Sagarmala Project

The new initiatives undertaken by the NDA government to improve efficiency of major ports include delegation of more powers to Major Ports, capital dredging to 18 meters through PPP mode in Mormugao Port, new scheme to assist ports to mitigate oil pollution, new scheme to set up coastal berths, passenger jetties etc, establishment of new company Indian Port Rail Corporation to focus on last mile connectivity, new company India Ports Global to take up projects abroad, Sagarmala project to promote port led development, equipments and technology upgradation, mechanization and initiatives for large vessel handling. With new initiatives the improvements have been registered in the performance of major ports with the volume of cargo handled increasing by 4.6% and revenue increasing by 8.7% in 2015.

Presently, Indian ports handle more than 90 percent of India’s total EXIM trade volume. However, the current proportion of merchandize trade in Gross Domestic Product (GDP) of India is only 42 percent, whereas for some developed countries and regions in the world such as Germany and European Union, it is 75 percent and 70 percent respectively. Therefore, there is a great scope to increase the share of merchandising trade in India’s GDP. Against a share of 9 percent of railways and 6 percent of roads in the GDP the share of ports is only 1 percent. In addition high logistics costs make Indian exports uncompetitive.

Therefore Sagarmala project has been envisioned to provide ports and the shipping the rightful place in the Indian economy and to enable port-led development. Against this background, the prime objective of the Sagarmala project, approved by the Union Cabinet on March 25, 2015, is to promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively.

Therefore, the Sagarmala Project shall, inter alia, aim to develop access to new development regions with intermodal solutions and promotion of the optimum modal split, enhanced connectivity with main economic centres and beyond through expansion of rail, inland water, coastal and road services. At the Central level, Sagarmala Development Company (SDC) will be set up to assist the State level/zone level Special Purpose Vehicles (SPVs), as well as SPVs to be set up by the ports, with equity support for implementation of projects to be undertaken by them.