With port activities gaining momentum, the same is throwing up huge investment opportunities in the country’s maritime sector  Entrepreneurs willing to invest big bucks, but unsure about a perfect option may soon find an answer to their query. According to a report jointly brought out by the Federation of Indian Chambers of Commerce and Industry (FICCI) and global advisory firm Ernst & Young, the country’s maritime sector offers huge opportunities for growth and investment. The report titled ‘The Indian ports and shipping sector: breaking boundaries, tapping potential’ states that the country’s ports are attracting interest of terminal operators, international liners as well as financial institutions and to tap the potential of the sector, the Indian government is promoting private sector participation.Positive initiatives undertaken by govt
Industry insiders believe that several positive initiatives undertaken by the Indian government have made the sector attractive and promoted growth opportunities. “Under the National Maritime Development Programme several port developmental projects have been initiated. With the number of ships calling at Indian ports increasing significantly, undertaking capacity expansion has become imperative. Investors should look to cash in on this opportunity to reap huge benefits in the long run,” comments Ms Madhubala, proprietor of Duropack, a mid-sized logistics firm in New Delhi.
Notably, till March 31, 2010, 50 projects at a whopping cost of Rs 5,717.28 crore have been completed, whereas 74 port projects worth Rs 18,502.68 crore are under progress. According to the Ministry of Shipping (MoS) data, as on August 1, 2010, 16 public-private partnership projects worth Rs 10,371.96 crore were under implementation. These port projects will not only enhance the existing capacity of ports but also attract huge investment.
Allied maritime business proving lucrative
Analysts also believe that allied maritime business like ship repairing, which is still at a nascent stage in India, holds enough potential for investors. The huge growth opportunities in this segment can be understood from the fact that India has just 35 ship-repairing units with the business being dominated by companies such as Hindustan Shipyard Ltd and Cochin Shipyard Ltd. Since the business is cyclical in nature and insulated from recession, the same is an attractive investment option.
According to Nageshwara Rao, managing director of Raghavendra Shipping Services, a mid-sized shipping firm in Visakhapatnam, “The Indian shipping sector has bore the burnt of poor connectivity in terms of road and rail network. Investment in these areas is of paramount importance, if India has to compete with her global counterparts.”
Corporatisation of ports to increase investment opportunities
With the government planning to corporatise the major port trusts in the country, which will give port authorities more autonomy in decision-making related to various port activities, greater investment opportunities will be promoted in the sector. The course of corporatisation has been initiated with the Jawaharlal Nehru Port Trust and other ports are soon likely to follow suit.
Need for world-class equipment for port operations is another area, which can be tapped. With international shipping lines setting up their operations in India, the domestic maritime sector is expected to grow by leaps and bounds in the coming months, thereby proving lucrative for investors.
Arup Choudhury |
