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Cargo Handling Capacity at Major Ports Needs to Improve, Says Parliamentary Panel

The standing committee on transportation in its latest report has pointed out that lack of rail and road networks has emerged as a major constraint for the major ports.
Cargo Handling Capacity at Major Ports Needs to Improve, Says Parliamentary Panel

A parliamentary committee has found that despite adequate allocation of funds towards the development and modernisation of major ports, the cargo handling capacity has not shown proportionate improvements and there remains a big difference in cargo handling performance between the major Indian ports and port of Singapore.

The standing committee on transportation in its latest report has pointed out that lack of rail and road networks has emerged as a major constraint for the major ports.

The parliamentary panel has sought more information about the financial model for implementation of the rail-road connectivity projects including sources of their funding and the extent to which such models are viable in India.

The panel also noted with dismay that the Shipping Ministry has extended timelines for execution of almost three-fourth of the number of projects whereas the emphasis should have been on timely and speedy completion of connectivity projects to link minor ports to metropolitan cities and state capitals.

Taking note of the decline in traffic in five major ports, the committee headed by Bharatiya Janata Party MP TG Venkatesh observed that the ports which have showed negative growth were top performers in 2017-18 in terms of traffic growth. The performance does not match with huge funding from government for various port enhancement programmes and schemes designed for major ports, the report stated.

The five ports – Kamrajar, Chennai, New Mangalore, Mormugao and JNPT – registered negative growth as compared to the corresponding period last year.

The 31-member committee is of the opinion that introduction of major technological changes in Indian major ports can provide stimulus for cargo handling.

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The committee also found that in the ports of Kolkata, Paradip, Kamrajnagar, Chennai, Chidambaranar, New Mangalore and Deendayal, the average output per ship berthday is even less than that of 2018-19. As such the committee recommended that the Shipping Ministry should look into the reasons for the decrease in average output per ship berthday of those ports and take remedial measures.

It observed that connectivity projects are capital intensive and have substantial gestation period as they become economically viable over long periods of time.

Expressing deep concern over the budget allocation, the committee noted that an amount of Rs 150 crore was allocated in budget estimate 2019-20 for Sagarmala project. This was reduced to Rs 98.26 crore at the revised estimate 2019-20 because many projects approved under the scheme could not be funded due to statutory clearances.

This speaks volumes about the poor planning and fiscal discipline as the budgeted funds have been kept locked up for want of approvals, the panel noted.

The committee also sought to know whether the projects under implementation have witnessed any time overrun and cost escalation as compared to the original cost and timeline of the projects. It has asked the ministry to mention the precise reasons for delay, if any, port wise and the steps being taken to address such delays.

The committee observed that there is a huge gap between the projected demand and the sanctioned budget for the ministry of the 2020-21 fiscal. Against the projected demand of Rs 3,328.70 crore, the ministry has been provided with Rs 1,800 crore only. Obviously such huge variation is suggestive of the shortcomings in the budgetary planning, the committee observed.

The ministry was urged to exercise due diligence in the budget formulation with proper planning and assessment taking into account its needs and the capacity to deliver the functions assigned to it.

The committee expressed its displeasure at this significant variation between budget estimates and revised estimates which is indicative of serious shortcomings in the budgetary planning and monitoring of utilisation of the budgeted funds. The committee therefore recommended the ministry to take corrective measures to arrest such an erratic trend of projection of fund requirements and be more prudent in their budget formulation. It has advised that the ministry make their estimates only after proper assessment and planning.

Also read: Change in Shipping Policy Promises Large Benefits to Adani Group and Foreign Shipping Firms – Could Ring Death-Knell for JNPT

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