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b) Existing Modal Share in Transport During the year 2000-01, about 140 lakh tonnes of food grains was

moved on the interstate account by FCI, 98 percent of that was by rail and remaining 2 percent was by road. The data obtained from Ministry of Railways shows that the overall movement of food grains by railways is about 32 million tonnes in 2001-02 (Table 4.19). Table 4.19 Movement of Foodgrains by Railways Years Movement by Railways (in million tonnes) 1999-00 30.1 2000-01 26.1 2001-02 32.0 The movement of food grains by rail declined during the year 2000-01 compared to

previous year. The same trend can be observed for food grain production quantities also in the same year as seen from the Figure 4.16. It was observed from the Railway data that around 15 percent of the total food grains are moved by railways as priority cargo. The tariff structure is low for food grains and for long haul bulk movements generally prefer railways. Following the decision to remove restrictions on movement of wheat, paddy, rice and other food grains, coastal shipping and railways will encounter a demand surge in transport facilities in this area. For want of actual data of movement of food grains and other agricultural commodities by road, reliance has been placed on information and data collected directly from field agencies. This goes to show that for short leads and small

parcel sizes road transport will continue to be preferred and that rail and coastal shipping will be in competition for long haul movement of agricultural products. More than 95 percent of railway freight traffic consists of bulk commodities such as coal, POL, raw materials, iron & steel, food grains, fertilisers, cement and salt. The freight rates are decided on the principles of what the commodity can bear. This explains why the freight rates for salt; foodgrains and fertiliser are cheaper than those for coal, POL, cement, steel etc. This particular system followed railways is called the classification of freight rates. Yet this differential tariff structure goes against the market mantra of offering level playing field for all players in the transport system. Food grain handled in ports as coastal cargo are as given below as (extracted from Basic Ports Statistics) which is shown in the Table 4.20.

Table 4.20 Foodgrains Traffic by Coastal Shipping Year Quantity Handled (000 tonnes) Quantity Moved (000 tonnes) 1998-99 128 64.0 1999-00 129 64.5 2001-01 123 61.5 2001-02 88 44.0 Chapter 4: Coastal Traffic Estimates 4 - 34 It is seen that compared to total production the movement through coastal shipping is negligible. During the course of visits with agencies it transpired that movement of food grains between certain O-D pairs through coastal shipping is favoured provided parcel sizes and tariff structure is competitive.

c) Estimated Production and Consumption The Working Group on Crop Husbandry, Demand and Supply Projections and Agricultural Inputs for the Tenth Plan has estimated food grains requirement of 230 million tonnes at the end of the 10th Plan (2006-07). On the basis of normative requirement of foodgrains of 182.50 kg/consuming unit /year (167.9 kg cereals and 14.6 kg pulses), as recommended by the National Institute of Nutrition, the demand works out to 221.4 million tonnes considering the anticipated population level of 1135 Million. Based on behaviouristic approach, the demand of foodgrains estimated by the Working Group was around 230 million tonnes. On the other hand, supply projections for foodgrains by the end of the terminal year of the Tenth Plan have been projected in the range of 225 million tonnes to 243 million tonnes.

An adequate thrust on maize cultivation is proposed as a part of Tenth plan and it could bring a substantial increase in foodgrains production as even with existing area of about 6.5 million hectares, an additional production of about 10-13 million tonnes is envisaged. Total coarse cereal production is estimated to increase about 43-48 million tonnes by 2006-07. Thus, there is possibility to achieve a production level of food grains of about 245- 248 million tonnes by the end of the Tenth Plan. d) Forecast for Share of Coastal Shipping FCI represents a single largest institutionalised setup for the movement of food grains in India. All its activities relates to procurement of food grains, storage and movement to public distribution centres and other schemes. The FCIs activity are monitored by the movement division in the Department of Food and Public Distribution which closely

monitors the movement and co-ordinates with Food Corporation of India with railways representative in it. Traditionally the preference of FCI is railways as warehouses and godowns are established on route and this connectivity/other linkages makes for better and cheaper logistics movement of food grains for FCI than other modes. Other players in the food grain market who requires bulk movements of food grain quantities are wholesale traders. Wholesale markets spread throughout India, channel domestic and imported foodgrains to retailers. Major wholesale markets in the coastal states are located at Mumbai (Vashi), Kolkata (Postha) and Chennai (Govindappa Naikan Street). The markets do not maintain formal records for movement of goods therefore consolidation of data on the movement pattern of goods in this circumstances is not

possible. Historic trend of movement of food grains shows that around 15 percent of the total produce in the country moved by rail and coastal shipping had a negligible share with road transport capturing major share of short haul with small parcel sizes. Situation may change if the vertical integration, between importers and wholesalers, producers and wholesalers, wholesalers and retailers takes place. This kind of integration Chapter 4: Coastal Traffic Estimates 4 - 35 makes for proper flow of information and creation of a platform for bulk movements in big parcel sizes. This increase will in turn will generate opportunities for coastal shipping in future years. The estimates of food grain movement by rail and coastal shipping are presented in Table

4.21 for the years 2006-07 and 2011-12. Table 4.21 Projected Movement of Food Grains (in 000 tonnes) Year Rail Coastal Shipping 2006-07 36000 120 2011-12 45000 150 The quantity of food grains moving through coastal shipping is negligible. The economics of diverting foodgrains from rail to coastal shipping shows that per tonne km movement is far more than that of railways for selected O-D pairs except for Kakinada to Kollam located along coast. However the removal of restrictions on the movement of all agricultural products across the country is bound to encourage the north south and south north movement in future years. But till the railways decides to rationalise its freight tariff structure coastal shipping would not emerge as an attractive choice.

4.10 CONTAINERS Containerisation, which marked the second phase of transportation revolution, succeeded because it makes for safety, speed and security of the goods transported. Containerisation also offers a modular solution to the problems of transportation saves manpower cost and encourages the development of multi modal transport where modes like road and rail also come into play complementary but equally important roles in the process. Containerisation, however demands massive investments for building up of infrastructure facilities like ICDs, port terminals, handling equipment, carrier vehicles (road trailers / rail wagons), CFS, connecting roads etc. a) Ports The general cargo traffic in major ports increased to 96.6 MTPA, which is 45 percent of

the total cargo. Containerised cargo traffic is expected to scale a new high with increasing level of containerisation level taking place and also with the emergence of new ICDs and CFSs in the hinterland. With the general cargo traffic increasing at the compound annual growth rate (CAGR) of 15.7 percent, the volumes of future containerised cargo is slated for a high growth. The major commodities that can be containerised include mainly general cargo in break bulk form. Distinct from liquid bulk cargo, break bulk traffic includes a large number of low volume commodities like electrical and electronic goods, consumer goods, machinery and machinery parts, automobile components, iron and steel scrap, food grains in bags, garments, processed food products, agricultural products, handicrafts etc. A substantial part of this traffic is expected to be containerised in future.

Chapter 4: Coastal Traffic Estimates 4 - 36 Table 4.22 Containerized Cargo and Level of Containerization (in MTPA) Year Total Traffic Handled at Major Ports Containerised Cargo (a) Other cargo (b) Total

General Cargo (a + b) Level of Containerisation (as % of general cargo) 1999-00 271.923 27.69 38.663 62.443 44.3 2000-01 281.105 32.222 43.457 75.679 42.6 2001-02 287.588 37.230 46.259 83.489 44.6 2002-03 313.529 43.673 52.955 96.628 45.1 CAGR 15.66

Source: Major Ports of India, A Profile 2002-03, Indian Ports Association

The Figure 4.17 depicts the share of total container traffic handled by major Indian ports in terms of TEU's and tonnage for the year 2002-03. It can be seen that out of all major

ports Jawarharlal Nehru Port stands apart with maximum number of TEU's (tonnage) handled whereas New Mangalore, Mormugao and Paradip have no container traffic at all. The Table 4.23 gives the container handling volumes across the ports in India. Figure 4.17 Container Traffic Handling by Major Ports 200203 (in TEUs) Kandla 5% Kolkata 3% Haldia 3% Vishakapatnam 1% Tuticorin 7% Cochin

5% JNP 57% Chennai 13% Mumbai 6% Chapter 4: Coastal Traffic Estimates 4 - 37 Table 4.23 Region-wise Share in percentage of Container Traffic (In Tonnage) Region Ports 2002-03 2001-02 2000-01 1999-00 1998-99 Calcutta Haldia East Paradip 8 8 9 9 10 Vishakapatnam

Chennai South East Tuticorin 22 22 24 21 18 Cochin New Mangalore South West Mormugao 55654 Mumbai JNP West Kandla 65 64 62 65 67 Total 100 100 100 100 100 Tonnage (MT) 43.673 37.23 32.22 27.69 23.78

Source: Major Ports of India, A Profile 2002-03, Indian Ports Association

c) Existing Modal Share in Transport and Movement Pattern


CONCOR the sole carrier in this line handles the largest number of containers in the country today. Its operational performance shows that the average growth of total container traffic of the company is 12.3 percent. This is clearly in line with the approximately 13 to 14 percent growth of containerization in India. The break-up of CONCOR growth pertaining to exports/imports and domestic container movements is given in the Table 4.24 below. Table 4.24 Operational Performance of CONCOR Handling in TEUs 2002-03 2001-02 % age Growth EXIM 1031925 905058 14.02% DOMESTIC 351238 326775 7.49% TOTAL 1383163 1231833 12.28%

Coastal Shipping
Coastal movement of containers in India has picked up somewhat with the entry of couple

of private players namely Shreyas Shipping primarily on the west coast and Shahi Shipping operating on the west coast and feedering between Mumbai and JNPT ports respectively. Containers carrying International cargo form the major portion of cargo for Shreyas Shipping where as the Shahi Shipping 100 percent cargo is of International nature. The Table 4.25 highlights the coastal movement between the ports in India. Some of the movements have been proportionated to arrive at annual volumes. Chapter 4: Coastal Traffic Estimates 4 - 38 Table 4.25 O-D Pairs of Coastal Container Movement From To TEUs Mumbai J N P T 600 J N P Mumbai 17400 JNP Kandla 13000

Kandla J N P 14000 J N P Tuticorin 9000 Tuticorin JNP 9000 J N P Cochin 9000 Cochin J N P 9000

* Consultants Primary data (Year2001-02)

The following Table 4.26 figures have been derived from the above origin destination pairs.