mechanized ports reduces the sea logistics cost and ship waiting time. Trend in theshipping business is movement towards larger ships which reduces per unit cost of transportation. In bulk category trend is towards capesize vessels of 170,000 DWT, incontainers size of biggest ship has increased from 2000 TEUs in 1970s to 14000 TEUs at present while in crude oil trade VLCC of size 300,000 DWT are the most preferredvessel. These large ships require high draft ports which may not be naturally availableand hence huge investment is required in capital and maintenance dredging of thechannel. Larger vessels reduces the per ton capital cost of the vessel by around 20% andfuel cost by around 40%.Average discharge rate at the port has increased from 25,000 ton per day to 70,000-100,000 ton per day in highly mechanized ports like one at Hazira port of Essar.Similarly, for the containers number of moves by a gantry crane in an hour has increasedfrom 15 moves to 25-30 moves and it is expected to increase to 40 moves per hour. Highcargo handling rate at the port reduces the cargo handling time at the berth and shipwaiting time.Port plays an important role in development of industries in its hinterland. Export andimport based industries like steel plants, refinery, power plants based on imported coaland LNG benefits from development of deep draft mechanized ports. Land transportationcost through rail and road are much higher than sea transportation cost. It has beenobserved that development of ports has influenced the development of industries aroundthe port and eventually led to development of cities, many port cities around the worldare example of that.There are several challenges in development of ports, the key ones being gettingenvironmental and other approvals and acquisition of land for the port and port basedindustries. High investment will be involved in the capacity expansion in the port sector.Investment will be required in 3 fronts – creation of deep draft port and providingtranquility, development of highly mechanized facility and yards, and connectivity of ports to the hinterland by railway network or good quality road capable of handling hightraffic flow. Most of the ports in India do not have natural draft for direct berthing of large size vessels. Huge investment in dredging of channel is required to increase thedraft at the port. Port connectivity is the biggest challenge facing the port sector. Most of the ports are lacking because of the bottleneck in the evacuation. Ports need to beconnected to the hinterland by high quality road and rail infrastructure. Creation of roadand rail infrastructure requires involvement of several government agencies for approvals, acquisition of land, and development of the facilities.