The government-appointed Tata Consultancy Services has identified nine minor ports with a potential to attract private investment.

It has, however, said the government must chip in Rs 185 crore (Rs 1.85 billion) for basic infrastructural development in these ports before they can be privatised.

In its draft report, TCS said the nine minor ports, located in Gopalpur, Cuddalore, Vizhinjam, Azzhikal, Malpe, Karwar, Ratnagiri, Dharamtar and Magdalla, should operate as corporate entities.

Once they achieved 50 per cent capacity utilisation, another set of ports could be identified to meet future traffic demand.

The shipping ministry had appointed TCS last year to study how coastal shipping and minor ports could be developed.

The consultancy firm has recommended that the minor ports should also be regulated by an independent body like the Tariff Authority for Major Ports.

The management, it has said, should be entrusted with the operational responsibility only. At present, the minor ports carry out all the functions, including the calculation of tariffs.

The TCS study states that the coastal shipping is grossly under-rated in India and transports only 7 per cent of the total domestic cargo, while in the European Union this share is as high as 43 per cent.

With the major ports focussing more on international trade, the coastal vessel operations would increasingly have to lean on minor ports for servicing their needs.

The report also states that coastal shipping scores over other means of transport in terms of fuel-efficiency and environmental friendliness.

Its potential should be exploited fully by utilising the minor ports for coastal operations and diversion of cargo from rail and road.

About four million tonnes of cargo volumes per year can be diverted to coastal shipping without incurring any additional costs, it has said.

If possible, an incentive plan like budgetary support, linked to the quantum of cargo routed by the railways to sea transport should be proposed.

The Centre could also consider diverting its own cargo and that of its agencies to coastal shipping, provided the overall transport costs do not increase.

The study has also recommended the setting up of a special cell under the Director General of Shipping to guide and monitor the progress of the coastal industry along with co-ordinating its activities with external agencies.

During the last decade, India's coastal fleet tonnage increased marginally from 0.47 to 0.60 gross tonnes. TCS has suggested a series of measures to encourage the growth of the coastal fleet, including waiving of import duty on bunkers, capital equipment and spares.

TAMP should also consider reducing tariff for coastal cargo to 70 per cent of the current rates.

Development of coastal shipping also assumes importance when one considers the fact that coastal cargo is expected to increase from the present figure of 120 million tonnes to 220 million tonnes by 2012.

The report, however, said there was no need for separate legislation for development of coastal shipping and suitable amendments could be made in the Merchant Shipping Act itself.

Ports in distress

• 9 ports to have private participation and should get Rs 185 crore of government support.
• A regulatory authority on the lines of TAMP for the minor ports.
• Special cell under DG Shipping to co-ordinate activities in coastal industry with outside agencies.
• TAMP to reduce tariff for coastal cargo at major ports to 70 per cent of current rates.
• No duties on import of bunkers, capital equipment and spares.