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HomeMoney & LoansCabinet pulls up infra ministries to expedite port connectivity projects

Cabinet pulls up infra ministries to expedite port connectivity projects

After repeated delays in execution of road and rail connectivity projects with non-major ports, the Union cabinet has pulled up the Ministry of Railways (MoR) and Ministry of Road Transport and Highways (MoRTH), and asked them to ensure timely completion of these projects on priority, Business Standard has learnt.

Non-major ports are the ones which are not owned by the central government.

At a meeting of PM Gati-Shakti Empowered Group of Secretaries (EGoS) on June 22, Cabinet Secretary Rajiv Gauba also asked the ministries to finalise a comprehensive action plan in coordination with the Department for Promotion of Industry and Internal Trade (DPIIT) and integrate it into the PM Gati-Shakti framework by August 15, officials close to the development said.

Close to 52 road and 28 rail connectivity projects for ports remain incomplete as of today, with more being added to the pipeline of the Ministry of Ports, Shipping Waterways through its flagship scheme, Sagarmala. The respective secretaries informed the panel that many of these projects are either in a feasibility assessment or detailed project report (DPR) stage.

“These projects have been stuck for a long time. With the recent directions for expedition, there is hope that the execution of these projects will fall in line with the other efforts to augment the growth of the port sector. There is little benefit in enhancing capacity at ports if cargo evacuation still lags,” a senior government official said.

Continued slow implementation of these projects could have a negative impact on the government’s bid to have a smooth logistics network as ports account for nearly 95 per cent of India’s export-import (EXIM) cargo.

Recently, Shipping Minister Sarbananda Sonowal exhorted all ports to work on capacity building to compete with private ports, while asking them to build an action plan to become mega ports, with a minimum capacity of 300 million metric tonnes (mmt). However, currently, 40 operational non-major ports in the country have no railway connectivity while 30 have no connectivity to four-lane roads or national highways, official data shows.

According to an official correspondence, several reminders to expedite these projects have been sent to MoRTH and MoR since 2020. While 59 road projects worth Rs 22,721 crore were approved under the Bharatmala project earlier, 35 of these projects are still in DPR stage. Similarly, 28 rail connectivity projects, and 12 critical rail infrastructure projects, are yet to be completed.

Sagarmala has been the government’s call to the global shipping industry to invest in India’s maritime economy, with PRime minister Narendra Modi inviting several nordic countries to invest in the sector at the India-Nordic summit in May. Among other issues, lack of multi-modal and last-mile connectivity to ports has been a cause of concern, as it results in delayed evacuation of cargo, and consequently, a delay in the supply chain and increased cost of logistics.

The Sagarmala pipeline is currently worth Rs 6.5 trillion with over 1500 projects.

The prime minister, on multiple occasions, emphasised on the need to bring down the current cost of logistics, which is nearly 14 per cent of the GDP, much higher than developed and leading developing economies, according to government estimates. The Gati-Shakti portal was born out of the need to reduce these costs and make Indian exports competitive.

With the shipping sector having grown slower than its transportation counterparts, seamless multi-modal connectivity with all sea and inland waterways ports has been one of Centre’s priorities in its ambitious pursuit of bringing down the cost of logistics under 10 per cent of the GDP.

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