Not a single port project awarded this year by shipping ministry

The shipping ministry has failed to award a single port project out of a planned 24 this year, with a  total outlay of Rs17,000 crore.

This comes even as the government on Thursday earmarked Rs22,000 crore to set up nine ports in the next five years.

Mandarins blame the delay on inter-ministerial approvals.

But truth be told, the slack is on for sometime now. Half the projects to be bidded out are carryovers from the past, valued at around Rs13,000 crore.

These include a 2009-10 plan to create a mega container terminal at Chennai port costing Rs3,686 crore and a mechanised berth at Vishakhapatnam for Rs218 crore.

While the former awaits environmental nod, the latter needs security clearances.

Pending from the last fiscal, on the other hand, is the fourth container terminal at Jawaharlal Nehru Port Trust (JNPT) worth Rs6,700 crore, which got entangled in litigations.

The development of a standalone container handling facility with a quay length of 330 metres at JNPT has also met the same fate.
Last fiscal, of a targeted 21 projects, the ministry could award only eight worth around Rs3,330 crore.

Ganesh Radhakrishnan, advisor, PricewaterhouseCoopers, said barring the proposed projects, new capacity additions at major ports would be difficult as projects will turn more complex in nature and could face serious dredging and land acquisition issues.

Akshay Soni and Pratima Swaminathan, analysts with Morgan Stanley, while writing a note on Mundra Port on Tuesday, said work on only 26% of the total port projects proposed under the National Maritime Development Programme (NMDP) is under progress.

According to them, while 10% of the projects have been dropped, 32% remain at a preliminary stage and 18% under approval process; 5% have been approved, but not awarded. A minuscule 9% have been completed.

The NMDP had envisaged creating an additional capacity of 431 million tonnes at the major ports at a cost of Rs62,700 crore by the end of this fiscal.

The ministry, however, is confident many projects will be awarded in quick succession.

“The legal issues over the JNPT terminal has been sorted out and it will be awarded soon, as will the Chennai and Vizag projects. We have received the pending approvals in the case of both the projects,” said Rakesh Srivastava, joint secretary (ports), ministry of shipping.

The maritime perspective plan 2020 unveiled by the ministry in January this year, envisages creating 3,200 million metric tonne capacity over the next ten years, equally divided between private ports and government trusts.

That would mean adding nearly 200 million tonne capacity every year.

Hemant Bhattbhatt, senior director, Deloitte, the consultant, said such slack at the central level would mean states governments can benefit through port projects planned under their maritime boards.

“Gujarat could benefit further as it has been very robust in developing new ports,”  Bhattbhatt said.

“If India continues to lag on port infrastructure, bigger ships will increasingly get diverted to foreign ports which will make import-export costlier and inefficient. To boot, we are seeing evidences of congestion at existing ports,” said Radhakrishnan.