FLAG: Coastal Shipping & IWT Summit, Kochi

HEAD = Water transport key to preventing cargo gridlock

FIEO in association with Smart Ways B2B Connect Pvt Ltd and Kerala Sea & Trade to organize The Coastal Shipping & IWT Summit 2013 on May 6, 2013 at Kochi. The summit was inaugurated by Mr Oommen Chandy, Chief Minister of Kerala. Mr Walter DSouza, Chairman, FIEO (Southern Region) made the inaugural address. Mr K. Babu, Minister of Fisheries, Ports, Government of Kerala, delivered the special address. Mr Gautam Chaterjee, Director General of Shipping; Mr Vishwapati Trivedi, Chairman, Inland Water Authority of India (IWAI); Mr K. Mohandas, Former Secretary, Ministry of Shipping; Mr Wilson Rajan, Director, Smart Ways B2B Connect; among others, spoke during the inaugural session. The programme was attended by more than 200 representatives from the exim trade. Mr Chandy in his address said the Kerala Government is willing to hold discussions with other State Governments to work out an appropriate level of taxation to promote coastal shipping. The Chief Minister also called for concerted efforts at the national and state level for shifting the focus to coastal shipping from road and rail. He said the highways are grossly inadequate to handle the increasing number of vehicles, while the rail network is unable to cope with demand. He said Kerala is the first State to introduce financial incentives for water transport. Mr Babu said the government proposes to divert at least 20% of the cargo through coastal shipping by 2015 and 40% by 2020. The coastal traffic potential through the non-major ports in Kerala is estimated to be 4.64 million tonnes during 2012-14 and 7 million by 2019-20. This target is proposed to be achieved by a three-pronged strategy: modern infrastructure, incentives and institution building. Mr DSouza called upon the Kerala Government to come up with a commodity oriented transport plan with critical assessment of origin and destination of cargo and costing of services between different modes of transport. As the investment and business opportunity in this sector especially in developing fleets, jetties, handling equipments, etc need attention, emphasis should be given for interconnection between road and rail with waterways for integration with modern facilities of multimodal transport system. There is huge opportunity in tourism and regular transport. Development of coastal shipping and inland water transport is a golden opportunity for Indias future economic development and offers many inherent advantages. Mr Chatterjee stressed the need for joint ventures between coastal shipping and land transport owners to provide a cost effective solution to move cargo. He pointed out that the coastal shipping fleet accounts for less than 10% of Indian tonnage and is still in its infancy. There is need for comprehensive coastal shipping policy frame work and proactive role by State Governments to promote the sector. The first technical session was on Understanding the Cargo Owners Perspective to align, engage and build a commitment towards an instant shift. The participants included Mr DSouza; Mr V.S. Pradeep, President, Cochin Customs Agents Association; Mr Sundar Rajan, Vice-President, Somani Syramics; and Mr Joseph Augistin, General Manager, Binini Zinc Ltd.

The second session, on Creating an Understanding, Awareness and a Pragmatic and Sustainable Plan for coastal shipping and inland water transport was addressed by Dr Vishwapati Trivedi, Chairman, Inland Waterways Authority of India, Government of India; Mr Gautam Chatterjee, Director General, Shipping; Mr G. Vijayaraghavan, Member, State Planning Board, Government of Kerala; and Mr Anil Devli, Chief Executive Officer, Indian National Shipowners Association. The last session, on Engaging Ship Owners and Service Providers to encourage and empower them in creating assets and services value was addressed by Dr K.N. Raghavan, Commissioner of Customs, Kochi; Mr Johnson K. Mathew, Chairman and Managing Director, Trans Asian Shipping Services (P) Ltd; and Capt Ashok Shrivastava, Chief Executive Officer (Shipping Services), Allcargo Logistics Ltd. Some of the major recommendations of the summit are as under: There is a need to have an integrated approach to the entire subject of inland waterways, coastal shipping, ports, terminals, connectivity and land transport. Coastal and IWT should not be seen in isolation since they are part of a larger chain. Governments must plan policies and thoughts which would look at all of this in an integrated fashion. Complementing the land with the sea legs and nurture cooperation rather than competition. A possible answer could be an integrated transport policy. Need for the promotion of a robust coastal fleet which would lead to suitable tonnage being operated on the coast of India and being able to filter old tonnage being dumped into our waters. Construction, building, manning and operating rules to be tailor made to promote competitive operation of vessels in the IW and coastal waters. Do not apply international regulations to such trade. Need to instill long-term cargo support schemes which would lead to investment in this sector and will also aid in obtaining financial support from banks and FIs which will help in building fleets and capacities. Policies to incentivise a modal shift of cargo from land to sea must be formulated and implemented. Model could be that of the Government of Kerala. Need for cheaper cost of finance for coastal ships to be built and owned in India. A possible fund with seed capital from the Government asking a financial institution such as SBI, IL&FS or IDFC to raise balance fund. This money would be used for providing finance at a lower cost to the shipbuilding and the shipping industry. Extention of the Tonnage Tax Scheme to inland and coastal vessels not registered under the M.S. Act. Declaration of infrastructure status for coastal shipping on the lines of the IWT. A possible start can be made by the Government of Kerala and simultaneously lobbied with the Department of Economic Affairs. A strong recommendation from Kerala would aid a long way in aiding the DEA to make up their mind. Manning scales for near coastal vessels and IW vessels must be rationalised in order to train and create stronger manpower to man such vessels. This will also increase supply and reduce costs of training through reduced entry barriers. Provide a logical growth from the IV to the NCV to the MS vessels so that the seafarer can look for growth in his career. Do not apply international regulations to such trade. Need to hook up with the National Skill Development Council for creating such trained manpower.

Policies to aid the development of passenger traffic along the coast and inland waterways. Need to create a repository of information and data about cargo that is moved currently by sea as well as cargo by road and rail. This repository should also ensure availability of information in the public domain from agencies such as the IWAI, State and Central Governments, ports and maritime authorities. All policies and ideas must always be such as would pay paramount importance to safety at sea and protection of life and the environment. The cost of coastal shipping has to be closely analysed and brought down; port tariffs, vessel and vessel related charges, taxes, etc. Need for improvement of quality of service by the Government related agencies. Dedicated berths at ports and other facilities at ports to be made better. Plan and develop seamless movement across coastal and inland waterways. Frequent check on the various freight forwarders to avoid dubious operators. Necessary directive from central and state government and commitment from government owned PSUs and undertakings to take the coastal and inland waterways route. Need for an effective integration of smaller ports with the inland waterways with appropriate hinterland connectivity. The Government should consider customs duty exemption for spares of coastal vessels The Customs Department should permit EDI filing of bill for coastal goods which is presently done through manual mode. Market mapping must be done on an urgent basis so that the market potential of the sector can be quantified. A commodity oriented cargo transport plan with critical assessment of origin and destination of cargo and costing of services by and between modes of transport needs to be made. Coastal and inland vessel tariffs be suitably structured, formulated and announced for all non-major ports in the State; this will help the ship owners provide proper quotes to cargo owners/consignees. Have a minimum of 11-metre air draft under all bridges. Old bridges to be replaced with new ones on priority basis to allow seamless navigation. Have a futuristic and integrated plan for developing and operating the port sector in the State.