Mismanagement of port activities and delay in implementation of port projects have resulted in inadequate utilisation of funds by Indian ports, thereby affecting the shipping sector’s growth plans While the Indian shipping sector is aiming to scale greater heights in the coming years, one of the major bottlenecks in its growth path is the under utilisation of funds allocated for various projects. According to a survey conducted by Shippingbiz360, a staggering 74% of the respondents felt that Indian ports are unable to utilise the funds allocated to them, while only 26% felt the opposite.
Declining fund utilisation graph
A glance at the fund utilisation graph over the last few years reflects that while there has been a considerable amount of increase in funds allocated for various port projects, the sector has been unable to utilise the same to the fullest. Fund utilisation rate stood at 69.27% in 2006-07, which tumbled down to 68.66% in 2007-08 and slumped further to 64.06% in 2008-09. The picture does not look bright even in 2009-10, with the rate standing at a mere 36.40% in the first 9 months ending on December 31, 2009.
 In this context, Sanjay Chauhan, managing director of Barbados Maritime Agencies Private Limited, a mid-sized shipping agency in Jamnagar, Gujarat says, “The situation is pretty alarming considering the role that the port sector plays in the country’s economy. Mismanagement of port activities acts as a major road block preventing ports to utilise the funds allocated to them.”
According to a report submitted by a committee that was appointed by the Planning Commission to prepare the blue print of the Tenth Five Year Plan, the Ministry of Shipping (MoS) was able to utilise only Rs 4,838.92 crore out of the allotted Rs 9,428 crore to the port sector in the Ninth Five Year plan.
The Planning Commission has taken the MoS to task several times for inadequate utilisation of allocated funds. “One needs to plan in advance as to how and where funds are to be invested. Currently, there is a huge gap between planning and implementation that results in unnecessary delay in port projects and wastage of money,” says M S Madhubala, proprietor of Duropack, a mid-sized logistics firm in New Delhi. Industry players believe that because of under utilisation of funds, several projects have to be carried forward to the next Five Year Plan period, which negatively impacts the target fixed for the ongoing Five Year Plan. Arup Choudhury |
