7/18/2015

Sagarmala:ConceptandimplementationtowardsBlueRevolution

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PressInformationBureau
GovernmentofIndia
Cabinet
25March201520:19IST

Sagarmala:ConceptandimplementationtowardsBlueRevolution
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its inprinciple approval for the
conceptandinstitutionalframeworkofSagarmalaProject.
The prime objective of the Sagarmala project is to promote portled direct and indirect development and to provide
infrastructuretotransportgoodstoandfromportsquickly,efficientlyandcosteffectively.Therefore,theSagarmalaProject
shall,interalia,aimtodevelopaccesstonewdevelopmentregionswithintermodalsolutionsandpromotionoftheoptimum
modalsplit,enhancedconnectivitywithmaineconomiccentresandbeyondthroughexpansionofrail,inlandwater,coastal
androadservices.
The Sagarmala initiative will address challengesbyfocusing on three pillars of development, namely (i) Supporting and
enablingPortledDevelopmentthroughappropriatepolicyandinstitutionalinterventionsandprovidingforaninstitutional
framework for ensuring interagency and ministries/departments/states collaboration for integrated development, (ii) Port
InfrastructureEnhancement,includingmodernizationandsettingupofnewports,and(iii)EfficientEvacuationtoandfrom
hinterland.
TheSagarmalaProjectthereforeintendstoachievethebroadobjectivesofenhancingthecapacityofmajorandnonmajor
ports and modernizing them to make them efficient, thereby enabling them to become drivers of portled economic
development, optimizing the use of existing and future transport assets and developing new lines/linkages for transport
(includingroads,rail,inlandwaterwaysandcoastalroutes),settingupoflogisticshubs,andestablishmentofindustriesand
manufacturingcentrestobeservedbyportsinEXIManddomestictrade.Inadditiontostrengtheningportandevacuation
infrastructure, it also aims at simplifying procedures used at ports for cargo movement and promotes usage of electronic
channelsforinformationexchangeleadingtoquick,efficient,hasslefreeandseamlesscargomovement.
For a comprehensive and integrated planning for Sagarmala, a National Perspective Plan (NPP) for the entire coastline
shallbepreparedwithinsixmonthswhichwillidentifypotentialgeographicalregionstobecalledCoastalEconomicZones
(CEZs).WhilepreparingtheNPP,synergyandintegrationwithplannedIndustrialCorridors,DedicatedFreightCorridors,
NationalHighwayDevelopmentProgramme,IndustrialClustersandSEZswouldbeensured.DetailedMasterPlanswillbe
preparedforidentifiedCoastalEconomicZonesleadingtoidentificationofprojectsandpreparationoftheirdetailedproject
reports.
InordertohaveeffectivemechanismatthestatelevelforcoordinatingandfacilitatingSagarmalarelatedprojects,theState
GovernmentswillbesuggestedtosetupStateSagarmalaCommitteetobeheadedbyChiefMinister/MinisterinChargeof
PortswithmembersfromrelevantDepartmentsandagencies.ThestatelevelCommitteewillalsotakeupmattersonpriority
as decided in the NSAC. At the state level, the State Maritime Boards/State Port Departments shall service the State
Sagarmala Committee and also be, inter alia, responsible for coordination and implementation of individual projects,
including through SPVs (as may be necessary) and oversight. The development of each Coastal economic zone shall be
done through individual projects and supporting activities that will be undertaken by the State Government, Central line
MinistriesandSPVstobeformedbytheStateGovernmentsatthestatelevelorbySDCandports,asmaybenecessary.
Sagarmala Coordination and Steering Committee (SCSC) shall be constituted under the chairmanship of the Cabinet
SecretarywithSecretariesoftheMinistriesofShipping,RoadTransportandHighways,Tourism,Defence,HomeAffairs,
Environment,Forest&ClimateChange,DepartmentsofRevenue,Expenditure,IndustrialPolicyandPromotion,Chairman,
RailwayBoardandCEO,NITIAayogasmembers.ThisCommitteewillprovidecoordinationbetweenvariousministries,
stategovernmentsandagenciesconnectedwithimplementationandreviewtheprogressofimplementationoftheNational
PerspectivePlan,DetailedMasterPlansandprojects.Itwill,interalia,considerissuesrelatingtofundingofprojectsand
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their implementation. This Committee will also examine financing options available for the funding of projects, the
possibilityofpublicprivatepartnershipinprojectfinancing/construction/operation.
Improvementofoperationalefficiencyofexistingports,whichisanobjectiveoftheSagarmalainitiative,shallbedoneby
undertakingbusinessprocessreengineeringtosimplifyprocessesandproceduresinadditiontomodernizingandupgrading
theexistinginfrastructureandimprovedmechanisation.Increaseduseofinformationtechnologyandautomationtoensure
paperless and seamless transactions will be an important area for intervention. Under the Sagarmala Project, the use of
coastalshippingandIWTareproposedtobeenhancedthroughamixofinfrastructureenhancementandpolicyinitiatives.
The Sagarmala initiative would also strive to ensure sustainable development of the population living in the Coastal
EconomicZone(CEZ).ThiswouldbedonebysynergisingandcoordinatingwithStateGovernmentsandlineMinistriesof
Central Government through their existing schemes and programmes such as those related to community and rural
development,tribaldevelopmentandemploymentgeneration,fisheries,skilldevelopment,tourismpromotionetc.Inorder
to provide funding for such projects and activities that may be covered by departmental schemes a separate fund by the
nameCommunityDevelopmentFundwouldbecreated.
TheInstitutionalFrameworkforimplementingSagarmalahastoprovideforacoordinatingrolefortheCentralGovernment.
Itshouldprovideaplatformforcentral,stategovernmentsandlocalauthoritiestoworkintandemandcoordinationunder
theestablishedprinciplesofcooperativefederalism,inordertoachievetheobjectivesoftheSagarmalaProjectandensure
portleddevelopment.
ANationalSagarmalaApexCommittee(NSAC)isenvisagedforoverallpolicyguidanceandhighlevelcoordination,andto
reviewvariousaspectsofplanningandimplementationoftheplanandprojects.TheNSACshallbechairedbytheMinister
inchargeofShipping,withCabinetMinistersfromstakeholderMinistriesandChiefMinisters/Ministersinchargeofportsof
maritime states as members. This committee, while providing policy direction and guidance for the initiatives
implementation, shall approve the overall National Perspective Plan (NPP) and review the progress of implementation of
theseplans.
AttheCentrallevel,SagarmalaDevelopmentCompany(SDC)willbesetupundertheCompaniesAct,1956toassistthe
Statelevel/zonelevelSpecialPurposeVehicles(SPVs),aswellasSPVstobesetupbytheports,withequitysupportfor
implementationofprojectstobeundertakenbythem.TheSDCshallalsogettheDetailedMasterPlansforindividualzones
preparedwithinatwoyearperiod.ThebusinessplanoftheSDCshallbefinalisedwithinaperiodofsixmonths.TheSDC
will provide a funding window and/or implement only those residual projects that cannot be funded by any other
means/mode.
Inordertokickstarttheimplementationofprojectsitisproposedtotakeupidentifiedprojectscoveredintheconceptof
Sagarmalaforimplementationforthwith.Theseidentifiedprojectsforimplementationintheinitialphasewillbebasedon
the available data and feasibility study reports and the preparedness, willingness and interest shown by the State
GovernmentsandCentralMinistriestotakeupprojects.
AlleffortswouldbemadetoimplementthoseprojectsthroughtheprivatesectorandthroughPublicPrivateParticipation
(PPP) wherever feasible. Funds requirement for starting the implementation of projects in the initial phase of Sagarmala
ProjectisprojectedatRs.692croresfortheFY201516.Furtherrequirementoffundswillbefinalizedaftercompletionof
DetailedMasterPlanforCoastalEconomicZonesforfutureyears.Thesefundswillbeusedforimplementationofprojects
bylineministriesinaccordancewithapprovalsbytheSCSC.
Background:
Presently,Indianportshandlemorethan90percentofIndiastotalEXIMtradevolume.However,thecurrentproportionof
merchandizetradeinGrossDomesticProduct(GDP)ofIndiaisonly42percent,whereasforsomedevelopedcountriesand
regionsintheworldsuchasGermanyandEuropeanUnion,itis75percentand70percentrespectively.Therefore,thereisa
great scope to increase the share of merchandising trade in Indias GDP. With the Union Governments Make in India
initiative,theshareofmerchandisetradeinIndiasGDPisexpectedtoincreaseandapproachlevelsachievedindeveloped
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countries.Indialagsfarbehindinportsandlogisticsinfrastructure.Againstashareof9percentofrailwaysand6percentof
roadsintheGDPtheshareofportsisonly1percent.InadditionhighlogisticscostsmakeIndianexportsuncompetitive.
ThereforeSagarmalaprojecthasbeenenvisionedtoprovideportsandtheshippingtherightfulplaceintheIndianeconomy
andtoenableportleddevelopment.
AmongstIndianStates,Gujarathasbeenapioneerinadoptingthestrategyofportleddevelopment,withsignificantresults.
Whileinthe1980sthestategrewatonly5.08percentperyear(Nationalaveragewas5.47percent),thisacceleratedto8.15
percent per annum in the 1990s (All India average 6.98 percent) and subsequently to more than 10 percent per annum,
substantiallybenefittingfromtheportleddevelopmentmodel.
ThegrowthofIndiasmaritimesectorisconstrainedduetomanydevelopmental,proceduralandpolicyrelatedchallenges
namely,involvementofmultipleagenciesindevelopmentofinfrastructuretopromoteindustrialization,trade,tourismand
transportation presence of a dual institutional structure that has led to development of major and nonmajor ports as
separate,unconnectedentitieslackofrequisiteinfrastructureforevacuationfrommajorandnonmajorportsleadingtosub
optimal transport modal mix limited hinterland linkages that increases the cost of transportation and cargo movement
limiteddevelopmentofcentresformanufacturingandurbanandeconomicactivitiesinthehinterlandlowpenetrationof
coastal and inland shipping in India, limited mechanization and procedural bottlenecks and lack of scale, deep draft and
otherfacilitiesatvariousportsinIndia.
An illustrative list of the kind of development projects that could be undertaken in Sagarmala initiative are (i) Portled
industrialization (ii) Port based urbanization (iii) Port based and coastal tourism and recreational activities (iv) Shortsea
shipping coastal shipping and Inland Waterways Transportation (v) Ship building, ship repair and ship recycling (vi)
Logisticsparks,warehousing,maritimezones/services(vii)Integrationwithhinterlandhubs(viii)Offshorestorage,drilling
platforms (ix) Specialization of ports in certain economic activities such as energy, containers, chemicals, coal, agro
products,etc.(x)OffshoreRenewableEnergyProjectswithbaseportsforinstallations(xi)Modernizingtheexistingports
and development of new ports. This strategy incorporates both aspects of portled development viz. portled direct
developmentandportledindirectdevelopment.
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