More efficient management of maritime sector urged

India
More efficient management of maritime sector urged
By Indo Asian News Service, Nov 19, 2006 - 7:58:03 PM

New Delhi, Nov 19 (IANS) With a major hike in the number of ships calling on Indian ports, the government needs to renew focus on the maritime sector to attract more private participation and ensure efficient management, says a new industry study.

The Confederation of Indian Industry (CII) study done through global consultants KPMG has 'called for evolving a new mechanism for reviving India's maritime sector'.

'A renewed focus on India's maritime sector would both increase private sector investments and also enable more efficient management of the maritime sector,' states the study 'Indian Maritime Landscape' released here Sunday.

Shipping, shipbuilding and repairs, security, ports, hinterland connectivity and development of human resources are some of the critical areas identified by the study for revival of the maritime sector.

'Development and growth of port sector, in particular, is crucial as ports play a vital role in the overall economic development of the country,' states the report.

It says the total volume of the traffic handled by all Indian ports during 2005-06 was 568.93 million tonnes. Out of this 423.41 million tonnes or around 74 percent was handled by major ports - showing a growth rate of 10.30 percent over the previous year - and the remaining 145.52 million tonnes by the non-major ports.

Out of the total traffic handled at major ports, petroleum crude and products maintained the largest share of about 33 percent, followed by iron ore (20 percent), coal (14 percent), container (14 percent) and the rest shared by general cargo.

The report stresses the need for providing ship-repairing facilities.

'Not only does ship-repair activity help generate substantial local jobs, it also builds the capacity of the local industry. It is noteworthy that among the 326 yards in China, nearly 160 focus on ship repairs,' the report states.

Though Indian shipyards enjoy a price advantage over many of their counterparts abroad, the report feels the lack of the capability to build large and modern ships is a major drawback.

Cochin shipyard in Kerala is the only yard that has the capability to repair and develop large ships.

While the government has provided subsidy benefits to shipyards developing ocean-going vessels for exports, it needs to ensure that the benefits reach the private operators through development of effective procedures and policies that can help Indian players become competitive vis-à-vis international players, the CII has pointed out.

The report also stresses that multiple taxes, totalling up to 12 types including service tax and the fringe benefit taxes, make the Indian maritime sector very 'uncompetitive in comparison to international players'.

Given the rise of terrorism globally, the report calls for the implementation of global maritime security initiatives to ensure continued integration of the Indian ports with the world shipping and port trade.

The report stresses that hinterland connectivity remains a major bottleneck in the seamless movement and growth of multi-modal transportation in the country. This considerably adds to the transportation costs.

The report recommends that early completion of various projects in the rail and road sector is crucial to meet the heavy traffic projections for future.

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