Mr. Haranadh shared his views on the steps taken for modernization and the future investment plans of the port, on the Sagarmala Project, impact of Budget 2017 and GST on port sector, etc with Rakesh Roy, Editor, Maritime World Services.
What are the measures that Visakhapatnam Port has taken towards its modernization and to better serve global trade with International standards?
The business environment around global port sector, along with shipping technology, cargo handling technology, etc, has changed in the last few years. Therefore, the port needs to deepen their harbours and modernise their entire supply chain to carter the global trade. In last 4-5 years, Visakhapatnam Port has deepened its inner harbour by dredging to receive Panamax vessels, which was not possible in the past.
Visakhapatnam Port has offered 8 of its total 24 berths to modernize in public-private partnership (PPP) mode, which includes a major coal handling berth, iron-ore handling berth and become one of the deepest container terminals. In my view, PPP mode will bring more infrastructure to handle cargo in the port.
To improve Traffic congestion in the port and for paperless container movement, we are now bringing Radio Frequency Identification Device (RFID) to enable container trailers and trucks enter the port without any manual intervention. By March 2017, all the gates at Visakhapatnam Port will be equipped with RFID.
Visakhapatnam Port has taken several steps to make it easy for port users as a part of promoting ‘ease of doing business’ by implementing digitisation of the entire operations of the port and all transaction by e-mode. The port has also started SMS and Email services for their customers to know all their status, requirements of the vessels movement and cargo handling requirements, etc.
What are the fresh investments that Visakhapatnam Port is planning to augment the port’s capacity and for its infrastructure development?
Visakhapatnam Port currently has a capacity of 98 million tonnes and is handling a total of 60 million tonnes. The port is planning to expand its capacity to about 133 million tonnes by 2020. A fresh investment of around USD 4.5 billion is likely to be spent towards extension of the container terminal and upgrade of the iron-ore handling terminal at the port. The port is modernising its 4 existing berths to bring these up to international standards at a cost of approx. USD 6 billion. Looking at the growing crude oil import scenario in the coming days in India, we are now strengthening and upgrading our crude oil cargo handling capacity.
How has the government’s SAGRMALA project helped Visakhapatnam Port at large?
Under the Sagarmala project, we are improving major road connectivity to the port. While the port’s container handling capacity is going to be doubled in next few years, the major roads connected to the port are now under construction to expand the lanes from 2 to 4 which will help traffic congestion of the city. This has been funded by the Sagarmala project.
What are your views on the recent Union Budget 2017, and its impact on the Indian Port sector and how will GST after implementation help the industry?
The Union Budget 2017 is particularly important for the transportation logistic cost point of view. In India, the logistic cost is around 15-16 per cent to the total cost of production while in China, it is merely 7 per cent. If you look at the recent budget, many initiatives have taken to reduce the logistics cost in transportation.
Certainly GST, the major economic reform, will be a major boon to the logistics sector in the coming days. I firmly believe that with the implementation of GST, the transportation cost will be coming down. In India, our major industries are located 700-800 km away from ports wherein China it is only 150-200 km. Therefore, the transportation and logistics cost are very high in India. Also, the various toll gates and disparity on taxation system in different states of India have worsen the situation further. Once GST comes into force, it will bring parity in taxes across the country which will further help ease of doing business in India and reduce the logistics and transportation costs.