Coastal shipping: Govt reworks port financial support scheme

New Delhi: Government has formulated a revised central sector scheme to offer financial support to ports for creation of infrastructure aimed at facilitating movement of cargo or passengers by sea or National Waterways.

This is in line with the ministry's port-led-development programme, Sagarmala, for creating better infrastructure and promoting coastal shipping for saving logistics costs, the Shipping Ministry said in a statement.

Financial assistance under the revised scheme will be given up to 50 per cent of the total cost of the project subject to certain conditions while the balance will be borne by ports or respective states, it said.

Under the scheme, projects for construction or upgradation of exclusive coastal berths for coastal cargo and berths or jetties for passenger ferries, mechanisation of berths, capital dredging, construction of breakwaters and platforms or jetties will be considered for assistance, the ministry said. 

The conditions include a maximum assistance of Rs 25 crore for construction or upgradation of exclusive coastal  berths, Rs 10 crore for construction of platforms or jetties, Rs 15 crore for mechanisation of coastal berth, and Rs 50 crore each in the case of capital dredging. 

"The main objective of the revised scheme is to promote coastal shipping and increase its share in domestic cargo movement, which is currently only as low as 7 per cent, compared to other developed countries in Europe and Asia," it said.

Better infrastructure for coastal shipping in terms of handling facilities will decongest rail and road network as well as ensure cost competitive and effective multi-modal transportation solution, it added.

The statement said the country has high potential to use coastal shipping for its internal cargo movement, given its 7,500-km long coastline.

The National Perspective Plan of Sagarmala envisions the potential to save around Rs 21,000-27,000 crore through coastal shipping of 230-280 million tonne per annum of key commodities like coal, cement, fertilisers, iron and steel, food grains and petrol, oil and lubricants (POL) by 2025. 

Under the scheme, the creation of exclusive berths for coastal shipping and its mechanisation will reduce waiting time for coastal vessels resulting in reduced cost. The capital dredging and construction of breakwaters are expected to help in smoother navigation of large vessels into the ports and facilitate development of existing and greenfield ports.

The financial assistance (grant-in-aid) given under the scheme will be subject to audit by CAG of India.