Time for TN Govt to focus more on Tuticorin Belt as industrial hub

Port Wings is bringing out series of articles on the major issues pertaining to the EXIM sector every week till the Tamil Nadu Government’s Global Investors Meet (GIM). This week, we analyse about the importance of Tuticorin region in attracting investments.

source: http://www.portwings.in/articlesinterviews/global-investors-meet-time-for-tn-govt-to-focus-more-on-tuticorin-belt-as-industrial-hub/

Port Wings News Network:

Tuticorin (also known as Thoothukudi) is situated at almost the southern tip of India and its major port located so close to East-West International Maritime Route.

It is about 650 kilometers from Chennai and the nearest major urban centre is Madurai which is about 135 kilometers from the city. While the district’s road connectivity is relatively fair, its railway and air connectivity is very limited as far as the movement of freight is concerned.

After Chennai region, Tuticorin is another largest industrialized region in the state of Tamil Nadu with huge potential for further development with all modes of transport – ocean, road and air.

If the State Government projects the region before the investors during the proposed Global Investors Meet (GIM) listing out all potentials, there is no doubt that the region would attract more investment at the meet.

For Tuticorin region to develop as expected by different stakeholders, considerable investments would need to be made in infrastructure.

According to CII’s Vision 2025 Document for Tuticorin, some of the investments would relate directly to the improvement of infrastructure of the district and are essential to attract private sector investments into the town. There is also a need for substantial other infrastructure investments, which will be of immense benefit to the district and are indeed a prerequisite for the envisioned growth to be realized, are actually investments that would benefit the larger economy of the State and the country as a whole.

ROLE OF STATE GOVERNMENT IN PROMOTING TUTICORIN:

Even though the Tamil Nadu Government has a policy and focus in place to develop Tuticorin as a major industrial and commercial centre in Tamil Nadu for some time, to promote the regions before the potential investors, the state government has to walk an extra mile.

According to the Vision Document, the government should ensure at least two big ticket investments, possibly an automobile plant and a ship building unit, which is a quite possible industry given the potential for multi-modal connectivity in the region.

Besides, setting up a dedicated authority to oversee the planned and integrated development of the industrial and commercial areas in the districts would send a right signal before the investors converging during the Global Investor Meet.

VOC PORT -IDEALLY LOCATED FOR BECOMING A HUB PORT:

Tuticorin Port’s location at the southern tip of India near the East-West trade route makes it ideally suited to become a major container hub port for Indian container cargo that is presently being transshipped through Port of Colombo in Sri Lanka.

The fast growing Indian economy and increased containerization of Indian cargo would give tremendous boost to the Port’s tonnages handled if it were to become a hub port.

In the Budget presented on July last year, the government allocated Rs 11,635 crore for the expansion of the V O Chidambaranar (VOC) Port in Tuticorin. Further, it was a confirmation that the Union government is of the view that the existing port has the huge potential of handling bigger vessels in the future and dominate the region as a major hub port on the International Maritime Route.

According to EXIM fraternity, the outer harbour project is a revolutionary concept and if goes as per the plan, it would greatly help the Indian exporters as well as the Government of India with enhancement of facilities.

The development of the outer harbour at VOC Port will be completed in four phases over 24 years (2019-2043) and will cost an estimated Rs 23,432 crore.

IMPORTANCE OF MARITIME LINK:

VOC Port, one of the 12 major ports in India and the second biggest in the state after Chennai, was established in 1974. It started by importing coal for the Tuticorin thermal power station, but over the years has diversified to handling export and import of timber, granite, sugar, machinery, petroleum products, liquefied natural gas, liquid ammonia, chemicals and fertilisers.

Now, business prospects growing manifold in the port's hinterland of south Tamil Nadu, Kerala and Karnataka.

IMPORTANCE OF ROAD, RAIL & AIR LINK:

While the road connectivity in the region is relatively better, there is a strong need for upgrading rail and air connectivity. The State Government has already initiated talks on extending the Kolkata-Visakhapatnam Corridor to Chennai and Tuticorin.

While the doubling of rail tracks for a dedicated freight movement from Madurai to Tuticorin is progressing at a snail’s pace, the exim fraternity also urging the authorities concerned to improve air connectivity to the district.

TASK BEFORE THE TAMIL NADU GOVERNMENT:

Even though the VOC Port is managed by the Union Government, industries located in and around the port area are in the control of state government and any infrastructure improvement to these areas would positively project the region as “invest-potential area” before the likely investors.

Editorial: Turbulence in trade could jeopardise Country's growth

Source: http://www.portwings.in/editorial/turbulence-in-trade-could-jeopardise-countrys-growth/

Port Wings Editorial, June 24, 2015:

The latest data showing the sharp decline in trade for May 2015 has rattled the confidence of exporting community, which was pinning hope on new Foreign Trade Policy to help them out.

Though the Government of India and its Commerce Ministry yet to grasp the whole situation, which is developing day-by-day in the current financial year, experts started sending out the louder signals that the turbulence is ahead and be ready for eventualities.

When the new NDA government at the Centre led by Narendra Modi outlined its economic policy and even unveiled the new FTP in April, which was delayed by an year by the previous UPA government for want of perfect idea, the trade community was of the view that the phase of stagnation in the economy has gone and indeed a new dawn has descended on the country.

However, the latest figures have forced the trading community to change their view on the promises of the Modi-led Government on supporting the trade and the reverse phase could be attributed to the still existing confusion after the new FTP unveiled just two months ago.

During 2014-15, the economy has registered a growth rate of 7.4%, inflation is down to 5%, the current account deficit has fallen to within 1% of the GDP and the rupee has remained stable against the dollar.

The new government has laced with hopes that the business scenario would change after the change of guard in New Delhi.

However, to their dismay, nothing much changed and the trend has been on the reverse, putting enormous pressure on the Commerce Ministry to change its tactics to improve the confidence as well as the exports from the country, so that it can reach to a safer position on the positive trajectory in the current financial year.

Foreign Trade Policy, per se, recognises the global challenges faced by the export sector in the country and also identifies the potential sectors which could emerge as winners in the next five years. However, without a sound mechanism to analyse the turbulence well in time, for that case just in time, Government may falter on the track.

As a cascading effect, the turbulence in trade could hit the traders, which in turn, reflect on the overall performance of the country before the global benchmark.

So, the NDA government, which is busy nowadays with several other unimportant tasks in the political arena, needs to focus more on the economic front, as any jerk in trade could not only dent the country’s image abroad, but also impact the livelihood of lakhs of exporters.

L&T Kattupalli Port Comes to the Rescue of Maersk Line

Source:http://www.portwings.in/ports/lt-kattupalli-port-comes-to-the-rescue-of-maersk-line/

Port Wings News Network:

Sending direct signals to the Chennai Port management on a possible switch-over of calling port in the near future if the congestion and impromptu strikes by container trailers are not arrested in time, Maersk Line, which strongly vouches for reliability and adherence to its customers, suddenly decided to call at L&T Kattupalli Port instead of calling at Chennai port.

According to sources, though the sudden change of port of call by Maersk Line from Chennai to Kattupalli (some 30 kms north of Chennai Port) on June 15 has been maintained as “contingency plan” due to continuing congestion and impromptu strikes by container trailers for the past few weeks, trade fraternity strongly feel that the “Message is served to Chennai Port management.”

L&T Ports Kattupalli is a division of L&T Shipbuilding Limited, a joint venture company formed by Larsen & Toubro Limited and Government of Tamil Nadu’s Tamil Nadu Industrial Development Corporation Limited (TIDCO).

According to details available, Maersk Line had approached Chennai Customs on June 12 to allow them to discharge all containers and load all export containers – where the Shipping Bills had already been filed at Chennai Port (INMAA)-  through Kattupalli Port. After analyzing the appeal from the shipping liner, Chennai Customs accepted the request and issued necessary permissions within a matter of hours.

Accordingly, Maersk vessel MV Sea Land Comet berthed at Kattupalli at 0200 hrs on June 15^th and after exchanging 3246 TEUs sailed at 0400 hrs on June 16th with vessel turnaround time of 26 hours, impeccable by standards in Indian ports.

Import containers were moved from Kattupalli Port to many of the prominent CFS’s , with APMT, Triway, Sattva etc complementing Kattupalli Port on the handling.

Transporters were also expressed happiness on the swift turnaround time, with one truck making three or more round trips a day from CFS’s to the port. Exim community has benefitted from this move and appreciated the support from Chennai Customs at such short notice. They also complimented Maersk Line for making the move.

The CHA community also responded very quickly to the change in port of call and appreciated the support provided by Kattupalli Port in familiarization with the processes there. Kattupalli port has come in for praise by the Exim community for their performance at such short notice and for the facilities offered to users. Trade also noted the ease of using this modern port situated on the northern outskirts of Chennai.

Port Wings Editorial: BBIN Motor Vehicle Agreement, a right step ahead

Source: http://www.portwings.in/editorial/bbin-motor-vehicle-agreement-a-right-step-ahead/

Editorial, Port Wings, June 17, 2015:

India, which is regarded as the super power in the SAARC Region, has taken the right step towards creating a road corridor that would be beneficial to the whole ASEAN Region.

The Bangladesh, Bhutan, India and Nepal (BBIN) Motor Vehicle Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic amongst BBIN, approved by the Union Cabinet few days ago, could be a real game-changer for the region as well as the mammoth country like India, if it is implemented in letter and spirit.

The agreement, conceived and formulated by India after intense series of consultation with other stakeholders from Bangladesh, Bhutan and Nepal, also pops up an important indication of India's readiness to play a more determined leadership role in the SAARC Region.

It’s a well known fact that South Asia with globally valuable markets is one of the least linked of the world, as far as the road connectivity is concerned.

The European Union, comprising of over two dozen countries, has good road connectivity and the link has helped those countries to grow without spending much on transportation.

On the same line, if the proposed agreement is implemented, it will help an exporter from a remote village in Kerala to reach his potential buyers sitting near Chittagong in Bangladesh or at Thimphu in Bhutan, without relying on the costly mode of transports like the air.

Besides, it will also help India to pitch for a greater role in ASEAN region with the road link could be extended upto Vietnam and Cambodia in future.

To secure its interests, China has been pushing its Silk Road projects, land and maritime, calling these 'One Belt, One Road', backed with $200-plus billion in investments (including China-Pakistan Economic Corridor).

Since ancient times, Asia had been connected in a variety of ways by land and sea. Like China, India too is seeking to strengthen connectivity to the East and West. India and China are also working together on Bangladesh, China, India and Myanmar (BCIM) Corridor.

Improving road connectivity among these nations is crucial to developing its full potential, especially in the economic sector.

Currently, whatever little trade happens in this sector is total India centric. For instance, Bangladesh imports much from India and has a strong garment export arrangement with the developed economies in West, but shares no significant trade ties with Bhutan or Nepal.

Another important aspect of the BBIN motor vehicle pact in particular, and increased sub-regional trade in general, is the boost that small and medium enterprises will receive.

Apart from economic prosperity, the road link, if extended upto Vietnam or Cambodia, will open a new option for travelers to understand the culture and history of the ASEAN countries from close quarters.

Let’s hope for the best.

Tamil Nadu Maritime Board needs a total revamp

Port Wings is bringing out series of articles on the major issues pertaining to the EXIM sector every week before the Tamil Nadu Government’s Global Investors Meet (GIM). This week, we analyse about the importance of Tamil Nadu Maritime Board in attracting investments.

Source:http://www.portwings.in/articlesinterviews/tamil-nadu-maritime-board-needs-a-total-revamp/ 

Port Wings News Network:

With the Tamil Nadu Maritime Board’s (TMB) policies for developing more ports in the state to become a true “Maritime gateway state of East Coast” shrouded in mystery, experts in Exim sector here feel that the Chief Minister J Jayalalithaa should revamp the entire board to meet the expectation of the trade and investing community.

A few of them have even said that the Tamil Nadu Government could get more on the potential of maritime board from the Gujarat Maritime Board (GMB), which has earned laurels from various quarters for playing pivotal role in bringing in sustained revenue for the state as well to the country’s exchequer.

Even though the state government has been claiming that it is not lagging behind in promoting the highly potential state as the maritime gateway to South Asian ports in East Coast, ground reality is totally different and the time has come to resurrect the TMB from deadwoods.

Experts also feel that any further delay to capitalize the emerging opportunities in port sector through the vibrant maritime board could push the industrially-developed state backwards in providing better investment destination coupled with dedicated sea connectivity to other countries.

Tamil Nadu Maritime Board

The Tamil Nadu Maritime Board was formed under the Tamil Nadu Maritime Board Act of 1995 in March 1997, whereby the erstwhile Tamil Nadu Port Department was converted into a Maritime Board for the purpose of administration, management and control of the non-major ports.

The State of Tamil Nadu has a coastline of about 1076 Kms. Along this coastline, there are three Major Ports, namely, Kamarajar (Ennore), Chennai and VOC Port, Tuticorin notified under the Major Port Trust Act, 1963 and 23 Non-Major (Minor) Ports notified under the Indian Ports Act 1908. The major ports come under the control of Government of India and the non-major ports come under the control of the state government.

All the non-major ports in Tamil Nadu, except the Kattupalli Port, are anchorage ports without berthing facilities and hence cargoes are transshipped from the vessels at mid-stream to the shore and vice-versa through barges or submerged pipelines.

Gujarat Maritime Board

On the other hand, Gujarat Maritime Board was created in 1982 under the Gujarat Maritime Board Act, 1981, to manage, control and administer the minor ports of Gujarat.  Since its inception, Gujarat Maritime Board brought all stakeholders under one roof and resolved the then existing issues in the Port sector like obsolete technology, low loading rates, congestion and delays, poor connectivity with the hinterland etc.

Now, the state of Gujarat boasts of four important private ports viz Pipavav (India’s first private port), Mundra Port & SEZ, Dahej and Hazira. Of the 41 non-major ports, 19 are operational. Gujarat has the distinction of handling the maximum non-major port cargo traffic in India.

Besides, to facilitate and meet the cargo projections, GMB has proposed the development of some new ports. According to details available, GMB has developed about 40 ports in the last 20 years.

TMB’s lackluster performance:

While the growth and prominence the GMB had achieved over the years in establishing Gujarat state as the true maritime gateway in West Coast was missing in the case of TMB. This is despite being on the international Maritime Highway connecting Singapore and Jebel Ali. Though the maritime board has been “planning” development of over 20 minor ports as well as captive ports in Tamil Nadu for years, only three of them were actually materialized in recent times.

The delay in developing minor ports along the navigationally-suited coastline (of the state) would force shifting of industries and its allied Exim businesses in future to those states, who could provide all hassle-free facilities, says the experts.

Appeal to Chief Minister Jayalalithaa

According to Exim analysts, TMB, which could have developed the Tamil Nadu state as a maritime gateway in East Coast (like GMB in West Coast) given the phenomenal industrial growth since mid-1990s and a better road and rail connectivity, had miserably failed to turn the state’s minor ports as growth engines.

Growing Competition from Neighbouring States:

Sensing the importance in equipping it port sector to increase its revenue, neighbouring Andhra Pradesh led by its Chief Minister Mr N. Chandrababu Naidu has decided to constitute the long pending AP Maritime Board to attract over Rs 30,000 crore investments.

Andhra has nearly 1,000-km coastline with 14 notified non-major ports and a Major Port (centre-controlled) at Visakhapatnam.

Even without a maritime board, Andhra Pradesh has divided its coastline into five different zones and concentrating on them. Due to its concerted efforts, Krishnapatnam and Gangavaram ports in the state are flourishing with heavy cargo movements throughout the year.

Besides, Odisha has also chalked out well-planned strategies to develop minor ports in the state with more emphasis on latest cargo handling facilities.

Perform or Perish:

So, the time has come to perform or perish as for as the TMB is concerned. If the Tamil Nadu government-controlled Tamil Nadu Maritime Board fails to wake up from deep slumber despite the growing opportunity in the port sector now, then it could certainly put spokes on the wheels of growth in the state.

Time to form a Coordination Committee to ensure hassle-free EXIM trade

Port Wings is bringing out series of articles on the major issues pertaining to the EXIM sector every week before the Tamil Nadu Government’s Global Investors Meet (GIM). This week, we analyse about the importance of Coordination between Tamil Nadu and Union Government to ensure EXIM Trade.

Maggi Row: Need of the Hour is the holistic approach

Source: http://www.portwings.in/editorial/maggi-row-need-of-the-hour-is-the-holistic-approach/ 

Editorial in Port Wings, June 10, 2015:

Ever since the Government of India pulled the plug on Nestle product Maggi noodles citing food safety and consumption issues, there has been a hue and cry over the status (rather quality) of MNC products across the country.

As anticipated, media playing its role in fanning the crisis as something happening for the first time in the country.

It was the state of Uttar Pradesh, which cracked down on the otherwise famously know 2-minutes readymade food, first more than a week ago. And the other states, starting from Kashmir to Tamil Nadu joined the band wagon and culminated their zest with either banning the product or forcing the shops to clear the stocks from shelves.

While there is no question about the action that followed the flurry of reactions both online as well as off-line, the issue has opened Pandora ’s Box for the multi-national companies to revisit their strategies in marketing their products in Indian market.

Before the entry of MNCs in food products-related market in India, there were a few Desi players who ruled the market share for years.

With the Globalization, Indian markets were opened for MNCs and it marked the beginning of end of the Desi players. They were unable to withstand the flurry of advertisement campaigns unleashed by the MNCs in promoting their products. After a period, most of the desi players, who were just unable to market their products, started disappearing one by one, and a few merged their businesses with the giant MNCs to stay back in the market.

While the market forces as well as the consumers put blame on the very Desi players for not able to match the quality offered by the MNCs in their products and disappearing from the market, they failed to notice that it was the clear strategy by the MNCs to beat the Desi players through vigorous advertisement campaigns and monopolize the segment with their products later.

Regular drinkers of carbonated drinks offered by a well-known company would tell the difference in the taste of the same brand offered by the company in Singapore, Dubai and in India.

While the company always claimed that it was the outcome of the water sourced in these countries for manufacturing, users know that the company employs a different standards for different countries.

And it is the case with the most of the MNCs in the world’s largest market, who prefer to follow different standards for Indian consumers.

Until now, there were no reports of Indian Food Safety Authority doing regular sample checks on these MNCs products in the country. But the time has now to start implementing stringent measures for both the Desi players as well as MNCs to ensure that consumers get the right products, not the one that has been customized to meet Indian standards.

The crisis also opened an opportunity for the Modi Government to check the quality of products made available to Indian consumers by both Indian as well as Multi-National companies.