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Coastal shipping: A much needed boost

Countries are adopting freight modal shift plans by offering financial incentives to transporters for switching the shipping method from truck to rail or water.

Published: September 2, 2015 3:22:20 am

Despite a coastline of 7,500 kilometres, coastal shipping plays an almost insignificant role in the country’s transportation network, ferrying less that 200 million tonnes of cargo — a paltry 7 per cent share of the overall local cargo movement in the country. To change this, the Centre is mulling a scheme to promote this shipping.

146 is the number of coastal vessels which can carry cargo, despite the country having around 805 of them and a vast coastline. China has about 12,000 vessels that ferry an estimated 1 billion tonnes of coal, steel, grains and fertilisers a year.

Countries are adopting freight modal shift plans by offering financial incentives to transporters for switching the shipping method from truck to rail or water. Most comprehensive one being the Marco Polo Programme of the EU, which offers funding for projects that shift freight transportation away from the roads and has a budget of Euro 450 million.

The Ministry of Shipping, road transport and highway plans to increase the share of coastal shipping in modal cargo mix to 10 per cent by 2019-20 and to promote cruise tourism leading to development of coastal regions. It has prepared a vision for Coastal Shipping, Tourism and Regional Development in consultation with stakeholders along with an action plan to achieve the objectives.

Rs 3 cr is the corpus (to be enhanced to Rs 300 crore) set up by Kerala government for coastal shipping promotion fund. The state provides an incentive of Re 1 per tonne per km on cargo moving along the 540 km-long coastline of Kerala.

0.5/tonne/km is the subsidy on bulk cargo, according to the Centre’s plan for promoting coastal shipping. A rebate of Rs 2,000 a container for container cargo and an additional 20 per cent rebate on vessel/cargo-related charges would also be offered. The subsidy would directly go to shippers of general cargo items like salt, sugar, automobiles, fertilisers, tiles, steel, cement, marble and foodgrains.

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