Dredging is vital to social and economic development, in particular to the construction and maintenance of much of the infrastructure upon which our economic prosperity and social and environmental well-being depend. There has to be a definite programme for development of coastal infrastructure. This is especially vital for the coastal states.
The world population depends heavily on dredging solutions for global trade, coastal defence, urban development, energy supplies, and leisure or tourism. Dredging is an indicator of the development of the coastal states and such sustained development is essential for the social and economic development of the country. Coastal states are the gateway for development of trade between neighbouring countries and to enhance the trade. It is imperative that the definite programme for the development of coastal infrastructure shall depend on the creation of safe navigation, passage to the shore, and development of calm and tranquil waters for cargo operations.
The cargo handling is projected to be close to 1-1.75 billion tonne by 2015 and 2025 respectively. It is foreseen that 4.023 bio cubic metre dredging if expected to be consistent with the growth rate to build the additional capacities, the cumulative capital dredging shall be 1.611 bio cubic metre, and maintenance dredging shall be 2.412 bio cubic metre for the next 10 years, ending by 2025. The maintenance dredging in India shall increase by 37.1 per cent and capital dredging by 62.9 per cent by 2020, in addition to coastal, inland, and waterways dredging.
With new government ordinance and legislation, the dredging industry has increased to 32 registered Indian companies from one state-owned Dredging Corporation of India, dredging vessel classed with IRS has increased from 1.77 per cent to 4.68 per cent with the tonnage increase of 0.58 per cent to 1.83 per cent, the average cargo versus dredging from 2.34 T/m3 in 1990 to 9.51 T/m3 in 2015. Globally, in the last decade, the dredgers in the world capacity have increased by 21.8 per cent.
Indian flag dredgers constitute 3.98 per cent of all types, 5.64 per cent of TSHD, and 4.43 per cent of CSD with the global dredging statistics. Dredging fleet strength under the Indian flag has increased by 33 per cent during the last three financial years, with the incorporation of new Indian dredging. Indian dredging industry forms 5.27 per cent of the total national maritime sector, whereas 3.98 per cent of the Indian industry accounts for the global dredging industry.
The stiff competition has resulted in a sharp increase of maintenance dredging cost by 22 to 65 per cent as compared to the last decade and capital dredging has seen a sharp increase of 70 to 80 per cent.
Make in India
The Vision Document 2015 published by the Ministry of Shipping emphasises on the development of multimodal transportation, i.e., the development of the last mile connectivity through inland waterways and developing river navigation and coastal shipping. It shall be interesting to note that even though the positive, proactive measures are initiated by the present government providing time frame for development of the coastal shipping and the inland waterways, the larger question that looms is whether such vision is over ambitious and deliverable.
It is an established fact that in our country we don´t have a shipbuilding yard that completes shipbuilding in the agreed time frame with acceptable international standards, after sales delivery services do not exist and the dry dock for docking repairs. Such unavailability of services forces the Indian ship owner to either prefer our neighbouring countries or prefer the builder to undertake such after service and docking repairs, indeed increasing the charter cost or the selling cost of the vessel services. The expenditure budget allocation [Fig.1 Union expenditure Budget] for the ports sector shall establish that the vision for development of the coastal states and the inland waterways to connect the last mile connectivity is rather ambitious.
It is evident from the above pie chart that port, shipping, inland waterways, coastal shipping are allocated 7 per cent of the budget allocated for all the surface transport sectors. The above chart shall directly corroborate the developmental works and the share of the cargo moved in these respective sectors. The following Fig. 2 representing the shares of the cargo movement by respective sectors demonstrates the opportunities available vis-a-vis the challenges coupled with such opportunities.
The above statistics of the established union expenditure budget vis-a-vis the share of cargo handled by respective sectors indicates the availability of ample opportunities in development of coastal states, coastal shipping, inland waterways, dredging, and also the development of maritime last mile connectivity. The total share of the inland waterways and the coastal shipping amounts to 7 per cent (6.5 per cent of the coastal shipping and 0.5 per cent of the inland waterways) which is in proportion to the union expenditure budget allocation. It is estimated that the cargo handled by the major and non major ports in 2014 -15 is close to one billion tonne, which is likely to increase to 1.75 billion tonne by 2025, subject to depending of the safe navigation passage of the major ports to (-) 17 m CD for intake of capsize vessels. As on date most of the major ports save few other ports operate at (-) 14.5 m CD, which shall be able to attract capsize vessels. Notwithstanding anything almost all the non major ports are operating at an average of (-) 19 m CD, and for this reason volume of the cargo handled between major and non major ports are not very different, as it was 4.39 per cent in 1988 and 77.78 per cent in 2015 when compared with major ports. Fig.3 shows the steady growth of the cargo handling capacity and the traffic as handled by non major ports vs major ports. It is established from the below figure that the non major ports are fast approaching to match the volume being handled by the major ports. The reason for such trend can be attributed to the depth available for safe passage of the vessels into the ports, secondly, the handling capacities vis-a-vis the evacuation pattern of the cargo from the berth.
The volume of the cargo handled by major and non major ports are either being evacuated by road and rail as preferred mode of transport, with a small volume being evacuated by coastal shipping and inland waterways. Table 1 provides the information of the present mode of transport of the various commodities that are handled by the Indian ports. In the table below, the volume and the probability of transporting the commodities by various modes of transport were heightened as low, medium, and high volume of cargo. However, our analysis shall restrict only to the inland waterways and the coastal shipping for developing the coastal states and the hinterland last mile connectivity. The opportunity, challenges, and the possibility of internal and external development in the inland waterways and coastal shipping sector along with the risk factors were used to forecast the shift of the cargo.
From the above analysis in conjunction to the environmental aspects to reduce the carbon effect, to decongest the road sector that creates bottlenecks for the flow of road transport, particularly in the close vicinity of the major ports that are situated in the heart of the city, it is important to redistribute (Table 2 Proposed mode of transportation of commodities from the Indian ports) the cargo handled. In order to establish the multimodal transport to achieve and establish the last mile connectivity and to complete the logistics cycle, it becomes imperative to scientifically approach the issue for redistribution of the cargo shares as follows:
A shift of the transportation scenario shall change the share of the volume handled by the various sectors, introducing the concept of multimodal transport, thereby providing ample opportunity for development of the coastal states, coastal shipping, inland waterways, and socio-economic conditions of the coastal states. The developmental opportunities due to the shift shall provide ample opportunities for the development of coastal states, coastal shipping, inland waterways, and the logistical industry to complete the last mile connectivity.
With the above development plans in hand that are a part of the Sagar Mala, it is pertinent to mention that the integration of the inland waterways, river navigation, coastal shipping shall give rise to opportunities for the public private partnership (PPP) for sustained development of the coastal states, such as infrastructure development of the hub ports, the intermediate ports and integration of the coastal states for effective operational management. While there exists huge potential for infrastructure development on greenfield and brownfield project basis, widening, deepening, and maintenance of the safe passage for navigation in the inland waterways, coastal shipping, ports, and harbours are essential to avoid the formation of plume impeding the safe navigation of the vessels.
It is estimated that the Indian major ports and non major ports dredging market on an average is about 2000 crore INR per annum without accounting for the dredging cost of the inland waterways and fishing harbours. For handling the volume of the above cargo, it is established that the requirement of dredging are as follows:
From the above table, it is evident that as the volume handled by the port increased, the requirement of dredging also proportionally increased. It can be observed that the dredging volume in the last decade has been augmented four-fold. Although the above statistics is interesting for the contractors, the question that stands unanswered is whether such incremental increase of the volume shall also increase the business of the dredging market. Pre-globalisation and post globalisation, it is observed that for every cubic metre of material dredged, 2.54 T and 9.51 T were handled respectively. To handle such linear increase of the volume of cargo, the handling capacity of the port too has to increase, keeping abreast with the other infrastructure development. It is interesting to note that any increase in the dredging volume increases the cargo handling capacities, resulting in development of infrastructure to handling the cargo, with increased storage yard, increased logistics for evacuation, and increased transport system for last mile connectivity.
The above statistics shall provide interesting facts about the business opportunity available for the private developers and the contractors. On an average, the hopper capacity is 5,800 m3 of all the TSHD available in India under the Indian flag. The simple mathematical analysis reveals the following in Table 4. Considering the 12th five year plan, both the scope of capital and the maintenance dredging volume available and with simple mathematics, it is established that 28 TSHD are required with a cumulative average of 5,800 m3 hopper. However, considering the present availability of 18 Hopper under the Indian flag, there is an acute shortage of dredgers.
Perhaps considering only the maintenance dredging, it is observed that 12 TSHD are required, whereas there is an excessive availability of TSHD in the Indian market. Even if the maintenance volume increases by 45 per cent from the present available volume, it is established that Indian owners have sufficient TSHD under the Indian flag to cater to the requirements. It is furthermore interesting to mention that because of the excessive availability of the TSHD for maintenance works, there is a sharp decline in the maintenance dredging price. Nonetheless, the shortage of TSHD and the unknown risks coupled with scanty soil and subsoil information contributes to the sharp increase in the capital price per cubic metre.
In 2009, the author predicted [Times Shipping Journal, July 2009, pp 13] the cycle of the dredging industry that shall linearly increase and be in the peak in 2014- 15, saturate till 2018 - 19 and shall see a downtrend after 2020û21. It is evident from Table. 4 that the above prediction holds good. It is established therein that for maintenance dredging volume, there are excess Indian flag dredgers available in the Indian market.
The preceding paragraphs and the analysis of the port traffic data, the cargo handling data, the dredging data, the number of Indian flag dredgers provided a comprehensive information on the present scenario and the opportunities that exist for the developers and the contractors. The disadvantage of the existence of such potential opportunity is the non-availability of the government funding for the projects established from the comparison of the union expenditure budget allocation for various transport sectors. The challenge that is faced today is either the underutilised or over utilised availability of the infrastructure facilities. Failure in integration of the inland waterways, coastal shipping, and the ports resulted in development of certain segments of the transportation sector over the other. Table 5 shall indicate the risks available in the development sector.
The sustained economic development coupled with the socio-economic development shall be the indicator of a strong nation. The union or the state government may not be in a position to allocate expenditure budget to keep abreast with the global infrastructure development. In the absence of union support and budget allocation, the way forward for sustained socio-economic development for the inland waterways, coastal shipping, development of coastal states, and port infrastructure is that dredging and port development shall be opened for private participation under the private public participation.The coastal states should be encouraged to form clusters among themselves for infrastructure development and the upgradation requirement of the port. The projects awarded shall be on a long term basis to sustain the development. States should be encouraged to pool the resources to develop hub ports to be integrated with multimodal transportation to achieve the last mile connectivity. States should be encouraged to develop and integrate linking of rivers and waterbodies for effective inland navigation, flood management system, and increase in ground water level.
The article has been authored by Prof Dr George Yesu Vedha Victor, Executive Director and Deputy CEO, Dharti Dredging and Infrastructure Limited, Hyderabad, General Secretary, EADA (India) and Board Member, EADA (Asia, Australia region).
Table 1 Present preferred mode of transport of commodities handled by Indian ports
Table 2 Proposed mode of transportation of commodities from the Indian ports
Table 3 Cargo Vs Dredging Information (Pre and Post globalisation)
Table 4 Analysis of the Shortage of the Dredgers
Table 5 Risk Analysis of the developmental projects