India is gearing up to introduce stringent standard operating protocols (SOPs) to govern the approval process for new ports, aimed at ensuring a regulated expansion of the maritime sector. According to a senior government official, these measures are designed to prioritize the full utilization of existing ports before sanctioning new ones, safeguarding investments made in port infrastructure.
“The investments made in setting up ports should be safeguarded. These SOPs will ensure structured growth of Indian ports,” the official stated.
Highlighting the importance of strategic planning, the official compared ports to other large logistical infrastructure projects, stressing the need for long-term market exclusivity to recover investments. They cautioned against the adverse impact of new ports or terminals in close proximity to existing ones, which could disrupt profitability and render older assets unviable.
India currently boasts 226 registered ports, with only 78 operational. Notably, 40 of these ports primarily handle passenger traffic and are concentrated in the Andaman & Nicobar and Lakshadweep islands. However, more than 100 ports, predominantly designated by states, remain undeveloped or exhibit minimal progress, posing a risk to investments in nearby ports.
The proposed SOPs mandate that any new ports align with existing master plans of central or state governments, including new terminals within existing ports. Additionally, new projects must demonstrate adequate port connectivity infrastructure, such as road, rail, or pipelines, aimed at mitigating risks associated with future infrastructure expansion.
Empowering the Union Ports, Shipping, and Waterways Ministry, the SOPs will authorize the ministry to determine which ports can handle various cargo types, including export-import, petroleum, and hazardous materials. While the Centre previously held influence in the approval process, particularly for permits issued by the Central Board of Indirect Taxes and Customs (CBIC), the new rules aim to streamline decision-making and enhance regulatory oversight.
According to a second official, the SOPs will be particularly stringent for ports facilitating export-import and petroleum cargo movements. However, ports focused on passenger and domestic cargo operations will continue to receive expedited approvals, aligning with the government’s strategy to promote coastal shipping.
The introduction of these SOPs marks a significant step towards ensuring sustainable growth and efficiency in India’s maritime sector, balancing the need for expansion with prudent regulatory oversight.
Logistics Insider Magazine: February issue 2024 (Digital issue)