New Delhi, May 4 (UNI) In the wake of high transit time and soaring logistics cost, India needs to focus on infrastructure development, facilitate trade through IT services, and promote competition through privatisation, to make the port and shipping sector globally competitive.
According to a FICCI-Ernst and Young (E&Y) paper on Transforming Indian ports into world-class facilities, the country's port and shipping sector, which is having a high capacity utilisation of over 90 per cent, is being bogged down by congestion due to high transit time, soaring logistics cost, inadequate flow of investments, small size of vessels and inadequate consolidation in the liner and terminal operator industry.
Indian ports are grappling with low productivity compared with world-class ports such as Singapore.
The time taken for clearing import cargo in Singapore is one-seventh of the time taken in India, while in terms of railway costs Indian shippers incur 7.9 cents per km against Canadian railway cost of two cents.
Besides, the logistics costs in the country accounted for 13 per cent of GDP on account of poor logistics infrastructure at ports, it said today.
In its suggestions, the study noted that to ensure well-planned capacity overhaul of ports, issues relating to land acquisition, reclamation and other delays would need to be tackled effectively.
Apart from physical infrastructure, there is a dire need to employ improved systems and trade facilitation measures in ports in order to increase capacity through reduced turnaround times of vessels and evacuation of cargo by better planning.
ICT solutions and other value-added services are also proven tools for trade facilitation through ports and these should be deployed in right earnest, it suggested.
IT solutions are highly effective for activities such as effective cargo distribution systems and quick processing and proactive supervision on the workflow management.
The study pointed out that privatisation is imminent to enhance port capacities and performance and the new 'Model Concession Agreement' should be implemented to ensure maximum private participation.
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