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October 4, 2023


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Sonowal: Viability-gap funding for shipbuilding projects soon

4 min read

The government is strengthening the blue economy as part of a plan to lower logistics costs. How will you achieve this goal?

Immediately after coming to power, the government adopted some very important initiatives like Sagarmala and Maritime India Vision 2030. These are the two visionary programmes through which India will now grow faster because we would be able to develop and modernize our port facilities, provide port-led connectivity and undertake port-led industrialization, develop coastal community and shipping, and build on an extensive network of inland waterways.

Let us realize that in 2014, the cargo handling capacity of our ports was close to 800 million tonnes per annum. In just eight years, it has now gone up to 1.6 billion tonnes. The rate of growth reflects how modernization initiatives help. Also, earlier, for our container vessels, it took 44 hours of turnaround time at ports. Now it has come down to 26 hours. Mechanization, modernization and digitization are all being incorporated into port facilities. We are trying to bring the turnaround time now to 22-23 hours or less than a day. We are also planning to develop unmanned technologies so that operations systems become more competitive globally, to accommodate big vessels and also to take care of their turnaround time so that economically they can become very much viable.

How is Sagarmala, which aims to promote port-led development by using the coastline and waterways, progressing?

The target for the completion of projects under the Sagarmala programme is 2035. It aspires to reduce logistics costs for Exim and domestic cargo, leading to overall cost savings of 35,000 crore to 40,000 crore per annum. In addition, Sagarmala aspires to reduce carbon emissions from the transportation sector by 12.5 mt/annum. Under the programme, we have identified 802 projects altogether, and out of them, the majority of the projects have been completed, some are under implementation, and some are in different stages of development. We have also included holistic coastal district development under it. In this respect, 567 more projects have been included at an estimated investment of 56,000 crore at the last apex body meeting. This will take up overall investment under the programme beyond 5.5 trillion.

For a true blue economy, inland waterway systems are key. How is the government planning to develop our river channels?

Up to 2014, the cargo handling capacity on inland waterway systems in the country was only 16 mtpa, but now it has gone up to 109 mtpa. That’s the transformation we are witnessing because of the Jalmarg Vikas Project at Ganga and National Waterways 1 and National Waterways 2 on the Brahmaputra. Up to 2014, there were only four national waterways, but now it is to 23.

The lack of ships to sail through the waterway system is still a major problem.

Cochin Shipyard Ltd, which has built India’s all-time biggest warship, INS Vikrant, is the leader now in shipbuilding. It has the capacity to build the required ships. It will also manufacture electric catamarans, mainly for inland waterways. It will be pollution free and help meet net-zero emission targets.

How will you support ship manufacturing? Is a VGF scheme being looked at?

We are planning (a VGF scheme). To inspire our investors in this sector, we will have to go for these kinds of policy incentives. It will be done in a PPP mode because even in Sagarmala also, we are inviting private players. So far, in Sagarmala, more than 24,000 crore have come from private entrepreneurs. So our policy is not only to develop the port but also how we can develop shipbuilding in the country.

What are the other shipbuilding projects?

We have started the Hooghly unit of Cochin Shipyard. It is dedicated to inland cargo vessels, and every year 8-10 vessels will be manufactured. We have taken tech support from DST in Germany for low-draft vessels. It has an investment of 180 crore. We are also going to develop a ship-repairing facility in Pandu, Guwahati. In addition, we have done MoU with IHC Netherlands that will allow Cochin Shipyard to manufacture large 12,000 cu. m dredgers. It will be the first time such a large dredger has been made in India.

Trials on the India-Bangladesh Protocol Route were conducted, and that route will soon open for trade and passengers. Are more inter-country river routes being looked at?

We have developed the Sittwe Sea Port of Myanmar. It has now become navigable. Sittwe is connected to Mizoram (through river routes), and this development will benefit both Mizoram and Tripura as it opens the way for global trading.

The Prime Minister had announced the port-led development of Greater Nicobar with a 10,000 crore investment. What is the progress?

The survey is underway for it. It will be done in PPP mode. We mainly aim to make it a trans-shipment hub. It comes on the main sea route, and it will be near all the other key places, including Singapore, Sri Lanka and the Philippines. Whenever the feasibility report is submitted, we will immediately get into action.

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