Karnataka’s port development frenzy ignores concerns of coastal communities
- Karnataka is keen to accelerate a port-driven development model, hoping to attract some private investment. It has one major port and 12 minor ports in different stages of development.
- Since 2014, the state government has been pursuing policies that facilitate the development of infrastructure and industry.
- The model carried by the port, however, ignores the people living near the proposed constructions. At least three ports currently under development have struggled in the face of community resistance.
Karnataka is on a port development frenzy. The 320 kilometer coastline, spread across three districts – Uttar Kannada, Udupi and Dakshin Kannada – is dotted with 12 minor ports and one major port, in various stages of development. A common complaint across this port development activity is that it ignores concerns raised by coastal communities who live close to the action – concerns about loss of coastal commons, loss of biodiversity and loss of livelihoods. subsistence.
While a major port is under the umbrella of the central government, smaller ports are controlled by state governments. A large port has deeper drafts allowing for large capesize ships, larger investments and higher tariffs. A minor port, in comparison, has lower rates.
Under the impulsion of Sagarmala, a national development initiative led by the central government port, Karnataka is keen to make every effort to create coastal infrastructure in the form of ports, railways and highways that connect the coast to the hinterland . Kapil Mohan, Additional Chief Secretary of Department of Infrastructure, Ports and Waterways Development of Karnataka and Chief Executive Officer (CEO) of Karnataka Maritime Board estimates that “the planned infrastructure development is expected to yield around Rs. 15,000 crore (Rs. 150 billion) in economic value added.
This growth is being driven by both Sagarmala, which is funded largely by the central government, and the state government, which also pumps in and encourages private investment largely through a public-private partnership model. . In a speech at a business and maritime conclave organized Karnataka Maritime Board, Federation of Karnataka Chamber of Commerce and State Bank of India on May 12, Karnataka Chief Minister Basavaraj Bommai said his government had proposed projects worth more than Rs 8,000 crore (Rs. 80 billion) to be developed under Sagarmala. The central government and the state government are led by the Bharatiya Janata Party (BJP). In November of this year, the state organizes a global investor summit to attract international investment.
Waterways are one of the cheapest modes of freight transport. The rate of freight transport by road is almost double in comparison. At present, about 87% of Indian freight either uses rail or road for freight transport, and water transport accounts for less than six percent. Industry insiders say better connectivity between ports through inland and coastal waterways is economically efficient. They also say port development would link hinterland industries to ports via a better road and rail network, leading to the idea of projected growth; infrastructure creating its own demand.
For example, Karnataka new industrial policy 2020-2025 focuses on growing the cement and steel sectors and increasing sugar exports, by building better infrastructure and logistics. The investor pitch document prepared by the Karnataka Maritime Board states that the state has a “well-developed industrial hinterland comprising 40 MTPA (million tonnes per annum) of cement capacity, 25 MTPA of iron and steel capacity, 10 GW (gigawatts) of thermal power plant installed”.
The investor document also seeks investments in captive ports. A captive port is built and developed by a private sector company for a specific purpose. For example, the Manki Harbor, in the Honnavar taluk of Uttar Kannada, is to be developed as a captive port by Renuka Sugars. The port of Pavinkurve, another village in Honnavar, should be built by JSW Group (Jindal South West) with an investment of Rs. 2,000 crore (Rs. 20 billion) to transport a cargo of 15 MTPA to their own steel plant in Vijayanagar, which is also being expanded by 12 MT to 18 MT. Kasarkod-Tonka Port, a third location in Uttar Kannada’s Honnavar taluk, will have a capacity of 5 MTPA when completed.
Port officials also say that amid port expansion efforts, Karwar Port in Uttar Kannada is expected to have a capacity of 4.5 MTPA compared to the current capacity of 3 MTPA. Old Mangalore Port is expected to increase from 1 MTPA to 2 MTPA.
What do these ports import and export, and do we really need that many ports? According to data obtained through the Right to Information Act, except for the port of Karwar, which imports rock phosphate, bitumen, HSD (High Speed Diesel), palm oil , industrial salt and caustic soda solution, and exports molasses and caustic soda, no other minor port has recorded an increase in its exports and imports in the past five years.
In fact, the ports of Tadadi, Honnavar, Manki, Pavinkurve, Bhatkal and Padubidri show no history of cargo handling, indicating that they are not commercial ports yet. The ports of Belekeri, Kundapura and Hangarkatta show no data on cargo handling after 2018. And the ports of Malpe and Old Mangalore show a decline in activity over the last five years.
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Create policies that facilitate “big” growth
Karnataka’s new industrial policy also aims to facilitate land acquisition, removing restrictions on land conversion and exempting industries from the Karnataka Land Reform Act 1961 through a series of amendments. It is geared towards export-led growth and production, based on high investments from private suppliers, both domestic and international. The ports and connecting infrastructure will allow it to export and import from within the state, and not depend on out-of-state ports.
In August 2013, the government of Karnataka notified new port limits for all minor ports in Karnataka, indicating the extent of the jurisdiction of the State Ports Department.
The Karnataka Minor Ports Development Policy 2014 aspires to develop commercial ports, increase their capacity to handle more cargo, decongest road traffic by providing facilities for passenger cabotage and cargo traffic, build more captive ports through a partnership model public-private (PPP) and to create facilities to handle at least 5 to 10% of the country’s freight. It also allows the state government to invest up to 11% in all PPP port projects and requires the state government to support land acquisition, even for private port projects. Furthermore, it aims to convert all fair weather (seasonal) ports to all weather ports.
In 2015, the state passed the Karnataka Maritime Board Act, which resulted in the formation of the Karnataka Maritime Board. Once created in 2018, the Council became the nodal agency to coordinate and implement port development policy, a job that initially belonged to the Directorate of Ports and River Transport. The board, according to policy, has authorized tenders for private investments, a function that is not possible for the State Department.
So far, out of the 12 minor ports and one major port, one is being developed under a public-private partnership between the state government and Honnavar Port Private Limited, two are expected to be developed as as private captive ports by the JSW Group and Renuka Sugars, and two were going up under the Sagarmala program, at Karwar and Tadadi. Due to resistance from coastal communities, the port of Karwar was blocked indefinitely and the port of Tadadi was denotified. The Rest are still at various stages of finalization or seeking investment.