INDIAN INFRASTRUCTURE SERIES – III : Sagarmala (Ports and Shipping)

Sagarmala Programme profoundly is to reduce logistics cost for EXIM and domestic trade with minimal infrastructure investment.

More than 400 projects, at an estimated infrastructure investment of more than INR. 8 Lac Crore for the Sagarmala project, have been identified across the areas of port modernization & new port development, port connectivity enhancement, port-linked industrialization and coastal community development.

The allocation of investment is as under:

S. No. Project Theme No. of Projects Project Cost

 (Rs. Cr)

1. Port Modernisation 189 142,828
 2. Connectivity Enhancement 170 230,576
3. Port-Linked Industrialisation 33 420,881
4. Coastal Community Development 23     4,216
  Total 415 798,500


Main Objectives:

  • Increase the volume of trade via inland waterways and coastal shipping
  • Develop maritime and manufacturing clusters around the ports – Develop 2–3 port-based smart cities and Coastal Economic Zones
  • Set up Sagarmala Development Company to enable project implementation


Water ways has been the most neglected mode for inland transportation in India. Due to lack of prerequisites being met such as lack of consistency in the water flow, insufficient water depth for the vessel to flow, lack of technological deployment of GPS for navigation, high maintenance cost, time consuming, government regulations, lack of investment, deterioration of vessels etc.



COST Higher cost Medium cost Low cost
TIME Less time consuming Less time consuming Very time consuming
VOLUME Smaller volumes Large volumes Medium/large volumes
SERVICES Door to door Partially door to door No door to door


WATERWAY Distance(km)
National Waterway 1 (Allahabad -Haldia stretch of Ganga -Bhagirathi-Hooghly river system) 1620
National Waterway 2 (Sadiya-Dhubri stretch of Brahmaputra river system) 891.09


National Waterway 3 (Kollam-Kottapuram stretch of West Coast Canal along with Champakara Canal and UdyogMandal Canal) 205

In order to make this a viable source of transportation and to utilize the resources India has to an optimum level Sagarmala was introduced by the Government of India.



CEZ State Linkage Port Potential Industries


Kandla, Mundra Petrochemicals, Cement, Furniture
CEZ-2 Pipavav, Sikka Apparel, Automotive
CEZ-3 Dahej, Hazira Marine clusters
CEZ-4 Maharashtra &


JNPT, Mumbai Power, Electronics, Apparel
CEZ-5 Dighi, Jaigarh, Mormugao Refining, Steel, Food processing
CEZ-6 Karnataka New Mangalore Petrochemicals
CEZ-7 Kerala Cochin Furniture
CEZ-8 Tamil Nadu VOCPT


Apparel, Refining
CEZ-9 Karaikal Leather processing, Power
CEZ-10 Chennai, Kamarajar (Ennore) and Katupalli Steel, Petrochemicals, Electronics, Shipbuilding
CEZ-11 Andhra Pradesh Krishnapatnam Electronics
CEZ-12 Vizag, Kakinada Food processing, Petrochemicals, Cement, Apparel
CEZ-13 Odisha Paradip, Dhamra Petrochemicals, Marine processing
CEZ-14 West Bengal Kolkata, Haldia Leather processing



  • India’s waterways are underdeveloped. Its share of overall cargo transport remains abysmally low: 0.4% compared to 42% in Netherlands, 8.7% in China and 8% in the US
  • To develop inland waterway transport by using power efficiency as in how much weight of cargo one horsepower engine can move. It is 150 kg for trucks on road, 500 kg for railway and 4,000 kg for inland water transport
  • The country has over 14,500 kilometers of inland waterways — comprising rivers, lakes, canals, creeks and backwaters. Implementation of this scheme will lead to proper utilization.
  • Promoting waterways will reduce pressure on other already congested and more expensive modes of transport


  • In terms of energy, inland shipping consumes 230 mega joules/1000 tonne-km while rail transport consumes double that 430 mega joules and truck a further double of that 920 mega joules.
  • Transport of bulk goods such as coal, grains, iron ore, construction material etc. over an entire regions such as the Ganga or the Brahmaputra basin made easier and cheaper.
  • It can reduce the cost of construction material such as steel, cement up to 30% of its cost as that is the proportion of logistics cost in operational cost.
  • It can help in funding the deficit of a resource at a particular state with the surplus of a resource in another state through  Inland water ways , for instance cement demand in the limestone deficient coastal states is expected to grow to 190 million tonnes in 2025 from 86 million tonnes. This can be met by demand through hinterland plants located close to limestone resources.
  • Coastal steel plants provide logistics cost saving of INR 1,000 per tonne.
  • Two new proposed steel clusters (40 MTPA capacity) could annually save the economy INR 3,500 cr
  • Coastal shipping volumes could grow to 5 times of current levels to about 330 million to 420 million tonnes by 2025.


S.No. New Port Location State Present Status
1. Sagar Island West Bengal Approval obtained for setting up Major Port at Sagar Island. DPR* prepared. Viability being re-examined in view of announcement of new port at Tajpur by State Govt. of West Bengal.
2. ParadipOuter Harbour Odisha Detailed Project Reports under preparation.
3. Sirkhazi Tamil Nadu Techno Economic Feasibility Report (TEFR) prepared.
4. Enayam Tamil Nadu In principle approval obtained for setting up Major Port at Enayam. DPR under preparation.
5. Belikeri Karnataka Techno Economic Feasibility Report (TEFR) prepared.
6. Vadhavan Maharashtra DPR under preparation.

*Detailed Project Report


Sagarmala project is still at initial stage so it’s a little early to pick any sector or companies that will benefit from the project.  Never the less the benefit will be reaped by companies dealing in raw materials or bulk products such as coal primarily by saving logistics cost for instance Cement shipping charges are INR 0.15 per tones km compared to INR 3 per tones km and INR 1.5 per tonne km by road and rail, costal shipping of coal is INR 0.20 per tonne km which is lesser than the cost of rail and road, INR 1.2 and 1.5 per tonne km which will result in Savings from coastal shipping of coal – INR 17,000 to 18,000 Cr Savings from coastal shipping of steel, cement, food grains and fertilizers – INR 11,500 to 13,500 Cr Savings from modal shift and time and variability reduction of containers -INR 7,000 to 9,000 Cr

This project will boost export by USD 110 million, create 40 lakh new direct jobs and 60 lakh indirect jobs and will mobilize investment. It is imperative that the scheme is put into action in order to gauge the benefiting sector or company. However the shipping sector is a no-brainer.

This study is to give the reader an unbiased preliminary viewpoint for this programs implementation benefit. There will be further follow ups to this.

– Report by Aditi Seth