Union Steel Minister Chaudhary Birender Singh on Wednesday said coastal shipping being encouraged under the Sagarmala project would help reduce logistics cost incurred by steel and other major industries drastically.
He was speaking after flagging off the first consignment of 10,000 tonne of products of Rashtriya Ispat Nigam Limited (RINL) from the Visakhapatnam Port by coastal shipping.
Union Shipping Minister Nitin Gadkari participated in the ceremony via a video link.
RINL has entered into a ₹75-crore agreement to transport its products by coastal shipping for a year to its stockyards in Mumbai, Kochi, and Ahmedabad as a pilot project through Shreya Shipping and Logistics and Srivalli Shipping and Transport.
The maiden consignment was sent by the general cargo vessel, SSL Sabarimalai.
Terming the shipment of RINL products by coastal shipping as a momentous occasion, Mr. Singh said the steel industry could play a key role in automobile and shipbuilding sector. Ferrying their products by sea and inland water transport would be eco-friendly, fuel-efficient and cost-effective.
Stating that India had emerged as a key player in the global economy, he asked the steel industry to lay emphasis on exports to contribute more to the growth of the GDP and increase foreign exchange earnings.
He said India should emulate the success story of China and the Europe in making use of coastal shipping for slashing significantly the logistics cost.
He said, at present, the logistics cost in India was amongst the highest in the world, but the Sagarmala programme had the potential to unlock the full potential of India’s coastline and waterways and make the logistics sector competitive with the world standards.
Coastal shipping was cheaper than road or rail by 60-80% and would reduce the burden on rail and road transport. He observed that an overall cost saving of around ₹40,000 crore per annum was estimated from this project by 2025.
New era: Gadkari
Mr. Gadkari, in his address, said a new era had begun with RINL taking the lead in transporting its products by coastal shipping. He said while spending 18% of production cost on logistics it was only 8-10% in China and 12- 13% in the Europe. Coastal shipping would help save ₹200 to ₹300 per tonne of steel, he stated.
HRD Minister Ganta Srinivasa Rao, MPs K. Haribabu and M. Srinivasa Rao, RINL CMD P. Madhusudan, VPT Chairman M.T. Krishna Babu, and Additional Secretary of Steel Saraswathi Prasad were present.