The Sagarmala Project
Introduction to Sagarmala Project
The infamous Sagarmala Programme was established on the 31st of July in 2015 and released on the 14th of April 2016, about 7 years ago from now, and it plans on changing and exploiting the massive Indian coastline for the greater good of the nation of India. The “massive coastline” includes roughly 7,500 km of coast and an estimate of 14,500 km of navigable inland waterways and modernizing multiple zones/ areas along. Why is all this necessary and how much will it cost? Firstly, Sagarmala Project will greatly enhance, increase performance, and speed up the logistics sector of the country. Coming to the cost, the programme will charge (approximately) a whopping Rs. 8.5 trillion to construct new mega ports and develop existing ones, and development of 14 Coastal Economic Zones (CEZs).
Why does India need Port based developments?
As the whole world is starting to know India as one of the fastest growing economies, with an average GDP rise of around 6% from 2016 to 2019, ports already played a vital role in this rise from previous years. A new and better system will immensely help for further and continuous growth.
Factors to consider to extract the potential of the waterways
Although many ports in India are upgrading themselves to provide sustainable economic growth in coming years, like JNPT in New Mumbai, Mundra port near the Gulf of Kutch, Sikka port in Jamnagar, India still has plenty of room for improvements to implement in the infrastructural and operational sectors.
Firstly, the operational efficiency in Indian ports is relatively low. This means that the Turnaround Time (TAT) (time between arrival and departure of the ship) is averaged at 2.59 days. Although it significantly improved from about 4 days, the current TAT is not good for the average global benchmark which varies from 1-2 days. A couple of private sector ports from the Adani group have been able to achieve a respectable 2 days TAT, but a low average in every port will certainly help the nation.
Moreover, the “idle time” of cargo during transit is a major issue. This can be eliminated by implementing last-mile connectivity measures to ports and ensuring smooth movement of cargo to/ from hinterlands. Waterborne transport is much safer, cleaner, and cheaper, and a significant chunk of money can be saved by shading transport of industrial commodities, coal, iron ore, steel, etc. to inland and coastal waterways. Currently, 90% of coal is transported via railways. Due to connectivity constraints and the use of multi-modal transport, higher logistics costs are bound to be implied and in turn, it reduces the competitiveness of our industries.
Lastly, the distance between the port and the industry/ manufacturing site affects the overall cost and also creates uncertainty with time management. The presence of industrial zones near a coastal region, or bringing inland waterways near an industrial zone will lower transportation costs per tonne-km and in turn, reduce exportation costs.
The Four Pillars
The Sagarmala Project revolves around the concept of “port-led development” and has its eye on improvising the logistics-intensive industries. Logistics-intensive industries are those where transportation and exportation costs, and time and major and critical factors for success.
The Four Pillars are supposed to set everything (in terms of logistics) in smooth sailing and create synergy and coordination in between multimodal transport.
If the above pillars and taken into account and constructed, the majority of industries will be supported by efficient ports and seamless multi-modal connectivity, boosting economic performance and values.
A Numbers Game
Sagarmala Project consumes an estimated amount of Rs 8.5 trillion. What do the numbers say about that? Let’s start with how transportation costs will get affected by this project.
A study conducted by Maersk in 2019 found the following: –
| Mode of transport | Cost (Rs./ton-km) |
| Inland waterways | 1.19 |
| Rail | 1.41 |
| Road | 2.28 |
Although the prices will fluctuate within a small margin, the general trend clearly shows that shipping is more economical, and has the potential to save chunks of money, and over time create huge profits for the industry. Port-led developments will not only decrease constraints in connectivity but also increase the competitiveness of our industries. According to the Ministry of Ports, Shipping and Waterways, Sagarmala has a vision of reducing the overall logistics cost (domestic and EXIM (export-import)) and creating, directly and indirectly, savings of Rs. 35,000 cr. to Rs. 40,000 cr.
The project also aims for the following by the year 2025: –
- Spend approximately Rs. 4 lakh cr. on port modernization, connectivity, and infrastructure investments.
- Up to Rs. 18,000 cr. savings in coastal shipping of coal.
- Up to Rs. 13,500 cr. savings in coastal shipping of cement, food grains, and fertilizers.
- Cut exportation time by 5 days and create savings of up to Rs. 9,000 cr.
- Double the share of inland and coastal waterways.
- Boost the country’s exports by USD 110 bn.
- Create an estimate of 40 lakh new jobs and 60 lakh indirect jobs.
The Project Itself
We talked about the basic principle and the finances behind Sagarmala, now we’ll look into the geography and which ports/ places are to be modernized. As earlier mentioned about new mega ports and Coastal Economic Zones in this article, we will discuss them in a more detailed fashion and appreciate this initiative from the Indian government.
To start with, there are 574 total projects under Sagarmala out of which 121 are already completed when surveyed on 30th September 2019. Find below a table published by the Ministry of Ports, Shipping, and Waterways which gives comprehensive data about the status of various projects under Sagarmala.
According to another data table, 493 out of 574 projects fall under competed/ implemented/ under construction.
The development of ports all around the country come under Project Unnati. This aims to improve port efficiency and productivity of India’s 12 major ports and an estimate of 200 non-major ports. After the modernization, the cargo traffic at these ports, which currently is at 1,500 MTPA (megatonnes per annum), will climb to 2,500 MTPA. A roadmap has been devised by the operational body which eyes increasing the cargo traffic to 3,300 MTPA by 2025. India’s 12 major ports under the central government are namely Deendayal, Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Chennai, Kamarajar, V.O. Chidambaranar, Visakhapatnam, Paradip, and Kolkata.
Construction of 6 new mega ports is also planned under Sagarmala.
| Location | Status |
| Sagar Island (West Bengal) | DPR under preparation |
| Paradip Outer Harbour (Odisha) | DPR under preparation |
| Sirkhazi (Tamil Nadu) | Techno-Economic Feasibility Report (TEFR) prepared |
| Kanniyakumari (Tamil Nadu) | Major Transhipment Port at Kanniyakumari. SPV formed for the purpose – March 2019 |
| Belikeri (Karnataka) | Techno-Economic Feasibility Report (TEFR) prepared |
| Vadhavan (Maharashtra) | DPR under preparation |
There are total 14 planned CEZs which are to be developed along the coast.
- Kachch, Gujrat
- Saurashtra, Gujrat
- Suryapur, Gujrat
- North Konkan, Maharashtra
- South Konkan, Maharashtra
- Dakshin Kanara, Karnatka
- Malabar, Kerala
- Mannar, Tamil Nadu
- Poompuhar, Tamil Nadu
- VCIC South, Tamil Nadu
- VCIC Central, Andhra Pradesh
- VCIC North, Andhra Pradesh
- Kalinga, Odisha
- Gaud, West Bengal
Some benefits of CEZs also includes an export boost, huge vacancies for jobs by 2025, reduced cargo logistics time and also cost, a GDP growth and global competitiveness.
Connectivity
Connectivity is a critical factor that enables efficient transportation, with reduced handling time and cost. With the implementation of a proper connectivity system and with upcoming technological advancements, the industry can squeeze out additional benefits. These include an increased cargo handling capacity and total capacity of the port as the movement of cargo in and out will be seamless and unrestricted. As many cargo-generating industries are situated in hinterlands in India, smooth connectivity means time can be cut down which was lost in the long lead distances covered by road/ rail.
As published by the Government of India (GOI), 235+ projects w.r.t. connectivity are identified at an approx.. estimation of 2.35 lakh cr. The types listed by GOI are: –
- National waterways prioritized for development in the first phase
- Connectivity to Dedicated freight corridors
- Last-mile rail and road connectivity projects
- Major rail connectivity projects
- Freight friendly Expressway projects connecting the major ports
- Development of Multi-Modal Logistics Parks
- POL (Petroleum, Oil, and Lubricants) Pipelines
The Blue Revolution
Along with industrial and economical benefits as seen in the numbers above, Sagarmala Project will also add value to the fisheries and tourism. Central Ministries and State Governments would invest in the betterment of infrastructure and social development of the fishing industry and aquaculture. The ministry is also funding fishing harbour projects and the development of deep-sea fishing equipment/ vessels in coordination with the Department of Animal husbandry and Dairying (DADF).
The Ministry is also promoting tourism in maritime sectors to boost revenues, create thousands of jobs, and implant a sense of culture to visitors and the wandering world.
Conclusion
Sagarmala is a top-of-the-segment project which will not only set benchmarks in sectors of worldwide and domestic shipping, but also in industrialization and construction projects. It will step up India’s logistics game by unlocking and harnessing the true potential of the Indian coastline and humungous inland waterways reaching too far out places in almost every corner of India. Sagarmala is one more step towards a new India.