India is preparing strict standard operating protocols (SOPs) for approving new ports and ensuring a regulated growth of the maritime sector, a senior government official said. Full capacity utilisation at existing ports will be prioritised before approving new ones.
“The investments made in setting up ports should be safeguarded. These SOPs will ensure structured growth of Indian ports,” the official said.
Ports, like highways and other large logistic infrastructure projects, rely on long term market exclusivity to recoup the investments made in such large projects.
A new port or terminal in the vicinity of an existing one may further delay profitability or even make an older asset unviable.
India presently has 226 registered ports of which only 78 are operational. Among those functional, 40 are handling only passenger traffic and are mostly in the Andaman & Nicobar (A&N) and Lakshadweep islands.
“There are over 100 ports, largely notified by states, which have not been developed for several years or are making negligible progress. These pose an unnecessary risk to investment in nearby ports,” the official cited above said.
The new SOPs mandate any new ports to be part of existing master plans of Centre or state governments. Even new terminals in existing ports should be part of master plans.
New projects also need to have evidence of port connectivity infrastructure such as road, rail, or pipelines for cargo to be in place. This is aimed at reducing the risk of a new asset for future infrastructure creation.
The proposed SOPs will further empower the Union Ports, Shipping, and Waterways Ministry to decide which port can handle export-import (EXIM), Petroleum, Oil, and Lubricants (POL), Liquefied Petroleum Gas (LPG), Liquefied Natural Gas (LNG), hazardous, and explosive cargo.
While the Centre had a say in the pre-SOP regime as well, these permits – after the approval from the Central Board of Indirect Taxes and Customs (CBIC) – were largely issued at the discretion of state governments.
“There rules will be more strictly applicable on ports seeking to facilitate EXIM and petroleum cargo movement,” a second official said, adding that passenger and domestic cargo focused ports will continue to get speedier approvals since the Centre wants to encourage coastal shipping.
