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Construction : Ports | March 2018 | Source : Infrastructure Today

Sagarmala can save upto Rs.40,000 cr per year on logistics spends

Prakash Tulsiani, Executive Director & COO, Allcargo Logistics Ltd, says that 'the smooth rollout, implementation and execution (with minimal or no business interruption) will be the deciding factor for the success of GST.'

How is the government giving a thrust to the shipping & logistics sector?
The Union Budget of 2017-18 has laid a 25 per cent increase in allocations for infrastructure over last year. There has also been a renewed focus on transportation, development of port infrastructure and its automation. Such moves would lead to reduction in delays, improve cost-effectiveness and operational efficiencies. The heightened pace of road construction would lead to connectivity to major production and consumption centers, thereby aiding business. The dedicated rail freight corridor and implementation of GST will improve customer experience.

Initiatives like the Sagarmala project are set to play a significant role in reaping the benefits of coastal and inland shipping. For the project to realise its full potential, there is a need for development of industries in and around ports which will ensure there is cargo movement both ways. The 'Make in India' initiative and other infrastructure-led developments like dedicated freight corridors are a positive reinforcement in this direction.

How can Sagarmala reduce the logistics cost in the country?
A study released by the Ministry of Shipping estimates that the Sagarmala project can save up to Rs 40,000 crore per year on logistics spends by key industries. The project aims to leverage the country's coastline and inland waterways to drive industrial development, thereby reducing the load factor of goods transported through roads. For example, at present, thermal power plants in the country use the rail and road networks for their coal linkages. If these are transported to plants via waterways, it will drastically reduce logistics costs, along with subsequent reduction in the power tariff costs. 

Analyse Indian Railways' efforts for seamless connectivity of shipments
The government has had a renewed focus on the issue of connectivity through railways. With 21 port-rail connectivity projects under the Sagarmala programme, the rail ministry will invest close to Rs 20,000 crore to develop and improve the railways for better connectivity of shipments. This in turn would be complemented by the Bharatmala project which aims to improve port connectivity in the country by improving the connectivity of national highways to coastal and border areas.
One of the major hindrances to move cargo by rail is the high cost, as compared to road and coastal movement. Hence, the popularity of movement through roads. The initiatives taken by the government are testimony to the fact that seamless connectivity through railways is on the cards.

Has the government done enough to address the road safety situation?
The government is steadily taking strict legal reforms to enforce road safety and rule out corruption. The new Motor Vehicles (Amendment) Bill 2016, once passed into law, will curb drunk driving, overloading and other safety violations. The law
would also de-motivate truckers taking on wheels after hours of continuous driving, besides increasing awareness amongst the corporates to hire and train them with improved standards of living. 

The new bill also promises a rollback of the permit raj in the road sector. Online vehicle registration, Aadhaar-based licensing and a national vehicle registry are prominent (moves) to reduce the discretionary powers of the state and curb rampant corruption.

How can lack of adequate draught and absence of port-side connectivity be overcome?
Deep draught ports are the need of the day, especially with increased vessel sizes and  Indian trade volumes. JNPT - has in the last 18 months increased draught and embarked to further increase the draught.

Port-side connectivity is also being addressed with rail and road connectivity projects. Steps are being taken to ensure better inland transportation.

Although it might take some time to realise its full potential, the work has already been initiated.

- Rahul Kamat
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