India Ports Trade: Need to open up dredging market to boost ports trade, says NITI Aayog

India needs to open up its dredging market to boost trade by its major ports which at present cannot handle very large vessels in absence of proper draft depth, government think tank Niti Aayog has said. 

More competition mainly from global players in dredging activities would help increase and maintain draft depth at ports and attract large vessels, enabling them to become hub ports, the Aayog mentioned. At present, the Dredging Corporation of India (DCI) and a limited set of private vendors serve the Indian dredging market, limiting competition. 

"The government needs to open up the dredging market to attract more players, particularly international players, in dredging activities to increase and maintain draft depth at ports to attract large vessels and enable them to become hub ports," Niti Aayog has said. 

Foreign players will be attracted to the market if the government takes measures such as consolidating dredging contracts across cohorts of ports and withdrawing, at least temporarily, the right to first refusal given to Indian vendors, it said. 

To enable major ports to handle large vessels, the government has already made an action plan to increase the draft depth of ports. Most major ports have already achieved a draft depth of 14 metres or more except Kolkata Port, where deeper draft has not been feasible because of the riverine nature of the port. 

Some major ports are striving to achieve deeper drafts up to 18 metres. The outer harbour in Visakhapatnam has very deep draft of more than 18 metres. Work is in progress to create a draft of more than 18 metres in Mormugao and Kamarajar Port. 

The Union Cabinet last month approved strategic sale of government stake in Dredging Corporation of India to consortium of four ports namely Vishakhapatnam Port Trust, Paradeep Port Trust, Jawaharlal Nehru Port Trust and Kandla Port Trust. 

The government currently holds 73.44 per cent in Dredging Corporation of India Ltd (DCIL). The approval is aimed at facilitating the linkage of dredging activities with the ports, keeping in view the role of the DCIL in expansion of dredging activity in the country as well as potential diversification of ports into third party dredging. 

India has 12 major ports -- Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) which handle approximately 61 per cent of the country's total cargo traffic.