Sagarmala Project - How it will change logistics for India?

The article talks about the sagarmala project and its background about it.

Created on - October 12, 2022

Introduction

The Government of India launched the Sagarmala Project in 2015 after receiving Cabinet approval. The project aims to utilize the nation's 7,500 kilometers of coastline to its fullest economic potential. The project also aims to improve the infrastructure for swift, economical, and efficient cargo transportation to and from ports.

The Sagarmala Programme's major goal is to lower logistical costs for domestic and EXIM trade with little infrastructure expenditure.

The Sagarmala Program was authorized by the Union Cabinet in March 2015, and the Ministry of Shipping created a National Perspective Plan that was made public on April 14, 2016. 500 projects have already been identified, with a total estimated infrastructure investment of Rs. 3.55 billion across all pillars. Out of these, 143 projects totaling Rs. 0.88 billion have been finished, and 190 projects totaling Rs. 2.12 billion are presently under progress.

The remaining 167 projects are in various stages of development, with completion anticipated far before 2035. The Central Line Ministries, State Governments/Maritime Boards, and SPVs are responsible for carrying out these projects. Wherever possible, PPP and the private sector are preferred methods of implementation.

What is Sagarmala Project?

The Union Cabinet adopted the Sagarmala Programme in 2015 with the goal of developing the port infrastructure holistically along the 7,516 kilometers of the coastline through modernization, mechanization, and computerization.
The Sagarmala Programme's goal is to lower logistics costs for domestic and EXIM (Export-Import) trade with a minimum investment in infrastructure.
By 2025, Sagarmala could increase India's exports of goods to 110 billion USD and add an estimated 10 million new jobs (four million in direct employment).
With potential airline operators, the Ministry has begun the ambitious Sagarmala Seaplane Services (SSPS) Project.

Components of the Sagarmala Programme

Port Modernization & New Port Development: Expanding existing ports' capacities and building new greenfield ports to de-bottleneck them.
Port Connectivity Enhancement: improving the connectivity of the ports to the hinterland, and maximizing the cost and speed of cargo transfer through multi-modal logistics strategies involving domestic waterways (inland water transport and coastal shipping).
Port-linked Industrialization: Creating Coastal Economic Zones and industrial clusters close to ports will cut down on the time and expense of shipping domestic and international goods.
Coastal Community Development: encouraging the sustainable development of coastal communities through initiatives for job creation, fisheries development, and coastal tourism, among other things.
Coastal Shipping & Inland Waterways Transport: encouragement for using inland and coastal rivers for environmentally benign and sustainable cargo transportation.

Sagarmala Project Objectives

The goal of the SagarMala project is to lower EXIM logistics costs. The project's goals are as follows:

lowering the cost of domestic cargo transportation by maximizing the mode mix.
locating potential industrial sites close to the ports to lower the cost of logistics for bulk goods.
To improve export competitiveness, developing discrete manufacturing clusters close to ports.
minimizing the time cost of moving containers from export to import.
The initiative aims to reduce the cost of domestic cargo logistics by making the best use of infrastructure investments. The initiative also promises to create up to 40 lakh new direct jobs and 60 lakh new indirect jobs.

Sagarmala Development Company Limited

The Sagarmala Development Company Limited (SDCL), founded in 2016, creates and formulates projects resulting from the Sagarmala project's National Perspective Plan. The Companies Act of 2013 allows for the incorporation of the SDCL.

The goals of SDCL are as follows:

The projects that are created under NPP are developed by it.
The SDCL supports the Special Purpose Vehicles (SPVs) established by the federal, state, or state maritime boards or ports for initiatives that are in line with the SagarMala project.
In addition to raising money in accordance with project needs, it offers funding opportunities to residual projects.
For the selected Coastal Economic Zones (CEZs) under NPP, SDCL creates a thorough master plan.

Coastal Economic Zone

A National Perspective Plan (NPP) for the entire coastline has been created to identify prospective geographic areas that might be referred to as Coastal Economic Zones in order to carry out the Sagarmala project (CEZs). With the Sagarmala project, it is anticipated that the living conditions of those who reside in CEZs will significantly improve.