For the Ministry of Shipping the year 2017 has been a year of consolidation, a year of building up on the good work of the past few years and strengthening the ground for further ongoing development.
1.1 Ports play an important role in the trade of the country. In fact, they are the gateways for EXIM Trade. Overall the ports in India handle 90% by volume and 70% by value of India’s external trade.
Capacity and Traffic
1.2 In order to meet the ever-increasing trade requirements of the country, the focus has been on the infrastructure development and capacity enhancement of the Ports. Over the years the cargo handling capacity of the major ports has been growing steadily as under:
1.3 Traffic handled at the major ports has also been increasing as shown in the Table below:
(upto November, 2017)
Award of projects and investment
1.4 During 2016-17, 57 Projects were awarded, involving an investment of Rs. 9490.51 crore and additional capacity of 103.52 MTPA was created. In 2017-18, 59 projects have been targeted for award of which 12 have already been awarded. With a view to promote Port led development, the Sagarmala Programme was approved by the Cabinet on 25-03-2015. This is a flagship initiative of Government of India. Under this programme 142 Port Projects involving an investment of around Rs. 91,434 crore for capacity enhancement have been identified for implementation during the next 10-15 years.
Improvement in efficiency parameters
1.5 While increasing the capacity of major ports, Ministry of Shipping has been striving to improve their operational efficiencies through policy and procedural changes and mechanization. As a result key efficiency parameters have improved considerably. The Average Turnaround Time has improved from 87.36 Hrs in 2015-16 to 82.56 Hrs in 2016-17 and significant improvement to 63.33 Hrs during the 2017-18 (as on 31.10.2017). The Average Output Per Ship Berthday has increased from 13156 Tonnes in 2015-16 to 14583Tonnes in 2016-17 and to 14912 Tonnes in 2017-18(as on 31.10.2017). A study to benchmark the performance of Major Ports to comparable international ports was taken up with a view to improve the operational efficiency and profitability. Out of the 116 initiatives recommended by the consultants, 86 have already been implemented and the remaining will be implemented by 2019. The implementation of these recommendations is expected to lead to further improvement in the operational efficiency and productivity of the Major Ports in the coming years.
Policy initiatives to improve efficiency
1.6 The achievement of the Major Ports in terms of capacity augmentation, improved operational efficiency and higher operating surplus has been made possible due to certain pro-active policy initiatives taken by the Ministry of Shipping. A new Berthing Policy and Stevedoring Policy have been implemented. The tariff guidelines were revised to provide flexibility to port operators to align the tariff closer to market tariff subject to achievement of certain performance standards. 100% FDI is being allowed in PPP Projects in the Port Sector. The Model Concession Agreement is being amended with a view to obviate the problems being faced in execution of PPP Projects on account of certain provisions of the present MCA, in order to make the investments in the Port Sector more attractive. A new Major Ports Authorities Bill, 2016 to replace the existing Major Port Trusts Act, 1963 with a view to provide greater autonomy and modernization of institutional structure has been introduced in the Lok Sabha on 16.12.2016. The Bill has been examined by the Parliamentary Standing Committee and based on the recommendations made in the Committee’s Report, necessary Official amendments in the proposed Bill have been formulated. Inter –Ministerial consultations are being held before seeking approval of the Union Cabinet for introduction of the Official amendments in the proposed Bill.
1.7 In recognition of the invaluable contribution and sacrifices made by Pandit Deendayal Upadhaya towards serving the nation and also upliftment of the Poor & downtrodden, the name of Kandla Port has been changed to Deendayal Port. The Notification in this regard has been issued on 24/09/2017.
Ease of Doing Business
1.8 As part of promoting Ease of Doing Business to promote and facilitate business at ports, a number of activities which include elimination of manual forms, direct port delivery, installation of container scanners at ports, RFID based automation system etc have been undertaken. RFID system has already been put in place in 9 Major Ports and the system is expected to be in place in the remaining ports by March, 2018. Direct Port Delivery (DPD) volume is steadily growing. Further as part of the Swachh Bharat Abhiyan, Green agenda, new schemes have been formulated for providing financial assistance to Major Ports for green initiatives and also for building their capacity for combating oil pollution. The ports are being rated on cleanliness. Major Ports are taking up renewable energy projects to generate more than 150 MW (solar & wind energy) in the next five years. 15 MW Solar and 6 MW Wind Powers has already been commissioned in the Major Ports during 2016-17 and by the end of 2018, 91.5 MW Solar and 45 MW Wind Powers is expected to be achieved. Focus is being given on setting up of Special Economic Zones (SEZs) and Coastal Economic Zones around major ports. SEZ at JNPT Smart Industrial Port Cities at Kandla and Paradip are under implementation.
1.9 100% cashless transaction have been achieved in all Major Ports, land records have been digitized, all ports pensioners linked with Aadhaar Biometric system etc.
Chahbahar Port in Iran
1.10 India is also engaged in the development of Chahbahar Port in Iran. An MoU has been signed between the two countries in this regard. Inauguration ceremony of the Phase-I of Shahid Beheshti Port at Chabahar, Iran was held on 3rd December,2017 by the Hon’ble President of Iran. At the ceremony the Indian delegation was led by Shri Pon. Radhakrishan, Hon’ble Minister of State for Finance & Shipping.
2.1 Jal Marg Vikas Project (JMVP)
‘Jal Marg Vikas’ (National Waterway-I: River Ganga) Project envisages to develop a fairway with upto 3 meters depth between Varanasi and Haldia covering a distance of 1380 kms at an estimated cost of Rs. 5369 crore. On completion, the project would enable commercial navigation of 1500-2000 ton vessels. The project is being implemented by the IWAI with technical and investment support of World Bank and is to be completed by 2022-23. The major activities under the project are construction of multi-modal terminals, jetties, river information system, channel marking, navigational lock, river training and conservancy works.
The project has been appraised by the Public Investment Board (PIB). The World Bank loan for the JMVP has been approved. The CCEA note on Implementation of JMVP has been approved by the Hon`ble Finance Minister subject to obtaining reconfirmation from Ministry of Environment and Forests and Climate Change that Environmental Clearance is not required for maintenance dredging in rivers for navigation .
In the meantime, work has commenced on priority sub-projects i.e., construction of multi-modal terminals at Varanasi, Haldia, Sahibganj and navigational lock at Farakka. The status of these subprojects is given below:
2.2 Multi-modal Terminal , Varanasi
Work order for construction of Phase-I(A), mainly offshore works, awarded on 13.05.2016 at a cost of Rs. 196 crore. Foundation stone was laid by the Hon’ble Minister of Shipping, Road Transport and Highways on 12.08.2016. Contractor has commenced work and it is scheduled to be completed by May 2018.
2.3 Multimodal Terminal , Sahibganj
Work for construction of Phase-I of the Terminal at a cost of Rs. 280.90 crore has been awarded on 27.10.2016. Foundation stone was laid by Hon’ble Prime Minister on 06.04.2017 and the project is scheduled to be completed in June, 2019.
2.4 Multimodal Terminal , Haldia
61 acres of land in the Haldia Dock Complex has been taken on 30 year lease from Kolkata Port Trust. Work for construction of the Terminal at a cost of Rs. 517 crore has been awarded on 27.12.2016 and is scheduled to be completed in Dec, 2019.
2.5 Construction of New Navigational Lock , Farakka
The work has been awarded on 15.11.2016 at a cost of Rs. 359.19 crore and is scheduled to be completed in April 2019.
2.6 Development of National Waterway-4
The Hon’ble Vice-President of India in the presence of Hon’ble Minster of Shipping and Chief Minister, Andhra Pradesh laid the foundation stone for commencement of development work for Phase-I of National Waterway-4 from Muktiyala to Vijaywada on 3rd October, 2017. The project would facilitate movement of construction material for Amravati, the upcoming capital city of Andhra Pradesh. The work for dredging and setting up of floating terminals has commenced.
2.7 Movement of Cargo on NWs
The IWAI is focussing its energy on movement of cargo on the National Waterways so that by the time the terminals and other infrastructure are established they are utilized effectively. A pilot run of defence cargo (eight Army trucks and 20 personnel) transportation on IWAI’s Ro-Ro vessel, MV Gopinath Bordoloi (capacity 250 DWT from Pandu (Guwahati) to Bogibil (Dibrugarh) on National Waterway-2 (river Brahmaputra) in Assam was conducted successfully during 24th to 29th April, 2017. The pilot movement was part of IWAI’s sustained efforts to promote IWT on National Waterways in the North East.
IWAI’s cargo vessel MV V.V. Giri moved 240 metric tonnes of bagged cement of a prominent manufacturer from Lolaghat, West Bengal (Rupnarayan river) to Bhagalpur (on Ganga).
Transportation of 50,610 ton of cement from Gaighat (Patna) to Bhagalpur and 73,400 ton km stone chips from Sahibganj (Jharkhand) to Manihari (Bihar) on NW-1 was completed during April, 2017 by a bare boat charter agency.
2.8 Development of eight (08) new NWs
Mandovi, Zuari, Camberjua, Barak, Gandak, Rupnarayan, Alappuzha-Kottayam-Athirampuzha Canal and Sunderbans National Waterways were considered for development during 2017-18. The three NWs of Goa would be developed after signing of the MoU between IWAI, Mormugao Port Trust and Captain of the Ports, Govt. of Goa. The bandelling and channel marking in Gandak river has been issued and work will start shortly. Development of fairway in Barak river has been awarded and the contractor is mobilizing the equipment at site. The tendering for fairway and pantoon at Hemnagar of Sunderbans waterways is under finalization. The dredging and floating terminals at Rupnarayan river is also under finalization.
2.9 Raising of bonds by IWAI
On the basis of Finance Minister`s Budget Announcement 2016-17, IWAI was permitted to raise Rs. 1000 crore as bonds through Extra Budgetary Resources. IWAI raised Rs. 340 crore during the financial year 2016-17 and the balance amount of Rs. 660 crore has been raised in Oct, 2017. The EBRs raised are being utilized by IWAI exclusively for capital expenditure for development of National Waterways (NWs) during 2017-18.
2.10 Institutional funding for development and maintenance of National Waterways (NWs)- Allocation of 2.5 per cent of Central Road Fund
The Union Cabinet has accorded its approval to a proposal jointly moved by the Ministry of Shipping and the Ministry of Road Transport & Highways (MoRTH) for amendment of Central Road Fund Act, 2000 to allocate 2.5 per cent of the proceeds of Central Road Fund (CRF) for development and maintenance of National Waterways (NWs) and a commensurate reduction in the share provided for development of National Highways. To implement the decision, the Central Road Fund (Amendment) Bill, 2017 has been introduced in Lok Sabha on 24.07.2017.
The decision of the Cabinet is a major boost for development of IWT sector which was not able to take off in the past due to low public funding. An allocation of 2.5 per cent of CRF proceeds would provide approximately Rs. 2000 crore per annum for the development and maintenance of NWs at existing rates of duties funding the CRF. The Inland Waterways Authority of India (IWAI) has estimated that approximately Rs. 25,000 crore would be required for development of identified projects on NWs till 2022-23.
2.11 Freight Village and Logistics Hub at Varanasi
To improve logistics efficiency, it is proposed to set up a Freight Village and Logistics Hub in Varanasi in continuation of the multi-modal terminal under construction as part of the Jal Marg Vikas Project. The estimated cost of the Freight Village is Rs.3055 crore. To set up the Freight Village, the Screening Committee of the Department of Economic Affairs appraised a proposal seeking technical and financial assistance of US$240 million (Rs. 260 crore) and the World Bank has agreed to the proposal . IWAI has been advised to set up a Project Management Unit for this purpose.
2.12 International movement of cargo on NW-16 (River Barak)
International movement of cargo has commenced on NW-16 (River Barak). The first consignment of 200 MT Limestone was transported by Bangladeshi vessel M.V. Mia Mou from Karimganj (Assam) to Ashuganj (Bangladesh) through National Waterway – 16 on 22nd September, 2017.
2.13 MoU between India and Bangladesh on Passenger and Cruise Services on Coastal and Protocol Route
An MoU on Passenger and Cruise Services was signed by the two countries on 08.04.2017 during the visit of Hon`ble PM of Bangladesh. The draft SOP for commencement of Passenger and Cruise Services has been discussed with and is under finalisation in consultation with MEA.
2.14 MoU between India and Bangladesh on Fairway development of Ashuganj-Zakigunj and Sirajgunj-Daikhawa stretch of Indo Bangladesh Protocol Route
An MoU on Fairway Development of Ashuganj-Zakiganj and Sirajganj-Daikhawa stretches of Indo-Bangladesh Protocol Route was signed on 08.04.2017. The fairway is to be developed by IWAI and Bangladesh Inland Water Transport Authority (BIWTA). The tender documents for fairway development of both the stretches are under finalization. Ministry of External Affairs has agreed to bear the dredging cost of fairways development of the above stretches which would be Rs. 244.0 crore over a period of seven years.
2.15 Agreement between India and Bangladesh for use of Chittagong and Mongla Port for movement of goods to and from India
An MoU was signed by the two countries on 6th June, 2015. To administer the MoU, India forwarded a draft SOP for consideration of Bangladesh. However, Bangladesh desired that an Agreement is required for operationalization of the MoU. Therefore, it was decided that the Agreement as well as SOP will be finalized simultaneously during the Secretary (S) level talk at Dhaka on 07.12.2016.
Accordingly, the draft Agreement and SOP were forwarded to Govt. of Bangladesh. However, Bangladesh opined that the SOP will be finalised after signing of Agreement. The draft Agreement has been referred to Bangladesh for finalisation.
a. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017
The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 was enacted on 9th August, 2017. The Act consolidates the existing laws relating to admiralty jurisdiction of courts, admiralty proceedings on maritime claims, arrest of vessels and related issues and repeals five obsolete British statues on admiralty jurisdiction in civil matters. The Act confers admiralty jurisdiction on High Courts located in coastal states of India and this jurisdiction extends upto territorial waters. This Act will fulfill a long-standing demand of the maritime legal fraternity.
Now, High Courts of all the coastal states will exercise admiralty jurisdiction over maritime claims which include several aspects not limited to goods imported and chattel as earlier, but also other claims such as payment of wages of seamen, loss of life, salvages, mortgage, loss or damage, services and repairs, insurance, ownership and lien, threat of damage to environment etc. The legislation accords highest priority to payment of wages of the seafarers. It also provides for protection against wrongful and unjustified arrest and has provision for transfer of cases from one High Court to another High Court.
b. The Merchant Shipping Bill, 2016
MS Bill was referred to Parliamentary Standing Committee in December, 2016. The Committee has given its recommendations on 18th July, 2017. The recommendations of the Committee have been examined. Cabinet Note on proposal for acceptance/non-acceptance of the recommendations of the Department Related Parliamentary Standing Committee on Transport, Tourism & Culture and introduction of Official amendments to Merchant Shipping Bill, 2016 was circulated for interministerial consultations on 10.10.2017 and is expected to be approved by Ministry of Law. Thereafter it will be submitted to the Cabinet and then Lok Sabha would be requested to take up the Bill for consideration and passing along with official amendments.
3.2 Indian Maritime Sector
Shipping industry is one of the most globalised industries operating in a highly competitive business environment. This industry is far more liberalized than most of the other industries and is, thus, intricately linked to the world economy and trade. Indian shipping tonnage, which was only 1.92 lakhs Gross Tonnage (GT) on the eve of Independence, now stands at 122.32 lakhs GT with 1359 ships as on 31.10.2017.
3.3 Shipbuilding Financial Assistance Policy
The Government of India has an ongoing Rs. 4000 Crore Shipbuilding Financial Assistance Policy for 10 years (2016-2026) to encourage domestic shipbuilding. Under this policy, financial assistance will be granted to Indian Shipyards equal to 20% of lower of “Contract Price” or the “Fair Price” of each vessel built by them.
3.4 Upgradation of Environment Management Plan at Alang-Sosiya ship recycling yards
A loan agreement has been signed on 15.09.2017 between JICA and Ministry of Finance for grant of soft loan of US$ 76 million for upgradation of the environment management plan at Alang-Sosiya ship recycling yards.
3.5 Shipping Corporation of India
A second hand VLGC size Gas Tanker was delivered to Shipping Corporation of India on 14th September, 2017 at Khorfakkan, UAE. With this, SCI has become a 6 million DWT company.
3.6 Cochin Shipyard Limited
‘Make in India’ by Cochin Shipyard Limited (CSL) : Under the Make in India initiative, Cochin Shipyard Ltd. is constructing four passenger-cum–cargo vessels as per order placed by the Andaman & Nicobar Administration. Two vessels will have a capacity of 500 persons and 150 tonne cargo and the other two will have a capacity of 1200 persons and 1000 tonne cargo.
3.6.1 International Ship Repair Facility
Hon’ble Minister of Shipping laid the foundation stone for International Ship Repair Facility at Cochin Port Trust, Kochi on 17.11.2017. This facility is being developed by Cochin Shipyard Limited at a cost of Rs. 970 crores. It will have a ship lift and transfer system, six work stations and allied facilities and is expected to generate employment for 1500 persons.
3.6.2 Dry Dock
Cochin Shipyard Ltd is also setting up a Dry Dock, to augment its shipbuilding/ ship repair capacity, at a project cost of Rs. 1799 crores. The contract for the project, which is expected to generate employment for 1500 persons, will be awarded shortly and is scheduled to be completed in 30 months thereafter.
3.6.3 Issue of IPO
In order to raise funds for the above two expansion projects, Cochin Shipyard Ltd went in for an IPO by way of issue of 3,39,84,000 shares of Rs. 10 each amounting to Rs 33.984 crores . The issue opened on 01 August 2017 and closed on 03 August 2017. The issue was oversubscribed by 76.18 times.
A Heritage Maritime Museum showcasing migration from Vintage technology to modern state of art Aids to Navigation, Musical Fountain, Children Park and viewing gallery has been established to promote tourism at lighthouses.
Solarization of all 193 lighthouses completed, generating approx. 6.0 MWh energy per day thus reducing approx. 6.0 ton of greenhouse gases per day.
c. Establishment of new lighthouse at Vembar
A new lighthouse at Vembar has been established at Vembar for safety of mariners plying near the region. This lighthouse was inaugurated a dedicated to the nation by Shri Pon Radhakrishnan, Hon’ble Minister of State on 19.11.2017.
3.8 Indian Maritime University
i. IMU has introduced 3 new courses BBA (Logistics, Retailing and E-Commerce), M.Sc. (Commercial Shipping Logistics) and M.Tech (Marine Engineering & Management) from the Academic Year 2017 – 18. IMU has signed a MoU with Southampton Solent University.
ii. IMU headquarters is built at 300 acres of land at a cost of Rs. 130.80 crore at Chennai. Its work have been completed and ready for occupation.
iii. IMU Mumbai Campus has been bifurcated into IMU Mumbai Port Campus and IMU Navi Mumbai Campus. A new Academic Annex Building for installing Simulators has been inaugurated in June 2017.
iv. IMU has launched Employees Grievance Portal in order to redress the grievances of the Employees of IMU. About 20 new Ordinances framed / old Ordinances modified and published in the Gazette. Agreement to set up a Center of Excellence (CoE) at IMU, Visakhapatnam Campus with SPV comprising IRS, Siemens & Ministry is on hand.
3.9 International Cooperation
3.9.1 International Maritime Organization
India got re- elected as a member of the International Maritime Organization (IMO) Council under Category ‘B’ by getting second highest number of votes during the IMO Council election held at IMO on December 1, 2017.
3.9.2 Agreements/ MoUs signed
3.9.3 JWG/ JMC Meetings
3.10 Director General (Shipping)
3.10.1 Review of the process of distribution of examination fee to examiners/surveyors
A Committee was constituted under the chairmanship of Additional Secretary (Shipping) to review the process of distribution of remuneration out of examination fee to examiners/surveyors and other related issues. The Committee had made 15 recommendations of administrative nature. DG Shipping has been directed on 22.03.2017 to implement 10 recommendations of administrative nature. The five recommendations having financial implications have been referred to Department of Expenditure for concurrence.
3.10.2 Merchant Shipping (Continuous Discharge Certificate) Rules, 2017.
New Merchant Shipping (Continuous Discharge Certificate ) Rules, 2017 have been notified vide notification No. GSR 883€ dated 14th July, 2017. The main objective of the new CDC Rules is to facilitate the issuance of CDCs and hence smoothen the entry of a budding seafarers into maritime profession. The restrictive conditions in the previous CDC Rules for getting an Indian CDC were hindrance for entering into the profession. This was against the mantra of ‘ease of doing business’ and were also contrary to the stated objective of the Government of India for increasing the share of Indian seafarers in global shipping industry.
4.1 Conference on Cruise Tourism
The Ministry of Shipping and Ministry of Tourism had jointly engaged a consortium of M/s Bermello & Ajamil & Partners to prepare a report on the “Action Plan for Development of Cruise Tourism in India”. The consultant has given recommendations on regulatory issues for customer friendly and hassle free logistical processes. To reach out to the Cruise Lines and tour operators and various stakeholders, a conference on Cruise Tourism was held on 8th August, 2017 in Mumbai which was inaugurated by Shri Nitin Gadkari, Hon’ble Minister of Shipping. Three documents were released in the workshop, (i) India’s sea cruise Road map, (ii) Cruise terminal in India and (iii) SOP of the Mumbai Port Trust.
A National Workshop on Action Plan for Development of Cruise Tourism in India was organised jointly by the Ministry of Shipping and Ministry of Tourism in New Delhi on 27.6.2017. Shri Nitin Gadkari Hon`ble Minister of Shipping, Road Transport and Highways and Dr Mahesh Sharma, the then Hon`ble Minister of State for Tourism addressed the workshop in which representatives of all stakeholder organizations – both from the Government and the private sector – including regulatory agencies which deal with issues impacting cruise tourism participated. In India, cruise terminals are being developed at five major ports – Mumbai, Goa, Cochin, Mangalore and Chennai.
The stakeholders at the workshop discussed several regulatory issues pertaining to various aspects of cruise port operations, namely, security, immigration, customs, ports and worked towards drawing up Standard Operating Procedures for all Government organizations for cruise vessel handling. The Ministry of Shipping, in conjunction with the Ministry of Tourism, has revised the SoPs for hassle free entry and exit of cruise passengers at various major ports in the country. These are based on the recommendations of a global consultant engaged by the Ministry to draw up an Action Plan to develop an enabling ecosystem necessary to promote and sustain cruise shipping in India.
4.3 Initiatives taken in cruise shipping
4.4 Coastal Shipping
On the request of Ministry of Shipping, Department of Fertilizer has included the primary movement of subsidized urea and P&K fertilizers by rail and/or coastal shipping or inland water transportation including road bridging on 29th March, 2017. Now movement of subsidized fertilizers by coastal route and road also qualifies for reimbursement of freight subsidy which will encourage the coastal movement of fertilizer.Previous Next
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