Centre pegs investment under Sagarmala at Rs. 3 trillion during 2018-19, expects to add projects worth Rs. 1.1 trillion in a year

Setting a higher goal for 2018-19, Ministry of Shipping expects to touch Rs 3 trillion mark as an investment target under Sagarmala, completing projects worth Rs. 30,000 crore this financial year. It will be up from Rs. 10,060 crore worth projects in the previous fiscal.

“In the first year (2015-16) itself, we touched an investment level of Rs. 80,000 crore under Sagarmala. This was approximately Rs. 1.37 lakh crore during 2016-17. The cumulative investment touched Rs. 2.17 lakh crore during 2017-18 and now the target has been raised further to Rs. 3 lakh crore for 2018-19. The work has already reached close to Rs. 2.6 lakh crore… And we expect to invest Rs. eight lakh crore by 2020 itself,” an official privy to the matter told Moneycontrol.

Union minister for Shipping, Nitin Gadkari, started Centre’s flagship programme for the development of ports and coastal areas, Sagarmala, in 2015 to exploit 7,500 kilometer long coastline of the country. The programme focuses on port development and modernisation, port connectivity, port-led industrialisation and development of coastal community development.

The programme is envisaged to span across two decades, between 2015 and 2035, and is worth Rs eight lakh crore. With a total of 415 projects under its domain, the programme plans to reduce logistics cost for transporting bulk commodities, improving export competitiveness and optimising time/cost of export-import container movement.

“Roughly, we are expecting that we will be completing projects worth about Rs 30,000 crore and we will be awarding projects worth Rs. 80,000 crore during 2018-19,” another senior government official told Moneycontrol.

Sources from the ministry said that projects worth Rs. 23,854 crore were awarded last fiscal while projects worth Rs. 10,060 crore were completed.  About 100 projects are targeted to be completed during the current year, while about 180 projects will be awarded.

Officials supervising Sagarmala said on condition of anonymity that numerous projects are at various levels of implementation.

“Sagarmala is a huge programme… For instance, on national scale, there are 79 road connectivity projects where all the DPR have been done… some of the projects are being executed… Similarly, 49 railway projects are being done… Of these, 21 are being done by Indian Railways and others are being done by Indian Port Rail Corporation… In addition to that, projects are being done for port modernisation… there is a complete master plan… And not just port modernisation, we have coastal economic zones,” said the official.

Data on the Centre’s website shows that it plans to undertake 189 projects for port modernisation, 170 projects for port connectivity enhancement, 33 projects for port-linked industrialisation and 23 projects for coastal community development.

A recent report by ICRA Limited, however, pointed out that fund mobilisation is “likely to remain a challenge” for the government for executing Sagarmala.

“ICRA Research believes that given the modest budgetary support of Rs. 6 billion (Rs. 600 crore) for Sagarmala project for the year, there continues to be significant challenges in terms of mobilisation of funding especially towards the other two pillars of Sagarmala - Development of industrial clusters and coastal communities, where progress has been limited,” Mr. K Ravichandran, senior vice president and group head, ICRA noted in the report.

Defending the allocation, the official said that the programme has various layers of funding and that the budgetary support is a “miniscule part” of funds.

“Major chunk of funds (for the programme) is either through ports or National Highways Authority of India (for port connectivity through roads) or ministry of railways or road transport ministry or other state government,” said the official adding, “So, this Sagarmala fund allotment is confined to a limited segment of the entire programme”.

“Sagarmala is Rs. 8 lakh crore programme. So, when you talk about this allotment of Rs. 600 crore, it is only confined to a very limited segment of the entire programme because various funding mechanisms are available for different schemes. So, this Rs. 600 crore only takes care of the coastal berths, fishing harbours for the community or some new innovative projects and training of the people for maritime related activities. So, only these activities are funded through this fund, rest are taken care by respective port authorities, state governments et cetera”.