The process of awarding new projects by the Shipping Ministry has picked up pace with many being finalised in the last two-three months.
Overall, 23 projects out of the targeted 30 projects for 2013-14 involving a total capacity addition of 116 million tonne (mt), were awarded up to mid-February, according to credit rating agency ICRA.
The Ministry had recently said around ₹21,000 crore has been invested in 30 projects during the current year, achieving the target set by the Prime Minister’s Office for the port sector. The capacity addition is around 217 mt. The capacity of major ports has increased to 800 mt from 575 mt in 2009.
Shipping Minister GK Vasan had also said, during the last four years, 88 new projects were approved with an investment of ₹42,953 crore, leading to an additional capacity of 558 million tonne a year .
Iron-ore woes Pressure on cargo traffic is expected to continue at major ports with iron ore and containers the main laggards going forward, ICRA said. During the nine months of the current financial year, iron ore movement registered a 18 per cent decline on a year-on-year basis due to continued stalemate in domestic mining activity.
Container volumes declined by 4 per cent year-on-year owing to the delayed effect of the slowdown in the global markets and domestic economy, according to ICRA.
While the near term outlook for revival in these cargo categories remains weak, with economic slowdown and macro economic head winds, resumption of some iron ore mining activity in Karnataka (based on the Supreme Court’s likely future rulings) could alter the outlook to some extent. However, given the recent imposition of a 5 per cent export duty on pellets and the prevailing deficit in the domestic market and the continuing mining restrictions in Goa and Odisha, the revival of iron ore based exports is unlikely in the near term, ICRA said.
On the tariff setting framework, ICRA said new guidelines to set up tariffs in major ports are applicable only to the new projects bid out since the notification.
The existing private operators and major Port Trusts continue to be governed by the tariff guidelines of 2005 and 2008, which are seen to have certain inherent flaws.