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Why Gujarat needs a maritime cluster?
The GMB-planned maritime cluster aims to cater not only to port and other maritime activities in Gujarat but become a hub for the entire country
Ahmedabad: Gujarat Maritime Board, the regulator of private-sector ports and marine activities in the state, plans to set up a maritime cluster by 2017 on the lines of the ones that exist in London, Rotterdam, Hong Kong and New York.
These clusters house maritime-related service providers such as ship owners, shipping agents, ship chandlers, and shipping finance and insurance firms and maritime education institutes.
The maritime cluster that GMB plans to set up near Ahmedabad aims to cater not only to port and other maritime activities in Gujarat but become a hub for the entire country.
“It would be a one-stop solution for the maritime industry,” said a senior GMB official on conditions of anonymity. “Whatever limited services India offers, are scattered around different locations. Hence a cluster approach is needed.”
Despite the fact that ports in Gujarat handle far more cargo than any other state in the country, it doesn’t have a distinct town or city with a strong maritime identity. Gujarat, and especially Ahmedabad, has seen a substantial influx of shipping and marine-related projects.
“Several shipping lines, consulting and accounting firms and maritime consultants have their offices in Gujarat. However several companies from Gujarat go to Dubai for charter services,” said the official.
So-called non-major ports of Gujarat—ports that are not controlled by the Central government—handled a total cargo of 387 million tonnes per annum in 2013-14, making up more than 30% of the freight handled by all Indian ports.
“India in general and Gujarat in particular has a thriving maritime industry, though it is completely disjoint and operates in isolated packets,” said a port official working with GMB. “This unfortunately means that India as a maritime nation is a net importer of maritime services from other clusters and nations. Dubai and Singapore are the countries which get the advantage presently because commercial shipping in the country has not developed.”
While the Adani Group operates the country’s largest commercial port in Mundra, Reliance Industries Ltd handles more than 125 mtpa of captive cargo for its refinery in Jamnagar.
Gujarat is home to two liquefied natural gas terminals and private shipyards, including the one promoted by ABG Group in Magdalla and Pipavav Shipyard Ltd near Bhavnagar. Gujarat also houses one of the largest shipbreaking yards at Alang near Bhavnagar.
The Central government has recently taken the initiative to promote the defence sector by allowing 100% private-sector participation and this would lead to more work at the two existing shipyards.
GMB earlier this month completed a feasibility report for the cluster project, which is expected to come up in four phases. The government of Gujarat granted in-principle approval to the project earlier this year, and a high-level committee has been formed to execute it on a priority basis.
Gujarat Ports Infrastructure and Development Co. Ltd, a GMB unit, has been appointed as the nodal agency for the work.
The maritime cluster will come up either in government-allotted land or in the existing infrastructure at Gujarat International Finance Tec-city (GIFT City) near Gandhinagar.
The development of ports in Gujarat was fuelled by a pioneering policy framework put in place in the 1990s—the port policy in 1995 and the build, own, operate and transfer policy in 1997.
This helped in opening up Gujarat’s ports sector for privatization as well as development of various execution models for attracting investment. During this time, Pipavav was developed as the country’s first private port in India. This was followed by the first chemical terminal and first LNG terminal in Dahej.
“There has been talks of developing a maritime cluster for quite some years and it is now time to see some results on the ground. It is a great idea and a good starting point for Gujarat that has taken a lead in port-led development in the past few decades,” said Suren Vakil, managing director of BMT Consultants India, a maritime consulting firm.
According to a Lloyd Institute’s Global Marine Trends 2030 report, the marine landscape is set for a transformation by 2030 owing to the rise of emerging countries, new consumer classes and resource demand.
China, India and Brazil will be among the top five in terms of gross domestic product (GDP) rankings with the US, Japan and western European countries gradually losing their economic dominance over the next two decades.
Apart from the maritime activities and port projects in Gujarat, the Delhi Freight Corridor and Delhi Mumbai Industrial Corridor (DMIC) would also act as drivers for the maritime cluster.
DMIC, India’s largest infrastructure development project, will link the industrial townships and harbours in the six states between Delhi and Mumbai to promote exports and direct investment. About 39% of the 1,500km-long DMIC falls in Gujarat.
“As a result, it is expected that 70-80% of future northern state traffic would be using Gujarat ports in future,” said an industry expert who did not wish to be named.
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Business NewsIndustryWhy Gujarat needs a maritime cluster?
First Published:10 Aug 2015, 09:37 PM IST
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