India announces plans for new ports as delays and backlogs mount
India is suffering growing pains as global demand for its agricultural and manufacturing goods is greater than its transportation infrastructure can handle. This is most evident in the country’s ports network. 90% of India’s international trade by volume is transported by sea; however, the ports are unable to keep up with demand.
For the fiscal year ending March 2011, Chennai, the second largest port, handled 1.52m TEUs, a 25% increase over the previous period whereas Nhava Sheva, the largest port handled 4.27m TEUs, a 5% increase for the same period.
Not only is capacity an issue but labour strikes and ongoing port construction are resulting in massive delays. Because of these issues, ocean carriers are diverting cargo to private ports and in some cases to other countries such as Sri Lanka where cargo is then transshipped to India.
Ocean carriers such as APL, Hapag Lloyd and CMA CGM have imposed congestion surcharges and have diverted services as a result of delays at Indian ports, particularly at Nhava Sheva and Chennai, which combined handle almost 70% of the country’s total ocean cargo. Average turnaround time for ships at Indian ports is at least 4.4 days compared to less than a half day in Singapore and Hong Kong.
As part of its ambitious goal of tripling exports by 2017, India’s government announced it will seek private funds to build seven new ports. Combined, the seven ports will cost an estimated 350bn rupee ($7.6bn) and are part of the government’s overall plan to spend about $1 trillion to upgrade the country’s infrastructure by 2017. Dredging deeper harbors and building additional ports along the eastern side of the country to increase trade with Asia will be included in the government plan.
Although India’s government has played an active role in expanding and improving the country’s infrastructure, it is becoming increasingly difficult to keep up with not only rising demand for goods but also trying to keep pace with China. In order for the country to be successful, however, it must overcome bureaucratic issues such as delays in implementing programs and numerous regulations that impede the continuing economic success of the country.
Quelle: eyefortransport
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