The Ministry of Shipping of India has joined other industry sectors in seeking an economic stimulus package to tide over the difficult times the shipping sector is passing through. The stimulus package is likely to be announced next week, Exim News Service informed.
The Shipping Minister, Mr T.R. Baalu, told the Lok Sabha that the domestic industry was coping with the continuous decline in the ship freight on the international waterways, which had declined by 50-70 per cent.
The shipping sector requires a stimulus package to execute nine port projects through the Public-Private Partnership (PPP) model, including dredging, which envisages investments worth over Rs 1 lakh crore, the Shipping Secretary, Mr A.P.V.N. Sarma, has said.
Among the concessions sought are tax exemptions, which will ease financing of the projects, he explained.
The impact of lack of finance would be felt only after two or three years, when the demand jumps and there would not be the necessary infrastructure, Mr Arvind Mahajan, Executive Director (Advisory Services), KPMG, said.
On the liquidity crunch being faced by the coastal ports, Mr Sarma stated: "The coastal states do not have fund for dredging operations. The stimulus package should allocate funds to them."
"Of the nine projects, two have already been approved by the PPP Appraisal Committee (PPPAC). The financial biding for two will commence shortly. We will also approach the PPPAC for clearance to three more ports in the current fiscal," he revealed.
The PPPAC approved two port projects worth Rs 1,008 crore proposed by the Department of Shipping in October this year.
The two projects, a Rs 467-crore deep draught coal berth and a Rs 541-crore deep draught iron ore berth, will come up at the Paradip Port on a Build, Operate and Transfer (BOT) basis.
Mr Sarma emphasised the need for introduction of transparency in the shipping sector so that logistics and freight cost was reduced and end users benefited to the maximum.
The Planning Commission is also persuading states to remove local levies and taxes on goods movements at their various checkpoints, as it is these points which cause maximum delays to smooth movement of transportation, an official said.