Review -2020 : Ministry of Ports, Shipping and Waterways
In the year 2020, the government has undertaken several important progressive policy interventions and new initiatives to accelerate the overall development of the shipping sector.
COVID Management
To maintain the supply of essential items and provide effective support in fight against COVID 19 pandemic, certain services were declared as essential including transport service for carriage of goods by water. However, Ports and dependent stakeholders faced immense difficulty in carrying out their operations as a result of the Lockdown.
Government took various efforts and initiatives to mitigate the impact of pandemic and ensure smooth functioning of supply chains. Some of the key initiatives taken are as follows:
Ministry of Ports, Shipping and Waterways (MoPSW) and associated bodies issued various advisories/circulars to provide relief to the trade in terms of non-charging of demurrage and other penalties/charges
MoPSW decided to grant compensation /Ex-Gratia of 50 lakhs in the event of loss of life due to COVID-19 to the dependent members/legal heirs of the port employees of Major Ports
Major Ports ensured storage space for cargo and accommodation and food for migrant laborers working in their premises
Major Ports remitted VRC charges for quarantined vessels
Ports ensured availability of PPE kits and other necessary medical devices and medicines and sanitization of all work spaces
Isolation and other medical facilities created at Major Ports
Various technological/digital induction were expedited during COVID-19 pandemic to maintain smooth functioning without human interference, such as:
E-office for internal use; E-invoice, E-payment, E-DO and E-BoL at PCS1x
Utility for Sign-on & sign-off (E-pass module)
Utility for data verification of seafarers from chartered flights
Maritime Training: E-learning, virtual classes, online exit exams
Online ship Registrations & online charter licensing.
MoPSW has facilitated more than 1,00,000 crew change on Indian ports and through charter flights. It is the highest number of crew changes in the world. Crew change consists of replacing one of the ship’s crew members with another one and involves sign-on the ships and sign-off the ships procedures.
Maritime sector is among the worst hit sectors due to Corona pandemic. Despite that, all the Indian Ports were operational and providing essential services throughout the pandemic and main pillar for the smooth supply chain for India and world were the seafarers.
SAGARMALA PROGRAMME
To harness the coastline, 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes, the Government of India has embarked on the ambitious Sagarmala Programme to promote port-led development in the country. The vision of the Programme is to reduce logistics cost of EXIM and domestic trade with minimal infrastructure investment. This includes reducing the cost of transporting domestic cargo; lowering logistical cost of bulk commodities by locating future industrial capacities near the coast; improving export competitiveness by developing port proximate discrete manufacturing clusters, etc. The Sagarmala programme has identified 504 projects under four pillars – 211 port modernization projects, 199 port connectivity projects, 32 port-led industrialization projects and 62 coastal community development projects which can unlock the opportunities for port-led development and are expected to mobilize more than Rs. 3.57 Lac Cr of infrastructure investment.
In the last 15 months (July 2019 – October 2020), 20 Sagarmala projects worth Rs. 4,543 crore have been completed which comprise 9 projects of Port Modernization worth Rs. 1,405crore, 7 Port Connectivity projects worth Rs. 2,799 crore and 4 Coastal Community Development projects worth Rs. 339 crore.
Ghogha – Hazira RoPAX Ferry
Prime Minister Shri Narendra Modi inaugurated the Ro-Pax terminal at Hazira and flagged off the Ro-Pax ferry service between Hazira and Ghogha in Gujarat through video conferencing, on 8th November, 2020.A new maritime connectivity has been established between Bhavnagar and Surat of Gujarat. The service between Hazira and Ghogha will shorten the journey from 10-12 hours to 3-4 hours. This will save time and cost will also be reduced.
New name of the Ministry of Shipping
In the inauguration of Ghogha-HAzira RoPax Ferry, Prime Minister Shri Narendra Modi announced the new name of Ministry of Shipping as Ministry of Ports, Shipping and Waterways.
First Seaplane of India started its operation from Statue of Unity,Kevadiya to Sabarmati River in Gujarat
India’s first Seaplane Service operation inaugurated by Prime Minister Shri Narendra Modi on 31st October,2020, between Kevadia and Sabarmati River front in Ahmedabad. The innovative floating jetties made of concrete is installed by the Inland Water Authority of India to support the seaplane operations. Ministry intends to gauge the interest of airline operators who is interested in the operation of the Seaplane services on the select routes. The key focus is to ensure faster and hassle-free travel of passengers, tourists and pilgrims through seaplanes to destinations which are currently accessible through long and tortuous road journeys.
PORTS
Development of Ports is crucial for the economy. Ports handle around 90% of EXIM Cargo by volume and 70% by value. In order to meet the ever-increasing trade requirements, expansion of Port Capacity has been accorded the highest priority by the Ministry of Ports, Shipping and Waterways through implementation of well-conceived infrastructure development projects. The capacity of major ports which was 871.52 MTPA at the end of March 2014 has increased to 1534.91 MTPA by the end of March 2020. The Major Ports in the country have an installed capacity of 1534.91 MTPA as on March, 2020 and handled traffic of 704.92 MT during 2019-20.
Challenges faced by the shipping and ports sector and recent policy initiatives
The Key Challenges faced by port sectors are as follows:
Improvement in port governance
Low capacity utilization
Improvement in port efficiency
Improvement in port connectivity
In order to overcome these challenges, many initiatives have been taken over the period of last few years. Some of the recent initiatives taken by government are as follows:
A new legislation viz. Major Ports Authority (MPA) Bill, 2020 have been formulated after extensive deliberations and discussions with the stakeholders. The MPA Bill, 2020 has been passed by the Lok Sabha and would be introduced in Rajya Sabha in next session. It will usher in a new era for administration of Major Ports in India in which the Major Ports will have much greater autonomy and contribute significantly to the economic growth and provide world-class port infrastructure by adopting Landlord Model of development
A new Captive Policy for Port Dependent Industries has been prepared to address the challenges of renewal of concession period, scope of expansion, and dynamic business environment
Policy Guidelines for Land Management 2014 were issued to all Major Ports for implementation w.e.f. 2.1.2014. Later, some of the provisions of the Land Policy Guidelines, 2014 were further clarified to ease the implementation of the Policy Guidelines by the Major Ports on 17th July, 2015. Many Major Ports had, however, raised various difficulties in implementing some of the provisions of PGLM, 2015 and requested for further clarifications on the same. To accommodate the various difficulties arising with regard to implementation of the guidelines so as to meet the practical exigencies & requirements in public interest, clarifications on these were issued by the Ministry from time to time and all the clarifications issued have been compiled and have been issued afresh on 29.4.2019.
In order to deal with such cases of arbitration where award has been passed against the Major ports, guidelines for processing Arbitration Awards in Major Ports has been issued on 10.06.2019.
Issue of periodic revision of SoR for land and its applicability on PPP Projects issued on 5.11.2019.
Revised Guidelines on Corporate Social Responsibility (CSR) for Major Ports issued 4.3.2020.
A large extent of Land belonging to Major Ports is under lease with Departments of GoI and State Governments on which interest and Penal interest have been levied in cases of unpaid lease rentals. These interests and penal interests over a period of time have increased quite substantially which is coming in the way of settlement of lease rent. In order to facilitate and expedite the recovery of these huge pending dues of Major Ports, Ministry of Ports, Shipping and Waterways has issued “One Time Settlement Scheme (OTSS)” for settlement of dues with Government of India/ State Government Ministries/Departments on 13th August, 2019.
The Union Cabinet has accorded its ‘in-principle’ approval on February 05, 2020 for setting up a Major Port at Vadhavan near Dahanu in Maharashtra. The total estimated cost of the project is Rs.65,544.54 crore. Vadhavan port will be developed on the “Landlord model”. A Special Purpose Vehicle (SPV) will be formed with Jawaharlal Nehru Port Trust (JNPT) as the lead partner with equity participation equal to or more than 50% to implement the project. The SPV will develop the port infrastructure including reclamation, construction of breakwater, besides establishing connectivity to the hinterland. All business activities would be undertaken under PPP mode by private developers.
A new dispute redressal institutional mechanism in the form of SAROD-Ports has been constituted jointly by Indian Private Ports & Terminals Association (IPPTA) and Indian Ports Association (IPA)
India improved its ranking under the Trading Across Border (TAB) parameter of Ease of Doing business (EoDB) from 80 to 68 in 2020. This impressive record has been facilitated due to various measures like Direct Port Delivery (DPD), Direct Port Entry (DPE), Introduction of RFID, Installation of scanners/container scanners, Simplification of procedures etc., taken by the major ports.
Logistics Data Bank Service under Delhi Mumbai Industrial Corridor Development Corporation Ltd. (DMICDC), for enabling track & trace movement of EXIM container has been implemented in all the Container handling Major Ports
An Enterprise Business System (EBS) is being implemented at 5 Major Ports (Mumbai, Chennai, Deendayal, Paradip, Kolkata (including Haldia) Port with project cost of approx.₹ 320 crores) to provide a digital port ecosystem that will adopt leading International Practices without losing its alignment to existing local needs. A total of 2474 processes (ChPT – 671, DPT – 376, KoPT – 501, HDC – 374, MbPT – 278 and PPT – 274) were rationalized, harmonized, optimized and standardized to arrive at a final reengineered process count of 162 processes
A centralized web-based Port Community System (PCS) has been operationalized across all Major Ports which enables seamless data flow between the various stakeholders through common interface. To move towards complete paperless regime, E-DO(Electronic Delivery Order) through PCS made mandatory along with e-invoicing and e-payment. An upgraded version PCS1x has been launched in December, 2018
In the last one and half year, several new functionalities, focused on ease of doing business, like e-Delivery Order, e-Invoicing and e-Payment have been added in PCS 1x. e-DO through PCS 1x was implemented only for DPD containers but now has been extended to deliveries made by all custodians like Terminals, CFS/ICDs and other Non-Major ports using PCS 1x
Further the process to bootstrap PCS 1x in to National Logistics Portal-Marine (NLP-Marine) is already underway which will act as a Unified Digital Platform all maritime stakeholders. NLP Marine + PCS 1x platform is envisaged as the central hub for all interactions with various stakeholders viz. Port, Terminals Shipping Lines/ Agents, CFS and Customs Brokers, Importer / Exporter etc
Prime Minister Shri Narendra Modi attended the grand Sesquicentenary Celebrations of the Kolkata Port Trust and launched multimodal development projects for Kolkata Port. Prime Minister announced the new name Kolkata Port Trust as Dr. Shyama Prasad Mukherjee Port Trust. Prime Minister handed over Cheque of ₹ 501 Crore towards pension fund of employees of the Kolkata Port Trust
INLAND WATER TRANSPORT
Major Inland Water Transport (IWT) projects are under construction in 2020-21 under the Jal Marg Vikas Project (JMVP) on National Waterway-1 (NW-1) (river Ganga) from Haldia to Varanasi
Under the JMVP being implemented with World Bank assistance, latest technological interventions are being introduced to overcome technical challenges. To support the 24×7 navigation, the digital solutions in the form of state-of-the-art River Information System (RIS) & Differential Global Positioning System (DGPS) is being implemented on NW-1.
Freight Village & Logistics Hubs are proposed to be developed adjacent to the Varanasi and Sahibganj MMTs to enable cargo aggregation & transshipment. Pre-investment works have been initiated for the Freight Village, Varanasi.
On National Waterway (NW-2) (River Brahmaputra), Ro-Ro service between Dhubri & Hathsingimari, Neamati & Kamlabari and Guwahati & North Assam is operational. Work on dredging and setting up of floating terminals have commenced under Phase I of development of NW-4 (river Krishna) between Vijayawada & Muktiyala. Ro-Ro Services between Ibrahimpatnam & Lingayapalam for transportation of construction materials on NW-4 (river Krishna) is also under operation. Inland Waterways Authority of India has commenced works on 10 new NWs declared under the National Waterways Act, 2016. Cargo movement on NWs during FY 2019-20 was 73.61 MMT as against 72.3 MMT during last year. The total cargo movement during April-September, 2020 is 30.38 MMT, which is 16% less than the corresponding period last year owing to COVID-19 induced restrictions.
Ministry of Shipping waived waterway usage charges considering the Government of India’s vision to promote inland waterways as a supplementary, eco-friendly and cheaper mode of transport. The charges are waived initially for three years. The decision is estimated to increase the inland waterway traffic movement to 110MMT in 2022-23 from 72MMTin 2019-20. It will benefit the economic activities and development in the region
To enhance the access and establish alternative waterway connectivity to the North East through Bangladesh, new initiatives and measures are in progress. On the Indo-Bangladesh Protocol route, dredging has commenced between Ashuganj and Zakiganj (295 km) and Sirajganj and Daikhawa (175 km) in Bangladesh by sharing the cost on 80:20 basis (80% by India & 20% by Bangladesh). Cruise movement commenced between India and Bangladesh by private operators of both countries in March-April 2019 under the MoU and Standard Operating Procedure (SOP) on Passenger and Cruise service on the Coastal and Protocol routes signed by India and Bangladesh.
Second Addendum to The Protocol for Inland Water Trade & Transit (PIWT&T) has been signed by the two countries on 20th May,2020 adding 5 Ports of Call and 2 extended Ports of Call on each side.Bangladesh has allowed the use of its Mongla & Chattogram Ports for the movement of goods to and from India under MoU and Agreement/SoP signed for the purpose. Eight routes are provided under the Agreement which would enable access of North East Region (NER) via Bangladesh. The routes identified allow entry/exit to Agartala and Srimantpur in Tripura, Dawki in Meghalaya and Sutarkandi in Assam. In July 2020 wherein both pulses and TMT steel bars were moved from Kolkata to Agartala via Chattogram Port.
SHIPPING: Achievements in the shipping sector
Government has reduced GST from 18% to 5% on bunker fuel for both coastal vessels and foreign going vessels.
Government has brought parity in the tax regime of Indian seafarers employed on Indian flag ships vis-à-vis those on foreign flag ships.
Indian shipping industry has been provided cargo support through Right of First Refusal
In order to assist Indian flag vessels to efficiently offer coastal transportation services between the East Coast and West Coast of India, including North East India as well as carriage of EXIM cargo to/from Sri Lanka/Bangladesh and India, the Government has allowed carriage of coastal cargo from one Indian port to another Indian port via foreign ports in Sri Lanka and Bangladesh.
Due to limited availability of return cargo on most of the coastal shipping routes, the cost of repositioning of empty containers was high, which increases the total logistic cost of coastal shipping. With a view to reduce the logistic cost of coastal shipping, Government has allowed use of Imported Containers for carrying domestic cargo.
In order to provide level playing field between the tax treatment on EXIM containers owned by foreign shipping lines and domesticated containers, Government has allowed use of locally manufactured or domesticated ISO containers conforming to the specifications from the International Organization (ISO), for transportation of EXIM cargo.
Government has removed licensing requirement for chartering of foreign registered ships for encouraging coastal movement of agriculture and other commodities, fertilizers, EXIM laden Transshipment Containers and Empty containers, etc.
Coastal Shipping
Besides being fuel-efficient and environment friendly, Coastal shipping is capable of transporting large volumes of cargoes vis-a-vis other modes of transport and is potentially the cheapest mode of transport. However, due to certain intrinsic impediments, the share of coastal shipping in India is around 6%, which is much lower than that of developed countries. ln order to encourage a modal shift from road and rail and to promote coastal shipping, cabotage has been relaxed for coastal transportation of (a) Exim/empty containers, (b) Agriculture, horticulture, fisheries and animal husbandry commodities and (c) Fertilizers. Coastal vessels are also provided a discount of 40% in port charges over foreign going vessels. Additional concessions have been extended to Ro-Ro vessels and Container vessels engaged in coastal movement of automobiles. Other measures such as reduction of GST on bunker fuel, Green channel clearance for coastal cargoes and priority berthing for coastal vessels at major ports have also been extended to coastal shipping.
Cruise Shipping
Cruise shipping in India is at a nascent stage and Ministry of Ports, Shipping and Waterways and Ministry of Tourism are actively promoting cruise tourism for its vast economic impact, potential for job creation and earning foreign exchange. A national roadmap for development of cruise tourism has been made and various steps have been taken to promote cruise tourism in India, these include extension of relaxation of cabotage for foreign cruise vessels calling Ports of India for a further period of 5 years beyond Feb, 2024 i.e., up to February, 2029, e-visa facilities for cruise passengers arriving in India, and concessional tariff rates for cruise ships.
Shipbreaking
Recycling of Ships Act, 2019 has been enacted by Parliament and notified on 16.12.2019.
India has acceded to the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, 2009 on 28.11.2019.
India is one of the leaders in the global ship recycling industry, with a share of about 25% to 30% of the market.
Shipbuilding
Under the Shipbuilding Financial Assistance policy for Indian shipyards for contracts signed during a ten-year period 2016-2026, an amount of ₹ 29.02 crores was released to Indian shipyards for 12 vessels in FY 2018-19; ₹ 26.97 crores for 7 vessels in FY 2019-20 and ₹ 5.06 crores was released to Indian shipyards for 3 vessels in 2020-21.
The Ministry of Shipping has directed all major ports to procure or charter tug boats which are only made in India. All procurements being done by major ports would now need to be carried out as per the revised ‘Make in India’ Order.
The Ministry of Shipping is aiming to promote Indian shipbuilding industry and also have discussion with some leading countries for Make in India shipbuilding. .
International Ship Repair Facility (ISRF) at Cochin Port Trust
Cochin Shipyard Limited continued to operate the dry-dock & existing facilities in the leased area (first phase) at Cochin Port premises. CSL completed the repairs of eleven ships during the financial year 2019-20. The construction works of the ISRF project, which commenced on November 17, 2017, is progressing in full swing. More than 95% of the piling works, 50% of the deck concreting & 80% of the dredging activities are completed and the facility is expected to be commissioned in FY 2021-22. As a part of the effort to develop Kochi as a maritime hub of India, CSL had set up a Maritime Park near to the International Ship Repair Facility at Willingdon Island, which was inaugurated by Minister of State (Independent Charge) for Shipping, Shri Mansukh L Mandaviya on September 19, 2019. Ten globally renowned firms in the maritime industry have already partnered with CSL for setting up their units in the Maritime Park in the first phase. CSL expects to position Kochi as a major ship repair hub with major operations in the present ship repair dock, coupled with increased capacities that would be available when the ISRF is commissioned.
New Dry-dock Project
The new dock will augment the Company’s shipbuilding and ship repair capacity essentially required to tap the market potential of building specialized and technologically advanced vessels such as LNG Carriers, Aircraft Carriers of higher capacity, jack up rigs, drill ships, large dredgers and repairing of offshore platforms and larger vessels. The New Dry-dock facility is expected to be commissioned in FY 2022-23
Ramayan Cruise
Ramayan Cruise Tour’ on the Saryu river in Ayodhya will be launched soon. Shri Mansukh Mandaviya, Minister of Ports, Shipping and Waterways chaired a review meeting for the implementation of cruise service. It will be the first-ever luxury Cruise service on the Saryu river (Ghagra/National Waterways-40) in Ayodhya, Uttar Pradesh. It aims to give mesmerizing experience to devotees with one-of-its-kind spiritual journeys while cruising through the famous ghats of the holy river Saryu.
VTS and Vessels Traffic Monitoring Systems (VTMS)
Development of Indigenous Software solution for Vessel traffic services (VTS) and Vessels Traffic Monitoring Systems (VTMS) launched. VTS and VTMS is a software which determines vessel positions, position of other traffic or meteorological hazard warnings and extensive management of traffic within a port or waterway. Vessel Traffic Services (VTS) contribute to safety of life at sea, safety and efficiency of navigation and protection of the marine environment, adjacent shore areas, work sites and offshore installations from possible adverse effects of maritime traffic.
National Authority for Ships Recycling:
Directorate General of Shipping notified as National Authority for Ships Recycling.
DG, Shipping designated as an apex authority under the Recycling of Ships Act, 2019 for the ship recycling industry of India. Office of National Authority will be set up in Gandhinagar, Gujarat.
Direct cargo ferry service between India and Maldives started. During its maiden voyage, a vessel with a capacity of 200 TEU and 3000 MT of break bulk cargo sailed from Tuticorin to Kochi, from where proceeded to Kulhudhuffushi port in North Maldives and then to Male port. This ferry service, being operated by the Shipping Corporation of India and will provide a cost effective, direct and alternate means of transportation of goods between India and Maldives.