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Sonowal: Financing for viability gap soon for shipbuilding projects

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

Immediately after taking power, the government passed some very important initiatives like Sagarmala and Maritime India Vision 2030. These are the two visionary programs through which India will now grow faster as we would be able to develop and modernize our port facilities, guided connectivity and port-led industrialization, coastal community development and shipping, and building on an extensive network of inland waterways.

Let us realize that the throughput capacity of our ports in 2014 was almost 800 million tonnes per year. In just eight years, it has now risen to 1.6 billion tons. The growth rate reflects how modernization initiatives are helping. It also used to take our container ships 44 hours lead time in ports. Now it has become 26 hours. Mechanization, modernization and digitization are all making their way into port facilities. We are now trying to reduce lead time to 22-23 hours or less than a day. We also plan to develop unmanned technologies so that operational systems become more competitive globally, to accommodate large vessels and also to regulate their turnaround time so that they can become very economically viable.

What about Sagarmala, which aims to promote port-driven development by using the coastline and waterways?

The target for completion of projects under the Sagarmala program is 2035. It aims to reduce logistics costs for Exim and domestic freight leading to total cost savings of 35,000 crore 40,000 crore per year. In addition, Sagarmala aims to reduce carbon emissions from the transportation sector by 12.5 million tons per year. Under the programme, we have identified a total of 802 projects, of which the majority of the projects have been completed, some are in progress and some are in various stages of development. We have also included holistic coastal development. In this context, a further 567 projects have been included at an estimated investment of 56,000 crore at the last summit body meeting. This will take the total investment under the program out there 5.5 trillion.

Inland navigation systems are essential for a true blue economy. How does the government want to develop our river channels?

Until 2014, the cargo handling capacity on the country’s inland waterways was only 16 tonnes per annum, but now it has risen to 109 tonnes per annum. That is the transformation we are witnessing because of the Jalmarg Vikas project at Ganga and National Waterways 1 and National Waterways 2 on the Brahmaputra. Until 2014 there were only four national waterways, now there are 23.

The lack of ships to navigate the waterway network is still a major problem.

Cochin Shipyard Ltd, which built India’s largest warship ever, INS Vikrant, is now the leader in the shipbuilding industry. It has the capacity to build the necessary ships. It will also build electric catamarans, mainly for inland navigation. It will be pollution-free and help meet net-zero emissions targets.

How will you support shipbuilding? Is a gft scheme being considered?

We are planning (an organic waste 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 we invite private players. Until now, in Sagarmala, more than 24,000 crore comes from private entrepreneurs. So our policy is not only to develop the port, but also how to develop shipbuilding in the country.

What are the other shipbuilding projects?

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

Trials were conducted on the India-Bangladesh Protocol route, and that route will soon open to commerce and passengers. Are more intercountry river routes being considered?

We developed Myanmar’s Sittwe seaport. It has now become navigable. Sittwe is connected to Mizoram (via river routes), and this development will benefit both Mizoram and Tripura as it opens the way for global trade.

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

The investigation is ongoing for that. It will be done in PPP mode. Above all, we want to turn it into a transhipment hub. It will be on the main sea route and it will be near all other important places including Singapore, Sri Lanka and the Philippines. As soon as the feasibility report is submitted, we get to work immediately.

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