Following is the full text of the speech of the Minister of Shipping, Shri G.K. Vasan delivered at the Seminar on Ports & Maritime Industry in Singapore today:
“I am extremely happy to be here today to attend this Seminar on the Ports and Maritime Industry and to interact with the industry captains who have contributed significantly in taking the maritime sector to its present heights. Let me begin by thanking you all for your interest in the Indian Ports and Maritime Sector. I commend the High Commission of India in Singapore and Confederation of Indian Industry for organising this wonderful meeting with key industry leaders and investors in Singapore.
Singapore like India is a multi-ethnic, multi-lingual and secular country and historically has had a very close relationship with India. I feel very much at home here as socially and culturally it is very akin to our country.
Today, India and Singapore enjoy close and robust relations, with economic cooperation as the major driving force. Bilateral trade has been growing rapidly and has reached US$ 14.05 billion in 2009-10. Singapore is also the second largest investor in India. India has attracted cumulative investments of over 11.13 billion US $ from April 2000 to June, 2010. 10 % of the FDI inflows in India are from Singapore. Almost 3000 Indian companies are based in Singapore. Total Indian investment in Singapore up to March 2009 added up to US$ 14.4 billion.
Coming back to Infrastructure and with specific reference to ports and maritime sector, India now seeks to place its business relations with Singapore on a much-elevated trajectory. And this strong delegation on Ports & Maritime Sector is a testimony to that.
I firmly believe that India and Singapore have tremendous scope for partnership in this sector including collaboration in the areas such as Port development, cruise shipping, bunkering and ship building, ship repair etc. The existing engagement though encouraging does not reflect the true potential.
India is an emerging and vibrant economy and had grown consistently at over 9% in the recent past. Even during the worst global recession, the economy had shown resilience and had growth rates above 6%. In 2010-11, it is expected to grow at 9.2%.
The port sector in India has had a brilliant run in the last decade witnessing significant additions in capacity across the Indian coastline and cargo types. This has been possible on the back of an excellent Public Private Partnership Programme executed by the Government of India in the Port Sector, attracting significant investments from Indian as well as overseas port operators and investors. Current trade growth trends suggest that the Indian Port Sector would continue to require significant addition to capacity to meet future cargo handling demands across cargo types.
To provide a fillip to port development in the country, the Government of India had prepared the National Maritime Development Programme for the major ports. Under the programme, Government has identified 276 port projects with an estimated investment of US$ 20.8 billion.
The objective of this programme is to upgrade and modernise the Port infrastructure in India which will enable it to benchmark its performance against global standards. In addition to this, the State Governments are also pursuing vigorously development of non-major ports and are aiming to attract huge investment in the sector.
Private partnership is the key feature of the port development program and we are expecting much of the investment to come in from private sector with a high proportion from overseas investors. Already, India’s port development program has attracted interest from many overseas investors, including PSA, APM, DP World etc.
To facilitate private sector participation, Government of India has also put in place a favourable and investor friendly policy framework. Some of the policy initiatives taken by the Ministry include:
· 100% foreign direct investment allowed in Shipping and Port sectors.
· The Model Concession Agreement for port projects has been simplified and this has expedited the decision making process.
· Bidding documents have also been standardised to ensure uniformity and transparency in the award of projects.
· Tariffs are being fixed upfront by the Tariff Authority of Major Ports.
· Acquisition of all types of ships has been brought under the Open General License.
As a result of these initiatives, private investment in the port sector has increased significantly over the years. I am proud to say that 24 PPP projects involving an investment of almost 65 billion Indian Rupees have been completed and another 19 PPP projects in major ports are under implementation, involving an investment of almost Rs. 125 billion. Currently 22 PPP projects are under bidding and scheduled to award in current financial year involving an investment of almost Rs.160 billion.
Similarly, India is also surging ahead in shipping and ship building sector.
India has one of the largest merchant shipping fleet and is ranked 16th among the maritime countries. Indian tonnage has steadily grown over the last five years. From 6.94 Million GT as on 1.4.2004 the Indian tonnage for the first time has crossed the 10 million GT mark last month.
There are tremendous opportunities in the Port and Maritime sector for investments given India’s robust economic growth and ever increasing demand for energy. Energy demand-supply gap and low per capita steel consumption will cause India to depend on the import of thermal and coking coal to meet its energy and steel needs. Many of the upcoming power plants are expected to be located in the coastal areas and will depend on imported coal from Indonesia, Australia and other countries.
Imports of coal and oil will be one of the key drivers of development in Port and Shipping sector. This will provide immense opportunities for construction of new terminals, captive jetties and for acquisition of Tankers, LNG and bulk carriers.
The Container volumes in India are witnessing almost 18% CAGR growth. However, containerization levels in India at present are low and therefore there is a huge potential in this sector. Mega Container Terminals have been planned in Vallarpadam, Chennai, JNPT and Ennore and implementation of these projects will provide many opportunities in the logistics business.
Another window of opportunity is the dredging sector. The requirement for dredging in India is huge whereas the current available capacity is limited.
Indian shipbuilding industry currently accounts for about 1 per cent of the global shipbuilding market and is targeting a world share of 5 per cent by 2017. Shipbuilding in India has a high growth potential owing to certain inherent strengths like low labour cost, strong domestic demand, a well established steel and manufacturing industry and availability of technically qualified manpower.
The new shipyards in India are having world class modular shipbuilding infrastructure and state of art engineering facilities with large dry docks. India recognizes that shipbuilding and ship repair have great potential to fuel economic growth and prosperity, particularly by creating employment opportunities for the people of India. With the support of the government, the shipbuilding industry in India has reached a stage where it can now grow at a rapid pace. Currently, the Indian shipbuilding industry is present in the medium and small vessel segments but the planned investments are targeting construction of larger and complex vessels. An investment of about 4 billion $ is envisaged in Indian shipyards in near future.
Singapore has an impressive and well-functioning port and maritime industry and we look to you for expertise as well as investments.
I am aware that several Singapore companies have invested in India’s ports, maritime & logistics sector and Singapore companies have also entered into joint ventures with Indian companies. As the Indian maritime sector is poised for a healthy growth complimenting the growth of the Indian economy, I urge you to participate closely in India’s Port and Shipping development programme as an active partner. I can assure you of all support from my government.”
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