Mumbai: India needs a single coordinating agency or committee to plan connectivity between roads, rail, ports and air if it wants to upgrade its transport infrastructure rapidly and boost exports, industry and maritime experts say.
The government’s Rs1 trillion ($25 billion) National Maritime Development Programme (NMDP) is a step in the right direction, but industry executives say quicker progress on building connectivity is needed.
A committee on infrastructure already exists, headed by Prime Minister Manmohan Singh and including eight ministers.
But industry officials say either a separate ministry or a high-powered agency is needed to coordinate and drive integration of cargo transport and connect ports to India’s interior.
“The central body should have sweeping powers,” said A. Balasubramanian, Principal of Advisory Services at Infrastructure Development Finance Co Ltd.
“You need to have something like an empowered group, who have the authority to take decisions cutting across multiple modes of transport,” Balasubramanian, who also chaired a Planning Commission working group on port privatisation, said.
“We should have a national transport policy, which is cargo-centric and nor rail, shipping or port-led. It is not constrained by the mandate of a particular sector.”
Major Indian ports handled 464 million tonnes of cargo in 2006/07 (April/March), according to Citigroup.
In some ports it takes ships four times longer to unload and reload than in other Asian ports. Port officials say poor road and rail links raise transport costs to 8-9 % of total shipping costs, compared with 3-4% in developed countries.
Last year, the Bombay Chamber of Commerce suggested creating a ministry for handling cargo movement. It said while committees aided planning, ministries had the power of implementation.
Viking Shipping Managing Director Ishwar Achanta said India needed an agency or empowered committee of ministers to drive connectivity if ports were going to handle a projected 1 billion tonnes of cargo by 2011.
“Unless these people actually sit together and decide that any one sector cannot facilitate growth in India ... I don’t see them reaching this export target,” Achanta said.
The government had a target of $160 billion in exports this fiscal year, up from $127 billion in 2006/07, but has said the strength of the rupee meant the target would not be reached.
S.S. Rangnekar, managing director of Sical Logistics Ltd, said an overseeing body needed to review and update the myriad of laws covering infrastructure and transport.
“We need to look at lots of our laws and we need to amend the laws wherever necessary to align them to the extent possible with the contemporary international rules and regulations,” said Rangnekar, who is also the Group CEO.
Balasubramanian said logistics costs affected export competitiveness. Viking’s Achanta, who is also a trustee of the Visakhapatnam Port Trust, India’s biggest port, said some costs could be cut by small measures like rationalising tariffs.
“We need an agency to point out to the government that there is nothing to be lost and everything to be gained from addressing little issues which can immediately lead to a cost reduction to cargo handling,” Achanta said.
Capital accumulated by major ports could be used collectively to upgrade equipment infrastructure to reduce handling costs.
“Tackling micro issues is the order of the day and we don’t need divine intervention for that,” Achanta said.