u2 March 2019 MEDC Economic Digest MEDC Governing Board From the President’s Desk

MEDC President: Dear Members, Mr. Ravindra Boratkar Managing Director, MM Activ It is with great pleasure that I invite all Sci - Tech Communications Pvt. Ltd. of you to join us for the nation's first MEDC Vice Presidents : ever conclave on the blue economy of Mrs. Meenal Mohadikar India, which will be held from February CEO, Anand Trade Development 26 to 28, 2019 in Navi Mumbai. This Service mega-event is being jointly hosted by Mr. Chandrakant Sadadekar the MEDC and the Federation of Indian Chambers of Chairman, Commerce (FICCI) under the leadership of Shri Nitin Gadkari, Sadadekar Global Group Hon'ble Union Minister for Shipping and Water Resources, and Export-Import Shri Devendra Fadnavis, Hon'ble Chief Minister of Mr. Mukund Kulkarni Maharashtra, with the sole intent of promoting awareness about Director, Expert Global Solutions the massive latent potential of the blue economy. Pvt. Ltd. Both the state and central governments are playing an important MEDC Immediate Past-Presidents: role in the development of the blue economy. As you are Cdr. Dipak Naik probably aware, in the recent Budget, the government proposed President & CEO, Naik Environment to create a separate department for Fisheries and provide a 2% Research Institute Ltd. (NERIL) interest subvention on loans to fish farmers. This move is likely to boost seafood export and it forms an integral part of the Mr. Nandkishor Kagliwal Chairman, Nath Group growth strategy for the blue sector. Shri Gadkari has said that the blue economy is a critical component of India's economic development agenda, and his actions have always backed his words. He is responsible for promoting blue growth through various innovative initiatives like the development of port Printed, Published & Edited by infrastructure, inland waterways, the starting of cruise terminals, Ms. Ananya Prem Nath on behalf of and the ambitious Sagarmala project which is poised to Maharashtra Economic revolutionize maritime logistics and port-led development in Development Council (MEDC) and India. Shri Fadnavis has laid emphasis on an integrated Printed at Onlooker Press, 16, development of minor ports in Maharashtra along with Sassoon Dock, Colaba, providing impetus for promoting industries along its 720 km Mumbai - 400 005 and Published coastline. The Maharashtra Maritime Board is also planning to from Maharashtra Economic invest on the development of some minor port sites depending Developement Council, Y. B. Chavan Centre, 3rd Floor, Gen. J. Bhosale on the traffic flow.This will provide the opportunity for balanced Marg, Nariman Point, development along the coast, since these ports stretch all the way Mumbai - 400 021. from the northern to the southern part of the state. All these are welcome signs of the importance the government is now attaching to nurturing the blue economy.

MEDC Economic Digest March 2019 u3 Maharashtra has a long coastline and the blue economy approach anticipates and incorporates the effect of climate change on marine and coastal ecosystems. Climate change is a serious issue to tackle, especially in the coastal areas. Thanks to scientific advancements, the understanding of these unpredictable impacts is constantly improving and, in the long run, it will prove to be of particular benefit to the large fishing community of Maharashtra, which continues to depend on the weather and the sea-levels for deciding the best time for their professional activities. It will also educate and sensitize them regarding the impact of their industry on the fragile marine and coastal ecosystems. Realizing the full potential of the blue economy requires the effective inclusion and active participation of many diverse social groups, including women, youth, local communities, indigenous tribes, and marginalized or underrepresented people. In this context, much of traditional knowledge and local practices can also provide culturally appropriate approaches for promoting blue growth while simultaneously supporting improved governance. I am proud to say that amongst all coastal states, it is Maharashtra that is taking the lead in blue economy initiatives. I look forward to your proactive participation in this conclave, which will enrich it considerably.

u4 March 2019 MEDC Economic Digest FTPROM HE RESIDENT ’D03 S ESK

llSFPECIAL EATURE

Norway - India Blue Economic Relations 7

llCSOVER TORY

Vol.I No.7 March 2019 Vol.I Number of Total Cargo Percentage of Percentage of Estimated number Estimated total Securing India's Maritime Interests Vessels which handled in total cargo total cargo of vessels which number of vessels sailed out from Indian Ports handled by major handled by sailed out of non - which sailed out and Harnessing the Blue Economy Major Ports ports other ports major port based of Indian ports - Admr. R. K. Dhowan, on cargo handled

Chairman, NMF 11 21500 1100 57% 43% 16000 37500 Million MT Table 1: Estimation of Vessels which sailed out of Indian Ports in 2016-2017

Source: Basic Port Statistics of India, 2016 -2017; Transport Research Wing, Ministry of Shipping, GOI; http://shipmin.gov.in/showfile.php?lid=2687 Blue Economy and Indian Maritime Landscape - Dr. Malini Shankar 17

Maritime Capacity Building : A Blue Economy Imperative for India - Commodore Anil Jai Singh 26

A BLUE BREXIT - Harnessing the Blue Economy in times of radical socio-political change - Mr. Mihir Joshi 34

Canal Navigation Article -4Cdr. Dipak Naik 2

ONTEGas Hydrates: T Promising s s Surplus producon Unconventional Energy Resource (Natural capital) (Benefits to business & society) (Provisioning services) Of The Coastal Environment. - Dr. N. Satyavani 49

CN

MEDC Economic Digest March 2019 u5 Blue economy opportunities from marine capture fisheries - Dr. E. Vivekanandan 54

Mariculture: a sustainable and lucrative alternative for open access fishery - Dr. Kiran Kumar R Patil 62

OTEC-Desalination Using LTTD: A Sustainable Option - Cdr (Dr) Nitin Agarwala 66

Participatory Approaches to Water Management MEDC Economic Digest - Mr. S. N. Patankar 75 Editorial Board Interim Chairman World Bank – Blue Bond 82 Mr. Ravindra Boratkar

Editor Development of Ports in India - New Ms. Ananya Prem Nath Initiatives for capacity additions and Senior Manager - Research & Training Improving operational efficiency - Dr. S D Naik 84 Editorial Advisers:

Cdr. Dipak Naik, Immediate Past President, MEDC

Dr. Prakash Hebalkar, President, ProfiTech

Dr. Dhananjay Samant, Chief Economic Adviser, MEDC

Address: MEDC Research Centre, 3rd Floor, Y.B. Chavan Centre, Nariman Point, Mumbai - 400 021. Tel.: +91 22 2284 2206/09 Fax : 22846394 Email: [email protected] Website: www.medcindia.com u6 March 2019 MEDC Economic Digest Special Feature

Norway - India Blue Economic Relations Norwegian Consulate General, Mumbai [email protected]

The ocean-based industries promoting cooperation in the - Life below water, was in could outperform the growth development of blue economy. January 2018 initiated by the rate of the global economy by The visit also served to Norwegian prime minister the end of 2030 (OECD, 2018). promote shared efforts to (Norwegian Government, The blue economy is expected achieve the green transition and 2018a). Norway will host the to play a central role in creating work towards realizing annual international “Our a sustainable world economy sustainable development goals. Oceans Conference” in with enough food and energy PM Solberg was accompanied October 2019. by a large business delegation for the world's growing Emerging India population. However, the of Norwegian companies resources of the ocean must be which signed a number of India's economy is emerging at managed in a sustainable MoUs with Indian partners astonishing rates. The growth manner. within the blue economy space has mainly come from land- in areas such as sustainable based activities even though The Prime Minister's Visit coastal transport, ship vast opportunities and recycling, renewable energy, potential lie in the surrounding offshore wind and LNG oceans. The Indian Ocean is a supplies to name a few. source of food and energy for The sea nation Norway India's growing population. Norway is a sea nation, with Blue economic relations large parts of its economy Norway's global commitment stemming from ocean sectors. to the oceans also attests to Norwegian Prime Minister As the oceans are all connected, Erna Solberg paid an official Norway's interests in creating global and regional cooperation visit to India from 7-9 January, lasting blue relations with India. is essential to assure sustainable 2019 at the invitation of Indian During the Stockholm Summit use of the ocean resources. It is Prime Minister Mr Narendra in April 2018, the Prime in Norway's interests to help Modi. The meeting between Minister of India and Norway, facilitate sustainable ocean PM Solberg and PM Modi in Narendra Modi and Erna based growth globally New Delhi was between two Solberg, showed interest in leaders of maritime nations. (Norwegian Ministry of increased cooperation between The highlight of PM Solberg's Foreign affairs, 2017). the countries. Reaching the visit was the signing of a An international high-level Sustainable Development memorandum of panel with the aim of providing Goals through clean understanding (MoU) on an concrete contributions to technology was an important “ocean dialogue" between the achieve the Sustainable topic during their discussions, two countries aimed at Development Goal number 14 and building blue economies

MEDC Economic Digest March 2019 u7 Special Feature

Team Norway: role in creating blue economic clusters where Ship owners, relations between our manufacturers, logistics countries. companies, researchers, Offshore oil and gas financial institutes, national and local authorities works closely It will take time before together in a demanding sustainable alternatives to internal market. From this petroleum are fully developed, stems advanced technology and in the meantime it is and innovation. (Norway important to make sure that the export, 2003) extraction and processing of offshore petroleum is done as Alongside the increased need sustainably as possible. The for a more sustainable maritime industry carries large risks of oil sector Norway has become one and gas spills, but through high of the pioneers in the standards and thorough development of liquefied regulations, as well as the use of natural gas (LNG), electric and advanced technology, this can hydrogen ships as well as be minimized. carbon-storing technologies. There has been interest The Norwegian ship industry expressed in a cooperation has, according to the through for example, greener between India and Norway on Norwegian Shipowners maritime solutions and improving safety and health Association (2018), the highest renewable energy are standards in the Indian potential of building climate important elements in offshore oil and gas sector friendly and energy efficient achieving this (Norwegian (Team Norway, 2018). This ships. Government, 2018b). could also be an opportunity to A business survey on the Opportunities reduce the risk of damages to Norwegian maritime marine life from offshore oil Team Norway is working companies has provided a and gas. actively to promote sustainable background for increased maritime development and Maritime understand of the opportunities and challenges blue economic relations with Through time, Norway has India. these companies have in the developed advanced maritime Indian market (Team Norway, Several Norwegian businesses are working on activities related to the blue economy in India. Norway's maritime presence in India is especially strong. Traditionally, Indian seamen have been sailing Norwegian ships all over the world. Now, Indian digital competencies will likely play an important u8 March 2019 MEDC Economic Digest Special Feature

2016). The participants believe Kongsberg Maritime, all known market and has several projects that the maritime sector will for their advanced technology underway in the recycling grow in the next 5 years and are and long experience in the field. segment. Furthermore, positive about the steps the Renewable energy SINTEF, a Norwegian research Indian government has taken institution, is working actively to develop the maritime sector, The rapid economic growth of in the sector of recycling and specifically within sustainable India has considerably waste management of C&D shipping. increased the demand for waste in the west of India. energy. Assuring sustainability Furthermore, they believe that of our energy sources is crucial Research and Higher there will be a shift to LNG due for continued development. Education to its environmental and Norway's long experience in Opportunities for increased economic benefits, however research collaborations are amongst the challenges offshore installations has given Norwegian companies an continuously presenting reported in the survey are the themselves. lack of infrastructure and advantage in implementing supply constraints for further renewable offshore energy A Norwegian research project development of LNG in India. installations. The Norwegian called REV Ocean has built the The surveyed companies, company DNV found offshore world's largest high tech however, do believe that wind to be a feasible energy research and expedition vessel cooperation between Norway source in the west of India with the aim of searching for and India in the LNG sector (Berghäll, 2018). Norway's more sustainable and will be profitable, especially highest valued company, environmentally responsible when it comes to supplying Equnior, is showing interest in solutions for the ocean equipment. Norwegian offshore wind energy in India, economy (REV Ocean, 2018). companies see shipbuilding, and is planning to gradually The leaders of this initiative repair and recycling as sectors enter the Indian energy market have shown specific interest in with major opportunities. (Vaidya, 2018). highly qualified Indian (Team Norway, 2016) Waste management scientists to join the vessel. The development of an Waste management is an environmental friendly ship- important part of a blue breaking sector in India will economy. Tons of plastic and increase the opportunities for other pollutants end up in the ship recycling of Norwegian oceans every year. Curbing this owned ships in India and build means healthier oceans and stronger blue economic preserved ocean opportunities relations between the two for the future generations. Furthermore, Norwegian and nations. Indian universities are looking Norway recycles large parts of Some Norwegian companies to strengthen their ties, and the its waste through advanced topic of sustainable developing such new waste management facilities technologies are already management has arisen with and incinerators. A prominent specific interest. present in India. Amongst Norwegian company in this these are Wilhelmsen, DNV regard is Tomra. This company The Prime Minister's “Science Maritime, Wallem and has shown interest in the Indian Technology and Innovation

MEDC Economic Digest March 2019 u9 Special Feature

Council” in India is currently between the countries in 2021–2022. (www.regjeringen.no) exploring the opportunities of competencies and economic Norwegian Government (2018b). launching deep ocean research structure create the Norway establishes international projects (The week, 2018). opportunity to draw upon each high-level panel on sustainable ocean Ocean mining might be other's qualities. Through economy. (www.regjeringen.no) essential for extracting the research collaborations, metals needed in the future Norway and India can together Norwegian Ministry of Foreign (Chaitanya, 2018). The find sustainable ways of affairs (2017). The place of the knowledge carried between the utilizing the oceans. Moreover, oceans in Norway's foreign and two nations in deep water creating business ties will development policy. White Paper, activities and ocean related facilitate the creation of Medl. St. 22. space research might, if synergies. Combining Norway's Norwegian Shipowners combined, assure a sustainable ocean related experience and Association (2018). Tenk hav. development in the field of advanced technologies with Konjunkturrapport. ocean mining. India's digital competencies OECD. (2018). The Ocean The highly professional and and growing market potential should facilitate the Economy in 2030. OECD modern academics knowledge publishing, Paris. and research skills in India are development of bluer sought after partners for economies in both countries. REV Ocean (2018, September 6). collaborations. Joint research Written by The Royal REV Ocean. (www.revocean.org) and education between Norwegian Consulate General Team Norway (2016). Business Norway and India on the topics Mumbai. climate survey 2016. of sustainability might come to Author: Fredrik Ruud Team Norway (2018). Norwegian benefit the larger world Kondrup. commune. Business in India. Contributions from The Royal Digitalization Vaidya, K. (2018). Equinor Norwegian Embassy New looking to work with ONGC on India is a central provider of IT Delhi and Innovation Norway various projects, says Erik Haaland. services to the Norwegian India. DNA India. (www.dnaindia.com) economy. Digitalization will Bibliography inevitably be an important part Chaitanya, G. (2018). Ocean of both nations' blue economic Berghäll A. (2018) DNV GL Industry 4.0. Gateway House. development. Collaboration partners with the EU and (www.gatewayhouse.in) Government of India to bring between the nations in creating The week. (2018). Prime Minister's offshore wind to the Indian market. new ocean solutions will have Science Technology and Innovation (www.dnvgl.com) the opportunity to draw upon Council Sets Directions from India's digital competence and Maritime gateway (2018). The big Fundamental Research to Norway's long ocean fat prospect. August 2018. Commercialization in India. experiences. Norway export (2003). Norway's (www.theweek.in) Joining hands Maritime Cluster. Norway and India are both (www.norwayexports.no) engaged in building sustainable Norwegian Government (2018a). economies. The differences Norway for the UN security council u10 March 2019 MEDC Economic Digest Cover Story

Securing India's Maritime Interests And Harnessing The Blue Economy Admiral R.K. Dhowan (Retd.), PVSM, AVSM, YSM Chairman National Maritime Foundation and Former Chief of the Naval Staff, Indian Navy [email protected] 1. India is essentially a largest GDP in the world till only post-independence in the maritime nation with a glorious around 1500 AD, with China latter part of the 20th century. maritime heritage, and the being its closest competitor and 5. Today, India occupies a Indian seaboard has been the India and China together dominant position in the vortex of intense maritime accounted for more than 50% Indian Ocean, as the country activity over centuries. The of the world's GDP. sits astride busy sea lines of Indus valley civilisation which 3. The British period in India communication, which transit existed in the Western part of was also a period of extensive across the Indian Ocean, over the country dates back to shipbuilding activity. which nearly 1,20,000 ships 3300BC and even today we Commencing 1753, and over transit every year carrying 66% have a dry dock at Lothal in the next hundred years, of the world's oil, 50% of the Gujarat which dates back to Bombay Dockyard built about world's container traffic and 33 2200 BC. It is from these small 144 merchant ships and 115 war % of the world's cargo traffic. ports that ancient seafarers vessels, including 84 gunships sailed off to distant lands in 6. Our blue planet, the Earth for the Royal Navy. The oldest has a dominance of the Mesopotamia, ancient Egypt warship afloat in the world and East coast of Africa. maritime domain with over today, HMS Trincomalee, 70% of the Earth's surface Kautiliya'sArthashastra makes a which is now berthed in mention of the 'Nav Parishad' covered by water, nearly 80% Hartlepool in UK, was built in of the world population living during the Mauryan Empire India. The national anthem of which is akin to the Admiralty within 200 nautical miles from United States of America was the coast and about 90% of the Board for monitoring maritime written by Francis Key in issues. world's trade transiting by sea. Baltimore, on board the ship Oceans are central to life on 2. On the East and South coast HMS Minden which was built earth. They are rich in oil and of India, we had the seafaring in the Bombay Docks. The mineral resources; they are kingdoms of the Kalingas, treaty of Nanking ceding Hong suppliers of oxygen, absorbers Cholas, Pandyas and the Cheras Kong to the British was signed of carbon-di-oxide, a virtual who sailed off to distant onboard another famous heat sink, rich in bio-diversity countries in South East Asia warship HMS Cornwallis, and have emerged as the global and even today we can see which was also built in India. economic highways for transit glimpses of India's cultural 4. Regrettably, when the of trade. With depletion of heritage in these countries. transition took place from 'sail resources on land, humankind India's maritime capabilities to steam' and 'wood to steel', has turned towards the seas for also made it an economically India was left behind as she was resources and there is a powerful country. As not part of the industrial misperception that oceans are documented by the historian revolution. The revival of our an unending resource base and Angus Madison, India had the maritime capabilities took place are an infinite sink. Nothing

MEDC Economic Digest March 2019 u11 Cover Story could be further away from 9. India has vast maritime development. Sagarmala reality. Over the past few interests, which have a vital actually comprises over 150 decades, we are witnessing relationship with the nation's integrated projects, including pollution of the seas and economic growth. In recent Greenfield infrastructure contamination of the natural years, under the leadership of projects, with a planned marine habitat, resulting in an Honourable Prime Minister investment of about 60-70 adverse impact of climate Shri Narendra Modi, there have billion US Dollars. change on the oceans. Studies been series of much needed Development of greenfield have indicated that almost 80% initiatives and intense activity in Port Infrastructure could be an of the pollutants in the seas the maritime domain, coupled area of maritime cooperation emanate from land and if the with the transition from 'Look which will also generate current rate of pollution East' to the 'Act East' policy. substantial employment in the continues, in a few decades we These initiatives will act as maritime sector. will have more plastic in the catalysts to strengthen the 11. India currently has about oceans than fish. growth of India as a credible 14,500 kms of navigable inland 7.Theconceptof'Blue maritime power. India's vast waterways and in the first Economy' has emerged as the maritime interests are also phase, the government is new paradigm and harnessing enablers of our Blue Economy. developing 4,500 kms as five the same could be interpreted The entire span of maritime major national waterways. as economic development of sectors are likely to witness Currently, 94% of freight in our maritime interests by significant growth in the India moves by road or rail and efficient utilisation of marine coming years, and will also development of inland resources with minimum serve as avenues for harnessing waterways will enhance impact on the environment and the Blue Economy and transportation over water, ensuring sustainable maritime cooperation with which is cheaper (economical), development of the oceans. other neighbouring countries. faster and cleaner. The planned 8. India has a unique maritime 10. India has 12 major ports development of additional disposition with a natural and 200 non major ports. The Inland Waterways presents a outflow towards the seas with port handling capacity of these huge opportunity for our island territories of ports which currently stands at investment and growth in India. Andaman and Nicobar Islands approximately 1500 million 12. The mercantile marine and in the Bay of Bengal and metric tons per annum is likely shipping industry is also Lakshadweep Islands in the to increase to 2500 million envisaged to grow in the near Arabian Sea, as the virtual metric tons per annum over the future. India currently has a extended arms of India. India next ten years. The merchant ship fleet of has a coastline of 7516 kms Government of India has approximately 1391 ships flying and an Exclusive Economic launched the ambitious the Indian flag. While over 90% Zone of over 2 million square Sagarmala project, which is a of India's trade by volume kilometers. Approximately, port-led development initiative transits by sea, the share of 95% of India's trade by volume based on pillars of port Indian shipping in India's and 77% by value transits by modernisation, connectivity, foreign external trade has seas and foreign trade accounts port-led industrialisation and declined from about 30% in the for over 30% of India's GDP. coastal community 1980s to approximately 7% u12 March 2019 MEDC Economic Digest Cover Story today. To enable India's designers have designed and and fishing boats operating in growing foreign trade to be our indigenous shipyards have coastal waters. There exists a carried on Indian hulls; the built ships for the Indian Navy huge potential for growth in the Indian Government is resulting in our transformation fishing sector by undertaking providing incentives for Indian from buyers Navy to builders deep sea fishing, increasing the registered shipping and has Navy. Today, it is a matter of size and numbers of current initiated measures to increase great pride that nearly 40 ships fishing fleet and enhancing the the tonnage of 'Indian and submarines under support infrastructure for Controlled Shipping'. construction are being built in stowage, processing and 13. India has a vibrant Indian shipyards both public transporting the catch. shipbuilding and warship and private. These range from Sustainable deep sea fishing is building industry with 27 aircraft carrier to frigates, another avenue where India shipyards. Recently, the destroyers and submarines. It is could cooperate to harness the Government of India has given our endeavor to progressively Blue Economy. The a major boost to the increase the indigenous content Government has promulgated shipbuilding industry by so that future warships and the National Policy on Marine according it special submarines are 100% Made in Fisheries 2017. This would result infrastructure status and India. in coastal community permitting 100% Foreign 15. The fishing industry is development and enhanced Direct Investment (FDI) in another sector which provides employment opportunities in shipbuilding. Joint venture significant opportunities for the fishing sector. partnerships between growth. India has 17. India has over 1300 Islands shipyards could be avenues for approximately 2, 50,000 fishing and Islets as part of the future maritime cooperation, boats, with 4 million active Andaman and Nicobar Islands and enhancing employment fishermen and 14 million and the Lakshadweep group opportunities in the people as part of the fishing and Islands off the West and shipbuilding sector. It should community. The annual marine East Coast of India. The be our endeavor to fish landings in India are about Government has prepared a progressively build ships in 11.41 million tons which comprehensive plan for the accordance with the Energy accounts for approximately development of the islands, Efficiency Design Index 5.3% of the world's which takes into account (EEDI) and propelled by production. The sector aspects of security, economic environmentally friendly fuel. contributes around 7 billion sustenance, environmental 14. The warship building USD to India's foreign preservation, social and industry in India is firmly exchange earnings and has a cultural sustenance. This anchored on self-reliance and potential to grow much more. development of the islands will indigenization. The Indian 16. However, this is only ensure green field Navy set up its naval design scratching the surface of the infrastructure projects with directorate in 1964. India built vast potential of the fishing minimum carbon footprint and its first indigenous naval industry in India which is opportunities for controlled warship, a patrol vessel INS largely coastal in nature, with eco-tourism. Opening of the Ajay in 1961 at Garden Reach logistic and maintenance maritime tourism sector could Shipyard in Kolkata. Over the support being provided by open up a host of past 50 years our naval local, small-scale enterprises opportunities in the future, for

MEDC Economic Digest March 2019 u13 Cover Story development of marinas and use of oceans, seas and marine natural disasters and the Navy cruise tourism. resources. Towards this, India and the Coast Guard, have to be 18. India's EEZ also provides has submitted its voluntary ready for rapid response to offshore energy resources and national review report to the provide humanitarian we have oil and gas exploration UN, on the implementation of assistance and disaster relief. Sustainable Development areas off the West and East 23. The instabilities and Goals (SDG) in July 2017. A coast of India. India has also turbulence on land in some been allocated deep sea bed clear agenda has been formulated for promoting the parts of the Indian Ocean have mining areas in the Central the potential to spill over into Indian Ocean and these sectors 'Blue Revolution', while charting the way ahead for the maritime domain and the are likely to register significant situation can best be described growth in the coming years. preventing pollution, developing an integrated plan as 'FRAGILE'. Consequently 19. Renewable ocean energy is for fishing, and optimal over 120 warships from about another un-harnessed niche utilisation of resources with 20 navies are always present in sector with immense scope in minimum impact on the the Indian Ocean to safeguard the future. This includes tidal environment and ensuring their maritime interests. India and wave energy and ocean sustainable development of the has vast maritime interests and thermal energy conversion. It oceans. the responsibility for protecting can therefore be seen that while these maritime interests falls there is an ocean of 21. The Indian Ocean has squarely on the shoulders of opportunities for development emerged as the global men in white uniform as it is the of maritime interests for economic highway, which is responsibility of the Navy and economic growth, the rich in oil and mineral the Coast Guard to ensure that challenges lie in ensuring that resources. It is the third largest our maritime interests which these are greenfield projects, water body spanning an area of have a vital relationship with with a minimum impact on the 68.5 million sq. Kms and the nation's economic growth environment, to ensure countries on the rim of the are allowed to develop sustainable development of the ocean are home to nearly one unhindered at all times. oceans. third of humanity. 24. In 2008, the Indian Navy 20. Therefore, while India is launched a unique initiative of 22. The seas are no longer a focused on economic the Indian Ocean Naval benign medium and development of its maritime Symposium (IONS) which was globalisation has led to interests it is also committed to a construct to manage the vulnerability of the oceans. The traveling down the path of maritime affairs of the threats and challenges in the sustainable development. The countries of the Indian Ocean maritime domain are as wide United Nations General Region. Over the years the and varied as they come and Assembly published a IONS has emerged as an document in 2015 titled include, piracy, maritime effective organization with 'Transforming our world', the terrorism, arms trafficking, membership of 22 navies and 2030 Agenda for sustainable drugs smuggling, human four observers. In my view development with 15 specific trafficking and poaching. IONS has the potential to goals and 169 targets. Of these, Another challenge is that the provide an effective template to SDG 14, pertains to the waters of the Bay of Bengal and promote cooperation in the conservation and sustainable the Indian Ocean are prone to u14 March 2019 MEDC Economic Digest Cover Story maritime domain in the Indian Honorable Prime Minister Development Goal, SDG Ocean Region. articulated his maritime vision 14', provide a template for 25. The Indian Ocean Rim for the nation. India's recent conservation of the Association (IORA) is another initiatives in the maritime oceans, seas and resources. organization which provides domain, including the quest for We now need to outline a the avenue for strengthening harnessing the Blue Economy, perspective plan for maritime cooperation between are pointers to indicate that sustainable development countries of the Indian Ocean India has once again turned and growth in different Region. Incidentally, 20 towards the seas and is destined avenues of the maritime members of IORA also have to emerge as a resurgent sector. their navies as members of maritime nation. (b) As a maritime nation, India IONS, and recent years have 28. The Indian Ocean has has a significant potential witnessed some synergy emerged as the world's center to harness the Blue between IONS and IORA for of gravity in the maritime Economy. We need to promoting maritime domain. Another unique chart a national level cooperation. feature of the Indian Ocean is maritime policy to harness 26. In order to further promote that 80% of the oil and trade the Blue Economy, for cooperation along navies of that emanates in the Indian sustained development of the world, the Indian Navy Ocean is extra regional in the oceans. conducted the International nature. This implies that if (c) There is a requirement for Fleet Review at there is any impediment in the an apex level organization Vishakhapatnam on the East free flow of oil or trade it would to coordinate and integrate coast of India, in 2016. Fifty have a detrimental impact not planning process of navies of the world came just on the economies of the various departments and together, to strengthen bridges region but global economy as agencies in the maritime of friendship and we had nearly well. Safety, security and domain for economic 100 ships at the review stability on the waters of the development of our anchorage. The underlying Indian Ocean is therefore of maritime interests and theme of the Review was that paramount importance, and it is implementing Blue we may be separated by the collective responsibility of Economy initiatives, so as geography but we are certainly the navies and the coast guards to enable India to emerge united through oceans. to ensure the security of the as a resurgent maritime global commons. Networking nation. 27. During the International among navies and global Fleet Review, the Honorable maritime partnership are (d) The Indian Ocean Naval Prime Minister of India, Shri therefore emerging as the new Symposium (IONS) and Narendra Modi reiterated his order in the current century. the Indian Ocean Rim vision of SAGAR, Security and Association (IORA) are Growth for All in the Region and 29. In conclusion, six major important maritime linked the Blue chakra or wheel aspects require our attention as constructs to manage the in our national flag with the a nation:- maritime affairs of the potential of the Blue Economy. (a) The United Nation's IOR. There needs to be India later conducted the document 'Transforming greater synergy between Maritime Summit at Mumbai in Our World –2030' Agenda IONS and IORA to April 2016, where the and the 'Sustainable enhance maritime

MEDC Economic Digest March 2019 u15 Cover Story cooperation between region with a 'holistic ensuring clean oceans or countries of the Indian Ocean government approach' so 'Swachh Sagar' for our Region. We could also consider as to shape a positive and future generations. integrating the SAGARMALA favorable maritime 30. The seas around us are project with the concept of environment in the Indian gaining new found Security and Growth for All in Ocean Region. importance as each day the Region (SAGAR) by (f) The Honourable Prime goes by, because of their extending the development of Minister has launched a linkages with the Blue ports to our littoral neighbours dynamic initiative of Economy and I have no and provide an eco-system of Swachh Bharat (Clean doubt that the current connectivity and sea borne India). We need to extend century is the century of trade in the region. theconcepttoSwachh the seas. There is no doubt (e) To fully implement the Sagar (Clean Oceans). This that our future economic Honourable Prime could be a people's well-being rests on our Minister's vision of movement where we draw ability to harness the Blue SAGAR, that is, 'Security up an action plan and Economy, enhance the and Growth for All in the motivate every citizen and maritime cooperation Region', we need to draw maritime agencies to between the countries in up a detailed roadmap for contribute towards the region and ensure maritime cooperation with cleaning our coastal areas, sustainable development various countries of the and extend the concept to of the oceans.

Appeal to the Members for the Payment of Annual Membership Fee for the year 2018-19

Dear Members, The MEDC is grateful to its Associate and Constituent Members, who have paid their membershipf ee for the current financial year (2018-2019) The MEDC requests its Associate and Constituent Members (those who have not yet paid their membership fee), to make the payment at an early date before 25th March 2019 to enable us to update the data of members for the year 2019-2020 Your early action in this regard will be highly appreciated. for more information pl. contact: Sr. Manager Research & Training Maharashtra Economic Development Council 3rd Floor, Y.B. Chavan Centre, Nariman Point, Mumbai – 400021. Tel : 22842206/09/22846288 u16 March 2019 MEDC Economic Digest Cover Story

Blue Economy and Indian Maritime Landscape Dr. Malini Shankar, IAS, Director General of Shipping cum Secretary GOI [email protected] Mr. Vikrant Rai, Engineer & Ship Surveyor, Directorate General of Shipping

Abstract: Leading economists have importance of oceans in their For decades the oceans have predicted that the oceans' national economies, many remained absolutely contribution to global economy developed economies have fundamental in maintaining all is going to increase in this already integrated oceans into life on Earth and they are a key century and oceans are likely to their national policies. Blue source of food, livelihoods and become one of the world's economy is sure to be the cultural well-being for a main economic forces in this buzzword for years to come as substantial portion of global frenetically changing, modern it will be the means to address population. Unfortunately, world. As per WWF report resource scarcity for many over the past few decades, we 2015, oceans generate goods nations by way of the land-dwelling creatures have and services worth at least $2.5 increasing dependence on not been kind to our oceans; trillion each year, while their locally available ocean human actions have destroyed overall value is ten times that resources. To harness the full many ocean ecosystems, figure. If oceans were a nation, potential of ocean resources on putting our food, economies it will rank amongst the first 10 a sustainable basis, the oceans and culture in jeopardy. These biggest economies in the world. are required to be in a impacts are further exacerbated However, there is nothing more continually healthy and by the increasing needs of an certain than that the world will productive state to support the ever-expanding global continue to change but ocean is growth of the maritime sector population and by pressures changing faster than at any in a sustainable way. resulting from a changing other given point of time in Shipping and the larger climate. But the tides are finally, years that have been passed due maritime industry which albeit slowly, turning and, to the ever-increasing includes ports are vital to this under the leadership of many exploitation of ocean resources ocean-based economy. The small island nations, ocean for economic growth. There is a issues have recently been transportation of passengers possibility that we may push and goods facilitate many other brought firmly to the forefront, many ocean systems beyond first at the Rio +20 Conference industries such as oil and gas, the point of no return, seriously fishing, tourism etc. and ports in 2012 and then at the Climate constraining options for our Conference in Paris in Dec will continue to be the gateways children and for generations to between the land and sea. India 2015. Since oceans contribute come. largely in providing is one of the fastest growing employment, enjoyment and One of the 17 sustainable large economies in the world food to billions of people development goals of the with a GDP growth rate of world-wide, it is imperative to United Nation 2030 Agenda for 7.5% in 2015-16 and maritime stress the importance of Sustainable development is transport industry plays an preserving the health of the dedicated to the oceans. important role in the overall ocean ecosystem. Realizing the critical economic development of the

MEDC Economic Digest March 2019 u17 Cover Story country. Approximately 95 % reduces the operational cost of matter. Distinction is made of India's merchandise trade the vessels due to the lower between greenhouse gas (by volume) passes through sea. constructional, equipment, emissions (GHG) and other Although water-borne manning and survey emissions. GHG results in transport is much safer, requirement without affecting climate change and affects cheaper and cleaner, compared safety of the vessel. stratospheric ozone layer, with to other modes of In order to fulfil GOI vision of resultant global impact, transportation, it accounts for enhanced use of ships for whereas non-GHG emissions less than 6% of India's modal transport of goods, promotion generally have more local share. By comparison, coastal impacts. It is estimated that and inland water transportation of tourism and enhanced contribution from blue about 15 % of the contribute to 47% of China's anthropogenic NO emissions freight modal mix, while in economy to Indian GDP, it is x essential that the landscape of and 7 % of the SO2 emissions Japan and US, this share is 34% are due to shipping. Although and 12.4% respectively. maritime transport is sustainable in the long term and shipping is regarded as a Significant savings can be relatively eco-friendly form of achieved by shifting movement that its effect on coastal transportation, emissions can of industrial commodities like environment is minimal. The be significant in areas with coal, iron ore, cement and steel purpose of this paper is to heavy ship traffic. to coastal and inland enlist the efforts under taken by waterways. Government of GOI to provide a sustainable Emissions to air are regulated India (GOI) is pushing for a maritime transport by by Annex VI in MARPOL (the modal shift of cargo from road providing a view of maritime International Convention for to water in order to decongest landscape of India, the the Prevention of Pollution roads and reduce cost of international marine pollution from Ships), to which India is a logistics and plan to achieve regulatory mechanism and signatory, and rulemaking 10% share of water transport policy initiatives by the power conferred to central by 2020. Directorate General of government by the Merchant shipping to minimize adverse Further cruise tourism is being Shipping Act, 1958 through the effect on coastal environment promoted to boost India's Merchant Shipping Rules to and communities due to economic growth and generate regulate such operational employment. To promote pollution from ships. discharges to ensure discharges coastal shipping, the GOI plans Marine Pollution and are in accordance with the to enter into an agreement with International Regulatory stipulated requirements. The its neighbours and has already Mechanism: Rules and Regulations seek to entered into a coastal shipping Air Emissions minimize airborne emissions agreement with Bangladesh and their contribution to global wherein sea transportation Ships generate pollutants while air pollution and environmental from Indian ports to at sea and in port and discharge problems. Bangladesh ports and vice- operational waste at sea. No emissions from marine versa are being treated as Though in a controlled rate, yet x coastal movement, making it it has a direct impact on the engines with a power output eligible for 40% concession on biosphere. The main pollutants over 130 kW are regulated as a vessel and cargo related are sulphur dioxide, carbon function of engine speed. Ships charges. Treatment of short sea dioxide, nitrogen oxides and built between 2000 and 2011 shipping as coastal movement various kinds of particulate need to comply with the Tier 1 u18 March 2019 MEDC Economic Digest Cover Story standards which range from of energy efficiency for tankers, obligation on contracting 9.8-17.0 g kWh. Ship engines gas carriers, bulk carriers, parties to provide reception built after 2011 need to comply general cargo ships, facilities for these wastes in with the Tier II standards (7.7- refrigerated cargo carriers and their ports. However, 14.4 g kWh). Ships operating container ships. inadequacies in the provision within NO emission control x Marine Litter of port reception facilities areas (NECAs) after 1 January often result in these wastes 2016 need to meet Tier III Ships generate waste such as ending up at sea/oceans. The standards (2.0-3.4 g kWh). oily wastes, sludge, sewage and impact of these discharges is According to the IMO (2009) garbage, and cargo residues well known, ranging from Tier 1 ship engines have 12–14 during loading and unloading chemical pollution, which may % lower NOx emissions per operations. The type and affect the acidity of the ocean tonne of fuel combusted quantity of wastes generated waters or add chemicals into compared to pre-regulation depends on various factors the food chain, subsequently (Tier 0) engines, while Tier 2 such as the type and size of the affecting marine life and human and Tier 3 are 25 % and 80 % ship, the duration of the health, to the death of marine lower than Tier 1 respectively. journey, the number of crew on life as non-digestible, non- Sulphur in fuel is the main board, the speed of the ship, degradable debris and plastic is source of SOx emissions from the type of fuel and the waste eaten by marine animals by shipping. MARPOL Annex VI management practices on mistake. Marine litter can also since 2011 has limited the board. Globally, it was affect both the natural and sulphur content in the fuel to estimated in 1982 that 8 million economic value of the 3.5% worldwide and items of marine litter entered shoreline. Under Merchant restrictions will be further the world's oceans and seas Shipping Act, 1958 the ports tightened to 0.5% worldwide every day, of which 5 million are obligated to provide port from 2020. items were thought to be reception facilities. thrown overboard or lost from GHG emissions such as carbon Maritime Landscape of ships (UNEP, 2009). However, dioxide is dependent upon the India amount and type of fuel year on year the quantity of burned on a ship. Energy marine litter is increasing A look at “Basic Port Statistics: efficiency requirements were (UNEP,2011). 2016-2017” (Table 1 & 2) included in MARPOL Annex A report [Plastic debris in the published by Ministry of VI from July 2013. coastal and marine ecosystem: a Shipping gives us the following Performance-based energy menace that needs concerted statistics to analyse the ways efficiency requirements are set efforts] by A. Vennila, H. B. and means for reducing for certain new ships of 400 Jayasiri and P. K. Pandey pollution from ships in Indian GT and above, which will be published in the International territorial waters. gradually tightened over time Journal of Fisheries and Most scenarios for shipping until 2025-2030 when there will Aquatic Studies 2014 has stated towards 2050 predict be a 30 % improvement over that ocean and waterways significant growth in the the average efficiency of ships activities account for 8.5% of demand for seaborne trade and built between 2000 and 2010. all coastal debris. MARPOL a corresponding growth in the IMO has developed an energy prohibits discharge of many of world fleet. As per a report of efficiency design index (EEDI) these wastes and to prevent the National Transport which sets a minimum standard dumping at sea puts an Development Policy

MEDC Economic Digest March 2019 u19 Cover Story

Committee, India's cargo Number of Total Cargo Percentage of Percentage of Estimated number Estimated total traffic handled by ports is Vessels which handled in total cargo total cargo of vessels which number of vessels expected to reach 1,695 million sailed out from Indian Ports handled by major handled by sailed out of non - which sailed out metric tonnes by 2021-22. Major Ports ports other ports major port based of Indian ports Based on these statistics and on cargo handled considering that 37500 vessel- visits handled 1100 Million MT of cargo from/to Indian ports, 21500 1100 57% 43% 16000 37500 it can be roughly estimated that Million MT there will be about 57000 Table 1: Estimation of Vessels which sailed out of Indian Ports in 2016-2017 vessel-visit in Indian ports by 2021-22, thereby increasing the Source: Basic Port Statistics of India, 2016 -2017; Transport Research Wing, Ministry of Shipping, GOI; estimated fuel consumption in http://shipmin.gov.in/showfile.php?lid=2687 Indian ports to 2,50,000 metric-tonnes. Below (Table 3) Average turn - Pre-berthing Average time in port Total fuel burned in Indian ports in 2016 - is a study of vessels registered around time in detention time per vessel 2017 taking into consideration that each ship in India and plying on Indian Indian Ports runs a 400KW diesel generator which coast: consumes 2 tonnes of fuel per day Foreign vessels coming to India (Conservative basis) are verified for compliance to 3.48 days 1.27 days 2.21 days 37500 x 2 x 2.21 = 1,66,000 Tonnes MARPOL and other requirements once in six In port area considering pre -berthing months. In order to ensure that detention time=2,61,000 Tonnes sub-standard ships do not ply Table 2: Estimated fuel oil burned by visiting ships in Indian ports in the region, many countries in the Indian Ocean have Total number of Vessels built on/after 1 Vessels built on/after 1 Vessels more than 20 - collaborated via a MOU vessels January 2011(Before entering January 2000 but prior 1 year-old (Before entering wherein all ships visiting this of MARPOL NOx Tier II January 2011 into force of IMO NOx region (that is any country in the IOMOU) are inspected compliance) Tier 1 compliance) once in six months. Statistics 934 185 277 472 of these inspections is used to Table 3: Approximate figures of coastal vessels registered in India calculate emission compliances Source: As on 31.12.2017: Directorate General of Shipping:; based on the date of building http://dgshipping.gov.in/WriteReadData/UserFiles/file/Monthly_tonnage_statement_310718.pdf of ships touching Indian ports. Details of port state inspection Vessels built after 1 January Vessels built between 2000 - Vessels built prior 2011 (% of total) 2011(% of total) 2011(% of total) statistics in IOMOU region for 3649(60%) 1799(30%) 561(10%) the calendar year 2016 is given Source: National Informatics Centre which is maintaining Indian Ocean MOU Port State control computerized below: (Table 4) information system. Approximate age brackets of ships (which sailed out of Indian ports in 2016 -17) with respect to

A look at the tables above gives MARPOL NOx Compliance calculated on the basis of inspection statistics. following narrative about NOx Vessels built after 1 January 2011 Vessels built between 2000 -2011 Vessels built prior to 2000 sailing emissions in Indian coastal sailing out of Indian ports sailing out of Indian ports out of Indian Ports regions: 0.6x37500=22500 0.3 x 37500= 11250 0.1x37500=3750 I) Inferring from port state Table 4: Age profile of Ships coming to Indian ports (Indian & Foreign) u20 March 2019 MEDC Economic Digest Cover Story

inspection statistics, it is Annex VI Tier 1 or 2 in figures -2017” published by

estimated that 60% of all compliant for NOx Marine Department, People the foreign registered emissions and many of Republic of China, there were vessels leaving/coming these are operating on gas more than 1,80,000/- vessels from/to Indian ports are oil with low sulphur content arrival in Hong-Kong in 2016 less than 8-year-old. As per in fuel oil. The remaining (however, more than 84% of

IMO, after 2008, the 49% vessels are neither NOx these are River Sea Vessels) operational efficiencies of Tier 1 and nor Tier 2 with an average turn-around ships have increased by 30% compliant, but these are time of 1.45 days. This results and thus there are lower few in numbers. However, in burning of more than 0.5 emissions of GHG and as a ship becomes old, its million tonnes of fuel (taking non-GHG pollutants. operational efficiency an average fuel burned per day Further these vessels built comes down and it not only =2 tonnes) in 2016 and that too on/after 2010 are IMO NOx emits higher GHG only in one port of China. Tier II compliant and thus emissions but also other China, where coastal and inland emit lesser amount of non-GHG emissions. shipping accounts for over 47% nitrogen-oxides. This is a As per a discussion paper by of freight modal mix, has to measure of success of port International Transport Forum urgently implement a series of state control measures {Shipping Emissions in Ports, measures in a span of 2-3 years implemented by India; 2014} Asia and Europe to reduce emission intensity where-in foreign ships are represent 70% of international from shipping in its coastal increasingly inspected for ships port calls; however, the waters. It includes enforcing the compliance to international GHG & non-GHG emissions use of fuel with a maximum and national requirements. per port call in European ports sulphur content of 0.5% on The sulphur dioxide is considerably lower than that ships berthing at 5 identified emissions from ships can in Asian ports due to ports in 2016 which further easily be controlled by implementation of policies increased in 2017 to 11 such limiting the amount of ports. Further, from 1 sulphur in fuel burned on such as shore power supply to visiting ships, use of low September 2018, engines of all board a ship. The limit of vessels imported in China are sulphur in fuel is going to be sulphur in ports and incentives on fuel switch in ports. As required to meet the NOx Tier stipulated at 0.5% from 1 II emission limits under the January 2020 and will compared to ports in developing countries like India, IMO's MARPOL Convention. substantially limit the With a shipping traffic growth amount of SO emitted. it is estimated that 70% of x emissions in ports in developed in Indian ports of more than With measures such as 5% in 2016-2017 and major shore power supply to countries is due to shipping. In Mumbai port, the report stated ports utilizing only on an visiting ships being initiated, average 60% of their available these emissions are further that the emissions from shipping accounts for 20% less capacity and with the going to come down many- implementation of the Goods folds. than that from trucks due to lower regulatory norms and Services Tax (GST), ii) Age profile of Indian imposed on road transport. demonetisation, and other coastal vessels shows that structural reforms, the about 51% of Indian coastal According to “Statistical potential real GDP growth of vessels are either MARPOL Report on Port of Hong-Kong 8-10% is a reality. This will lead

MEDC Economic Digest March 2019 u21 Cover Story to many-fold increase in sustainable marine Shipping being a custodian of shipping traffic at Indian ports infrastructure on Indian coast, MARPOL under Merchant and its consequential effect on if not addressed adequately and Shipping Act, 1958 has direct emissions from ships in Indian quickly. A rough estimate of a and moral responsibility to coastal regions and ports. few of the waste categories combat pollution from ships in Indian coastal zones including The promotion and generated on board a ship seas and ports. In the effort to development of coastal [Reference: The Management provide a clean environment to shipping in India by GOI is on of Ship-Generated Waste On- coastal communities following the acceptance that maritime board Ships; initiatives have been transport is an environmentally EMSA/OP/02/2016] is given undertaken by the directorate: friendly mode of transport in on the next page. terms of CO2 emissions when The importance of provisions Shore Power supply to ships calculated per deadweight of adequate port reception visiting Indian Ports: tonne along routes of similar facilities in India cannot be While docked at the port, ships length. However, considering emphasized more for the shut off their propulsion reasons that there are 37500 that other non-GHG engines, but use their auxiliary vessels-departure/visits emissions to air, like sulphur engines to power refrigeration, from/to Indian ports and dioxide, nitrogen oxides and lights, pumps and other considering that each ship particulate matter, are much touched an Indian port after an equipment. If ships connect to higher for shipping than other average of 5 days sailing and a shore-side power supply instead, emissions of SO , NO modes of transport – especially with an average of 10 crew on 2x when no abatement board, these ships bring to the and PM can be cut by 90 per technologies are applied, the Indian coast about 1875m3 to cent or more considering GOI has already initiated a 15000m3 of plastics, 1875m3 to berthing/departure and number of measures[detailed 1,87,500m3 of operational waste connection / dis-connection Plastic Oil-sludge Sewage Domestic Operational Waste Waste 0.001-0.008 0.01 to 0.03 m3 0.01 to 0.06 m3 per person per 0.001 to 0.02 0.001 to 0.1 m3 m3 per of sludge per day. Sewage is sometimes mixed m3 per day per person per person per tonne of HFO with other waste water. The per person day. day and 0.01 m3 per total amount ranges from 0.04 tonne of MGO. to 0.45 m3 per day per person. in next section]to combat such and 1875m3 to 37,500m3 of food time. The Directorate General emissions from shipping waste. Without adequate of Shipping in collaboration anticipating an upward growth infrastructure to enable ships to with Indian ports has decided in cargo movement from/to discharge this litter ashore, to mandatorily supply shore Indian ports and when Indian much of this may end up in power to visiting ships in Indian coastal shipping is on the verge Indian coastal waters. ports. Shore power is normally of an expected growth Efforts of Directorate supplied to ships at high voltage trajectory. General of Shipping in rather than low voltage in order combating Shipping to keep the physical size of Apart from air emissions, emissions related electrical equipment marine litter can be a significant such as shore connection cables problem in development of a The Directorate General of manageable. However, the u22 March 2019 MEDC Economic Digest Cover Story high-voltage supply requires on shore if the authorized data such as date of build from development of considerable contractor does not dispose it visiting ships which will help to investment and time for ports off in accordance with local determine the operational to prepare for the same. It is laws. efficiencies, compliances with realized that about 60% of MARPOL NO and GHG The Directorate as part of its x Indian coastal vessels are less control requirements and obligation under MARPOL to than 1000 GT with low power ultimately the GHG and non- provide adequate port demand and further maximum GHG emission pattern in reception facilities in Indian among these are tugs and Indian coastal waters. Further, ports, assessed port reception motor launches and thus they with figures such as time in facilities provided by various can easily be supplied with low ports and at port anchorages ports across India in the first voltage supply from the the total emission pattern will quarter of 2018. Based on this National Grid. Therefore, on a be established. pilot basis and with intent to assessment, and to facilitate prepare Indian ports for the further provisions of Port To determine future policy shore-power supply to Indian reception facilities in India it initiatives, International and International ships, it is has initiated the development Maritime Organization via decided that with immediate of a centralized, automated on- amendments to MARPOL has effect ships requiring a line system where prior to made it mandatory for all ships maximum of 150kW load will entering an Indian port, each above a certain size and on be mandatorily required to be and every vessel will fill up the international voyages to submit supplied with shore power in quantity of each and every type their fuel consumption data Indian ports. of waste on board and an through countries where their Waste reception facility at automated mail will be sent to a ships are registered. In order to Indian Ports single point contact in each port enable creation of a GHG who will then allot a contractor emission inventory and future Indian ports have been for waste collection. The policy option such as providing shore reception contractor will then collect mandatory switch over to green facilities to visiting ships. No waste from ship and upload on fuels, the directorate has made ship or seafarer deliberately the system, the necessary it mandatory for all ships wants to throw waste into the evidences regarding disposal of irrespective of size and area of sea, however there are many waste in accordance with local operation to declare their fuel reasons [i) the non-availability and national laws. This consumption data. of port reception facilities for centralized mechanism will also all types of waste; ii) tight Conclusion be utilised to supply shore schedule with limited time in power to visiting ship in time to The global character of the port to dispose of operational come. shipping industry makes it a waste at an inconveniently challenge to regulate as located place in the port; iii) Emission Inventory compared to road transport facility not available 24x7and The development of any policy industry. These global iv) low probability that illegal in medium and long term will regulatory regimes are to a large dumping activities will be require data to analyse the extent dependent on achieving detected] for such activity. emission pattern from ships on consensus among many Further even if the facility is Indian coast. The centralized nations which makes the provided, the waste should not waste reception system will also international regulatory regime end up in sea or cause pollution facilitate collection of other related to shipping more

MEDC Economic Digest March 2019 u23 Cover Story sluggish than the equivalent low-flash point fuel are already The initiatives by the regimes applied to land-based developed. Kits for running Directorate are small steps modes. Though, shipping fishing vessel on Liquefied forward greening the ports and contributes only 2.5% of world Petroleum Gas is already being the surrounding areas. GHG emission intensity and is type-approved. To promote The short sea shipping considered one of the most green Indian shipping, alternative will not deserve a environmentally friendly considerable investment is “green label” unless SO2, NOX modes of transport, pro-active required and therefore, in the and PM emissions are measures are being initiated to new Merchant Shipping Bill, addressed further. It is a firm promote greener technologies 2016, the ownership criterion belief that all stake holders will so that shipping does not lag for registering a vessel in India certainly rise to the occasion behind other sectors of Indian has been changed from “fully- and put in their sincere efforts economy including roadways in owned by Indians” to to collaborate with each other combating pollution. This substantially-owned”. This will for the cause of this great includes promotion of new allow small owners to tie-up nation in providing the future fuels like methanol and with foreign investors for generations a cleaner ocean liquefied natural gas to run growth of green Indian than what it is today for their ships. Rules for ships to run on shipping. survival.

u24 March 2019 MEDC Economic Digest MEDC Economic Digest March 2019 u25 Cover Story

Maritime Capacity Building : A Blue Economy Imperative For India Commodore Anil Jai Singh, IN (Retd) Vice President, Indian Maritime Foundation [email protected]

Introduction sustainable and equitable and remain resilient and healthy”. In the 1950s, Rachel Carson the development model for The World Bank defined the world renowned marine mankind. It is also referred to as Blue Economy in 2017 as the biologist had said “There has been the “Ocean Economy”. "sustainable use of ocean resources a strong belief that the sea, at least, Importance of the Blue for economic growth, improved was inviolate, beyond man's ability to Economy livelihoods and jobs, while preserving the health of ocean ecosystem”. change and to despoil. But this belief The importance of the Blue unfortunately has proved to be Economy cannot be over- The oceans cover 72% of the naïve”. emphasised. In an increasingly surface of our planet and In the six decades since, the globalized and interconnected constitute more than 95% of deep import of these words world challenged by depleting the bio-sphere. They sustain and the unfortunate reality of land resources and unchecked the essential ingredients that the unchecked depredation of exploitation, humankind's support life on earth and often the oceans has given rise to a dependence on the oceans will provide the balance to sustain new paradigm in the global not only become a means of it. They are a source of food for sustainable development sustenance but in fact an large sections of the global narrative which has been existential necessity. It will population and carry 80% of termed the Blue Economy. therefore become extremely global trade. They are also a major source of hydrocarbons Although the term Blue important to balance developmental imperatives which meet the requirements of economy originated from a developing world's insatiable Gunther Pauli , the Founder with a sustainable model of economic growth across a wide need for energy besides the and Director of “Zero potential for alternate sources Emissions Research and spectrum of sectors related to the marine environment of 'blue' energy. Human Initiatives” in his book “Blue endeavour however is placing Economy – 10 Years-100 ranging from fishing to transportation, resource ahugeburdenonthis innovations-100 million jobs” precious resource which has published in 2010, it was at the extraction, marine tourism to tapping the oceans for alternate the potential to meet the UN's Rio+20 Conference in sustainable development needs 2012, at the initiative of the sources of energy. The Economist, in a briefing paper of mankind but only if Small Island Developing States nurtured carefully. (SIDS), who pressed for the for the World Ocean Summit in green economy to take greater 2015 gave a working definition This sustainable development cognizance of the oceans as of Blue Economy – “A is also being increasingly development spaces, that this sustainable ocean economy emerges challenged by the phenomenon term was given a maritime when economic activity is in balance of climate change. It figures as orientation as the future of a with the long-term capacity of ocean Item No 14 in the Sustainable eco-systems to support this activity Development Goals u26 March 2019 MEDC Economic Digest Cover Story enunciated in the Paris people. Phenomena like piracy, still retains its primacy as the Conference in 2015. The rapid maritime terrorism, the refugee largest source of energy to melting of glaciers is disturbing exodus etc. are all most parts of the globe, has the delicate eco-balance of the manifestations of this. brought with it numerous global oceanic spaces leading to The Regional Dynamic economic and security higher sea levels which not only challenges which, if not threaten the livelihood of The 21st century has widely properly addressed and coastal communities all across been described as the “Asian regulated through a the world but their very survival Century” as also the “Century multinational cooperative with some SIDS facing the of the Seas” or the maritime framework have the potential possibility of inundation and century. Events thus far clearly to destabilise large sections of extinction. indicate that the focus of global the global population in ways attention has shifted to the The Security Challenge that are perhaps even difficult larger expanse of Asia, quite to envisage at present. Through The vulnerability to coastal distinct from the 20th century most of the strategic narrative degradation brings with it narrative where the Asia-Pacific in the 20th century, the Asia- numerous security challenges, and the Indian Ocean regions Pacific was clearly distinct from both external and internal. As were regarded as two distinct the Indian Ocean. However, livelihoods are threatened and geographical entities as was the developments in the region in communities get marginalised, continental land mass the last decade or so have they become susceptible to contiguous to these oceanic brought to the fore the ideological radicalisation and spaces. This has also brought contiguity of these two ocean- fall easy prey to disruptive with it numerous security and scapes and the region is now forces as we are seeing happen economic challenges which are being increasingly referred to as in large parts of the world; this so current and disruptive that the Indo-Pacific, thus is exploited by extra regional the traditional concept of state- emphasising the maritime powers who encourage on-state conflict has been orientation of this geo- destabilisation of economies transcended by non- economic construct. The Indo- through insurgencies to further conventional low intensity Pacific is home to many large their own national interests. threats and increasing and small coastal and The increasing incidences of incidences of natural disasters archepelagic states which are natural disasters, which are on which wreak havoc with coastal wholly dependent on the sea the rise greatly impact the communities and spawn new for their livelihood, economic security dynamic. Large scale threats. sustenance and their security. destruction of life and property Globalisation, inter- However, notwithstanding this put further strain on dependence and inter- 'Confluence of Two Oceans' as economically challenged connectivity have brought the described by the Japanese governments with limited world much closer and blurred Prime Minister Shinzo Abe, resources; the political traditional geographic when addressing the Indian leadership is often found boundaries. The rise of China Parliament in 2007 where he wanting. This encourages and India, the resurgence of the was the first to use the term inimical elements within and tiger economies of South-East 'Indo-Pacific' the Indian Ocean outside the country to exploit Asia, the emergence of Africa retains some unique and prey on the insecurities, as an economic force , the characteristics. It is the third fears and dissatisfaction of the volatility of West Asia while it largest ocean in the world and

MEDC Economic Digest March 2019 u27 Cover Story provide the link between the located island chains substantially to the Indian Pacific and the Atlantic comprising 599 inhabited and economy. Its large fishing Oceans. It is also unique in that uninhabited islands - the community, though largely it is bound by numerous choke Andaman and Nicobar islands unregulated is quite well points, principal among these on the eastern seaboard and the organised from within and if being the highly strategic Lakshwadweep group of properly integrated into India's Malacca Straits, the Bab-el- islands on the western maritime narrative, has Mandeb and the Straits of seaboard. These are equally a tremendous economic as well Hormuz, the security strength and a vulnerability as security potential. This implications of which are while being a vital asset to our community is being shaping the emerging national securonomic increasingly integrated into the securonomic contours of the construct. revamped coastal security region. India is largely dependent on framework after the tragic attacks in Mumbai a decade ago. India, the Indian Ocean and the sea for its energy India is also the beneficiary of the Blue Economy requirements, whether indigenous or imported. While exclusive sea-bed mining rights This paper will focus primarily a large portion of India's in the central Indian Ocean on the Indian Ocean region hydrocarbon requirement region, a source of resources and seek to establish how the come from overseas, most of we have not even scratched the intrinsic link between the Blue the indigenous extraction and surface of as yet. Economy and maritime production is also from The need for resources in a security can be leveraged by offshore installations. While region that has more than a India to consolidate its primacy this import bill is substantial quarter of the world's as the leading maritime power and makes India vulnerable to population transitioning from in the region through an global fluctuations in oil prices poverty to middle class is going inclusive and cooperative and geopolitical turbulence, its to be intense. With the framework of mutual benefit refining capacity is a valuable depletion in land resources and to the entire Indian Ocean source of export revenue. The increasing urbanisation, region and itself. sea is therefore central to nations will turn to the oceans India, despite its peninsular India's energy security as well as to meet the burgeoning conformation, is essentially a security of energy because any demands of this increasingly maritime nation – its coastline threat to either could have aspirational segment. This will extends 7516 kms. It has an disastrous consequences. inevitably give rise to Exclusive Economic Zone in India has a substantial maritime competition, and confrontation excess of 2.1 million sq kms infrastructure with 13 major with a distinct possibility at a which is likely to increase to ports and almost 200 minor later date, of conflict. The over 3 million sq kms EEZ, if ports. It has a large mercantile portents of this are already one were to include the fleet and more than 90% of its quite visible as emerging continental shelf demarcation, trade by volume and over 75% regional powers are challenging which is almost as much as the by value travels over the sea. the traditional maritime landmass in area and extremely India also has a large coastal boundaries and changing the rich in yet un-tapped resources community with a substantial geopolitical contours of the – our sea-bed exploration has dependence on the sea for their region itself. This challenge to barely scratched the surface yet. livelihood as well as economic the status quo is further We have two strategically well-being, and it contributes exacerbated by the presence of u28 March 2019 MEDC Economic Digest Cover Story large extra-regional powers in port in Iran and the North- mindset has seen a subtle the region and their strategic South Corridor and many other change. Prime Minister imperatives. development projects in the Narendra Modi's first visit The External Challenge smaller countries in the region outside Delhi after becoming could counter the Chinese the Prime Minister was to the In recent years, the emergence economic onslaught. However, aircraft carrier INS of China as a major maritime more will need to be done if Vikramaditya. Since then he has power and its assertive India is not to lose its pre- commissioned India's frontline economic diplomacy has been eminence in the Indian Ocean. destroyer INS Kolkata and the the focus of attention. latest conventional submarine Programmes like the Belt and India has always been at the INS Kalvari. This in itself was a Road Initiative (BRI), formerly forefront for a rules-based known as the One Belt One international order, has distinct acknowledgement of Road (OBOR) has enabled encouraged good ocean India's maritime credentials China to seize the initiative governance and takes great and its importance in the even in the Indian Ocean which pride in being a stabilising force national calculus. it is now bolstering with a for good in the Indian Ocean. Hence, India attaches much During his visit to Mauritius in commensurate naval presence. March 2015 to commission the It has recently established a importance to global developments on Blue Coast Guard OPV Barracuda military base in Djibouti at the which was built in India, he said western extremity of the Economy initiatives. As the leading Indian Ocean power, it “To me the Blue Chakra or Indian Ocean; it already has a wheel in India's national flag substantial presence in Gwadar is therefore critical for India to have a long term vision with a represents the potential of the on Pakistan's Makran Coast Blue Revolution in the Blue and is likely to establish a synergistic economic, security Economy. That is how central military base there. It is also and political approach to the ocean is to us.” The tightening its 'String of Pearls' leverage its strengths and centrality of the oceans to India with the 99-year lease of the develop a collective and Hambantota port in Sri Lanka, inclusive Blue Economy agenda could not have been more supply of submarines to for the Indian Ocean region explicitly stated. This was Bangladesh and its recent and to use this collective followed by the International overture to Maldives which has strength to drive the global Fleet Review of February 2016 emboldened that country to agenda for a sustainable future in which more than 50 nations question the Indian presence for mankind. This will require a participated reflecting India' there. These are just some of combination of economic growing maritime stature in the the many Chinese programmes strength, deft diplomacy, a region where the Prime in the region. While India secure environment, and a Minister once again highlighted cannot match China's political will where the whole the importance of the maritime economic muscle and will be greater than the sum of sector for India. He also bountiful funding, albeit at its parts. announced a Global Maritime prohibitive interest rates, The Evolving Paradigm Summit in April 2016 in India's attempt at a calibrated Since 2014 when the current Mumbai. At this Summit, response to these initiatives like government assumed office, investments over Rs 80,000 the proposed Africa corridor, India's largely continental crore were committed towards the development of Chabahar maritime development.

MEDC Economic Digest March 2019 u29 Cover Story

Towards a Maritime Addressing the Challenge if viewed in its entirety. In-fact Resurgence Maritime security and the Blue many navies have even re- oriented their force structuring In the last four years two economy are closely from the principal role of war- important and interlinked. As stated earlier, fighting to countering these transformational maritime this millennium has seen an low-intensity hybrid threats initiatives have also been exponential increase in the with greater focus on lightly implemented which should trans-national maritime armed Offshore Patrol Vessels form the springboard for security challenges which, by their sheer visibility, have (OPVs) than large heavily India's planned maritime armed destroyers and frigates, resurgence. gained more prominence than the traditional state-on-state with attendant consequences The first, called conflict scenarios that nations on war-fighting combat SAGARMALA is an ambitious are more familiar with and capability which is the very Rs. 8.5 trillion programme to which form the basis of their raison d'etre of navies. It may augment and rejuvenate India's national security architecture. be recalled that the entire might maritime infrastructure and This is directly related to the of the Indian Navy and the maritime transportation, development deficit in coastal Indian Coast Guard was unable including inland waterways, communities, the effects of to prevent the devastating towards utilising India's climate change, natural attacks on Mumbai on 26 substantial natural and man- disasters and human disregard November 2008 which, if seen made maritime assets to of the marine eco-system either in perspective, were actually optimise our economic due to ignorance or plain launched from a small fishing potential. Of a total of 577 callousness. This new security vessel. planned projects, 492 are at paradigm therefore requires a Besides the conventional and various stages of comprehensive and sub-conventional security implementation. cooperative approach as the challenges, non-traditional security threats have created The second initiative with the very fabric of the global their own dynamic. Natural acronym SAGAR (Sa ecurity nd commons being equal to all mankind stands threatened. calamities and man-made GARrowth for ll in the egion) The cost of countering these disasters are on the rise – the envisages a collective approach threats further strains the effects of humankind's assault to the security and economic economy and is often at the on nature- leading to untold well -being of the region. Both cost of social development. For misery to coastal communities these initiatives, if properly over a decade the piracy in across the region and indeed coordinated and effectively Somali waters and the Horn of the world. Addressing these implemented can complement Africa has led to a huge first requires a global each other towards harnessing multinational naval presence to acknowledgement of the India's enormous marine protect the sea lines of magnitude of the threat and the potential for creating a secure communication and shipping need to think and act beyond maritime environment in the with large destroyers and physical and mental region as well as its economic frigates deployed to counter geographies. Unfortunately, enhancement in a sustainable illiterate gun-toting youth in some of the biggest framework in keeping with the small skiffs. The cost of this perpetrators of this are in a principles of the Blue effort has been totally state of denial, despite Economy. disproportionate to the threat overwhelming evidence to the u30 March 2019 MEDC Economic Digest Cover Story contrary. Myopic governments Building Capacity, considerable maritime capacity lacking the intellectual band- Developing Capability and resources towards this. width and maturity are refusing India's capacity constraints and This will not only help India in to rise above narrow national bureaucratic apathy have made regaining its strategic space in interests to acknowledge the it vulnerable to an aggressive its neighbourhood which it has long- term effects of these. extra-regional presence in the been losing steadily but also Notwithstanding these neighbourhood. Traditional lend credibility to India's claim aberrations, a focussed multi- of being the net security lateral and multi-layered friends and allies in our 'strategic backyard' are being provider in the Indian Ocean dynamic approach by global while reinforcing India's status and regional institutions, seduced by economic largesse into committing themselves to as the leading maritime power individual governments, global in the Indian Ocean. and local industry, non- long term economic governmental organisations, dependence on extra-regional As the competition for community outreach powers. This has grave resources becomes more programmes and many other economic and security intense, a sustainable model for such initiatives can offer a way consequences for India and is development will come under ahead. Initiatives such as the detrimental to the collective further threat and become Sustainable Development economic security of the increasingly difficult to enforce. Goals are at least generating a region. The Indian Ocean region, discussion and some action It is initiatives like Sagarmala home to numerous small island which is a good beginning. and SAGAR which highlight states and impoverished coastal Nearer home, the Indian infrastructure augmentation, communities will be Ocean Rim Association inclusive growth, and collective particularly vulnerable to (IORA) has included capacity building in the Indian coercion and compromise. sustainable development in its Ocean that have the potential to Hence, for any sustainable agenda and it has been the topic shape the future geo-economic model of development to of discussion at numerous contours of the region. This in survive, reasonable maritime conferences in the turn will drive the geostrategic commitments of security and region. It is mechanisms such imperatives and the geopolitical well- being will have to be as these coupled with smaller initiatives. However, these will visibly implemented. regional groupings like Bay of have to be accorded top priority Countries such as India are Bengal Initiative for Multi- if their envisaged aims are to be heavily dependent on the seas. Sectoral Technical and realised in any meaningful Economic Cooperation The safe movement of goods (BIMSTEC), South Asian manner. The vision has been to and from their ports is vital Association for Regional clearly articulated and it is now to their economic sustenance. Cooperation (SAARC), East for the government to Hence, historically, navies have Asia Summit (EAS) and implement the programme on a been employed to either executive level groups like the fast track with a comprehensive protect or disrupt trade. Indian Ocean Naval approach towards supporting However, in the eternal debate Symposium (IONS) which sustainable models of about whether trade follows India needs to leverage to take a development amongst the flag or vice-versa, it is leadership position in the Blue maritime nations in our important to ensure that the Economy initiatives in the neighbourhood and country has adequate 'Blue region. channelizing India's Muscle', to support its Blue

MEDC Economic Digest March 2019 u31 Cover Story

Economy initiatives (which Suggested Way Ahead India working directly under now extend much beyond just India, as the largest maritime the Prime Minister and assisted trade) and shape the power in the Indian Ocean has by governmental and non- environment on terms to be at the forefront in governmental domain experts favourable to India. promoting Blue Economy representing the full spectrum The Indian Navy and the Coast initiatives in the region. of maritime activity to develop an actionable time bound way Guard are on a growth Capacity building and capability ahead with adequate budgetary trajectory towards a balanced enhancement in a cooperative support. full spectrum capability. The and inclusive framework will go Chief of the Naval Staff, a long way in gaining the In 2010, the Government had Admiral Sunil Lanba has stated confidence of the small island announced an ambitious 10- that India will have a 200 ship states and nations with large year Maritime Agenda with navy by 2027. These are coastal communities who lack distinct targets to be achieved impressive numbers but do the potential, capacity and size by 2020. However, little is heard they tell the whole story? to matter on the world stage. of that and it is assumed that it There are numerous capability The support of these nations in has been absorbed into gaps in this arsenal which need global and regional institutions Sagarmala and SAGAR, the to be addressed with the will help leverage the Indian two transformational initiatives urgency they deserve if India is perspective towards our larger which have the potential to to be a truly credible naval international ambitions as a change the Indian maritime power. Warship building is global force for good. landscape provided they are slow, decision making in the However, for that we need to allowed to fructify. It is government even slower and first ensure that internally, we initiatives such as these which import dependence is high. have a comprehensive, should be under the Maritime This is a strategic vulnerability coherent and cohesive Adviser with support from all that could compromise our approach towards the maritime concerned departments and own security interests and domain and appreciate its ministries. constrain our attempts to build criticality to India's strategic capacity in the region. ambitions. For many years now, India's ports, shipyards and Further, India is still far from the need for an empowered marine infrastructure need a being a maritime power – it has maritime body is being boost to become globally less than 1% of the global articulated but has yet to find competitive. The Government shipbuilding market, only two favour with the political must create an enabling of our ports (Mumbai and leadership for reasons not yet environment and encourage Mundra) figure in the global understood. Presently, various business and revenue top 50, ranked 33 and 34 maritime- related affairs of the models such as COCO, PPP respectively while China has country are represented by etc. to harness India's famed seveninthetop10.Our more than 25 ministries and entrepreneurial spirit. Similar mercantile marine , though departments with its support should be extended to impressive in numbers, is deleterious effects on a neighbouring countries on a outdated and our long consensual approach or mutually complementary basis. neglected maritime effective decision making. The As an example, Colombo, infrastructure is only now need of the hour therefore is to which ranks amongst the showing a few green shoots of have an empowered Maritime largest trans-shipment ports in revival. Adviser to the Government of the world, has reached this u32 March 2019 MEDC Economic Digest Cover Story exalted position because of create dependencies for further placed under an empowered Indian trade. More than 60% exploitation which may actually authority with multi-sectoral of this transhipment is to and be detrimental to the region. representation comprising from Indian ports. As part of India, as the pre-eminent power domain experts who will report SAGAR, this should be in the region must regain its directly to the Prime Minister. leveraged to enhance the advantage through a multi- As a leading regional maritime Indian footprint in the region. dimensional and multi-sectoral power, India has the potential Provide the necessary policy approach with maritime to be at the forefront in leading and regulatory framework to security against trans-national the Indian Ocean region and encourage foreign investment. and non-conventional threats championing the cause of the This will introduce being integral to it. Confidence SIDS which are likely to be the contemporary technology and Building Measures (CBMs) and worst affected. This would not best practices in corporate capacity building in this area only reinforce India's stand as a governance as well as industrial through a robust information force for good but also generate practices besides providing sharing mechanism, training confidence amongst the financial support. programmes, bilateral and regional stakeholders about Encourage Indian shipbuilders multilateral exchanges and India's benign intent and would to obtain export orders for exercises, interoperability, also be beneficial to India's long shipbuilding and develop support in augmenting force term national interests. maritime infrastructure in levels and technologies, and Initiatives like Sagarmala and friendly foreign countries. providing Maritime Domain SAGAR lay out the framework Incentivise investment in Awareness to counter threats for an inclusive and collective maritime industry and are some of the areas which approach towards harnessing infrastructure by offering would generate a non- the potential of the marine investment funds at threatening culture of mutual environment for the long term competitive rates of interest. trust and confidence. for the entire region; maritime Conclusion security which is integral to the There is enough evidence to Blue Economy is therefore an establish that the recent The subject of the Blue important factor. India's naval maritime resurgence in the Economy needs to be strengths must therefore also region through various understood in its entirety by the be leveraged in collective schemes like the Belt and Road policy makers as it is going to security architecture to combat Initiative is all related to the witness an exponential increase conventional, non- Blue Economy. The in importance as a model for conventional and non- belligerence by some extra- sustainable development in the traditional security threats regional powers is aimed at future. The fragmented through enhanced maritime seizing the initiative in tapping maritime decision making domain awareness, information the abundance of marine apparatus in the government sharing mechanisms and resources and developing the comprising numerous confidence building measures. maritime infrastructure in the ministries and departments region and leveraging this to needs to be overhauled and

MEDC Economic Digest March 2019 u33 Cover Story

A BLUE BREXIT Harnessing the Blue Economy in times of radical socio-political change Mr. Mihir Joshi Warwick University [email protected] Abstract economist but rather a social that have been left behind in a In this paper, the 'blue scientist. There is an analysis of period of increased economy' is analysed through the condition of managed globalisation, can benefit from the lens of radical socio- decline that has led to a lot of a removal of tariffs and non- political and economic change areas in the United Kingdom to tariff barriers that the Blue with the case-study of the be under relative deprivation. Economy can facilitate. There is a look at case studies United Kingdom leaving the There is then a look at the such as the City of Liverpool European Union in March fishing industry in the United which is considered one of the 2019. This paper looks at how it Kingdom. As an island nation, most deprived areas in the is possible to harness the power fishing has been integral to the United Kingdom and a look at of the blue economy to not United Kingdom economy, and the reasoning behind this only mitigate the risks yet, it has been neglected in the associated with leaving the deprivation. This includes issues such as a failing of the past 30 odd years. The paper European Union's single argues that using the Blue market but also to turbocharge education system and relatively poor infrastructure links. Economy as a development the UK economy into the tool, the fishing industry can be future. This paper argues that The focus then moves on to revitalised, and this can lead to the United Kingdom, as an what, in general, can be said to major gains for coastal island nation, is best placed to create wealth and opportunity communities that have take advantage of the ocean within an economy with a look struggled to cope with the acute and its limitless opportunities at the economic dynamics globalisation of the fishing to expand economic growth, involved. With this in mind, the industry and things such as the increase opportunities for Blue Economy is used as a tool European Union Common global free-trade, rebalance the to which economic progress Fisheries Policy (CFP). United Kingdom economy can be generated through Furthermore, the paper argues away from London and things such as free-ports and that in order to fully fulfil the increase the equity of the UK increased free-trade. The focus Blue Economy guidelines, economy. It further argues that is not only on economic leaving the European Union it is possible to utilise the Blue parameters but also upon how can allow the United Kingdom Economy to remove tariff this can improve the lives of to encourage a more barriers to international trade citizens directly. There is a sustainable form of fisheries. which can greatly benefit the specific focus on port-cities in UK economy post-Brexit. the North West such as the Introduction The paper begins by looking at Tyne and Humber Valley which Once upon a time in the not-so- the current state of the United encompasses regions such as distant past British frigates Kingdom economy not from Grimsby and Newcastle. The crisscrossed the world's oceans the point of view of an focus is on how these regions, in search of opportunity. Be it u34 March 2019 MEDC Economic Digest Cover Story spices, rum, or expensive pre-eminence in the early was no need for so many ports gemstones, British ports acted industrialised economy was such as Liverpool, Newcastle as the global epicentre for trade based upon global trade and Portsmouth when the vast and the magical spreading of through its ports and across the majority of trade would be goods and ideas that came with seas. The ability to specialise done with just the European it. Pioneering were those initial and take advantage of continent. This has led to explorers who discovered comparative advantage in trade deprivation of which a first radically different markets and led to an explosion in British world nation such as the United brought them into the fold of economic growth only to speed Kingdom should not be proud global trade. Unbeknown to up the already gathering of. them at the time, these pioneers industrial revolution. The The Port of Liverpool is a sowed the seeds for the United Kingdom has always prime example of this dynamic globalisation we see looked globally; indeed, in most deprivation. In 1971 most of today. This all stemmed from of the early modern period, the the southern docks were closed British ports and sea travel. In a United Kingdom sought to and the land reclaimed for sad rump of its former self, establish new trade links with housing. This happened to Britain now finds herself far away markets such as India coincide with the largest period universally demonised by not and China rather than rest on its of manufacturing decline in the only its enemies but also those laurels and merely trade with its United Kingdom which was it perceived to be her friends. European neighbours. Moving caused by the complete inability The ports have decayed; the into the modern period of British manufacturing and people employed in ocean however dramatically changed trade-unions change in industries such as fishing and this and led to a massive shift in response to the new emergence ocean trading have been left in British attitudes towards global of Asian economies such as dilapidated conditions. While trade. China and Japan. The decline once Britannia ruled the waves, From the outset, joining the of this aspect of the Blue she now finds herself chained then European Economic Economy has caused a by uninspiring politicians who Community (EEC) and now dramatic decline in living have little knowledge of the EU was inevitably going to have standards across the city and it blue economy which is greatly an impact upon British vision. is this decline that the damaging the economic This country, once used to government seems to be prospects of the United looking far beyond the borders allowing to become so septic. Kingdom with a real, of its neighbours, had signed up TheCityofLiverpooland measurable impact upon her to an agreement that limited its many other coastal towns, inhabitants. vision to the nations within its mostly in the north of England, Managed Decline vicinity. Gone was the spirit of have been allowed to rot away exploration and in its place was just as if they are in managed The United Kingdom is unique decline. There is nothing in the amongst major global this murky scent of mediocrity. This straitjacket which took the eyes of the state that can be economies by virtue of being done to save these poor people an island nation. Never in form of 'helping British industry' actually limited it. The from their inevitable decline history has a country with so into destitution. 33% of few natural resources of itself ports and shipyard docks which once hummed with the sound children in the Liverpool city achieved so much in such a region are living in relative short time. Britain's economic of activity were taken apart or severely cut back as there just poverty and 18% of people of

MEDC Economic Digest March 2019 u35 Cover Story all ages are living in relative to go to food banks because exasperated by the fact that the poverty (MCGuinness and they can't afford food .(2014) only jobs available to these Ward, 2017). Away from the The reasons for this are unfortunately poorly educated glitzy centre of the city which complex and many blame the individuals are those in the has been regenerated, the government's austerity policy. services sector; as described housing stock is bleak, almost However, austerity alone above, this sector just does not Dickensian; the infrastructure cannot explain the historically pay enough in most cases to is crumbling; the connections higher unemployment in the sustain a stable family unit. Liverpool City Region post the to the rest of the country are The second symptom of 1970s. Key to this increasing poor and perhaps most managed decline is crumbling poverty is the disappearance of damningly, the economy has infrastructure. This is not an high paid jobs. The United not recovered from the 1970s exclusive problem to Liverpool. Kingdom is actually creating decline in manufacturing. Indeed, most of the north of more jobs than ever before in (Fothergill and Gudgin, 1982. England and Scotland struggles our recent economic history There can be no doubt, that with connectivity to London. (Wallace, 2018); the distinction modern Liverpudlians want to The major problem is not the this time is that the vast get ahead, they want to seize lack of government majority of jobs lie in the every opportunity to improve investment, although, the services sector. Services are every aspect of their lives and government does bear some yet, we cannot generate new dynamic and yet, the wages of these workers are way lower responsibility here. The true solutions to even the most issue lies with London. pressing of social issues. than what they were pre-1980 in manufacturing industries. It is As a massive city, and as I would It is essential to connect these this distinction between old argue, the world's best city, it symptoms to concrete policy jobs and the new jobs in the sucks up resources and failures to be able to see how 21st Century that have created government funding with the the blue economy vision can entire families that are in work ferocity of a black hole. I transform cities like this not and yet, do not earn enough to concede that London also only across the United actually live in comfort. generates the vast majority of Kingdom but also across many economic output for the port cities across the world. Another reason for this United Kingdom. However, The first symptom of managed continued poverty is the this inequity between the north decline is poverty. Indeed, poverty of aspirations fed into and south-east is a leading many will argue that real the region after years of driver of crumbling poverty, absolute poverty, does educational failures. The nearby infrastructure. The west-coast not exist in the United district of Knowsley has the mainline that links London to Kingdom and across the poorest educational attainment Liverpool is far too expensive Western World; this would be in the country with entire for the common person to use. correct. However, to move generations of children being It is also notorious for being forward, we must not falter and sacrificed to the alter of unreliably late and even if it say that relative poverty is a 'progressive' teaching methods wasn't, it still takes at least 2 given and therefore we should and a lack of educational not care about it. There are planning (Cobain, 2017). It is hours. Wealth is just not genuinelypeoplelivingin clear that this has led to a spreading from London to the Liverpool that cannot afford to dramatic reduction in social rest of the country and this is heat their homes or are forced mobility and this is only due to the fact that successive u36 March 2019 MEDC Economic Digest Cover Story governments have abandoned not just an economist, I think regions. The policy will be ideas of attempting to not this is a fallacy. Successful discussed further later. growth models are numerous, spread wealth from London Wealth is also built upon limited but they all have a number of but rather create it at places like government intervention. Liverpool (Raikes, 2018). Until essential ingredients. There is hardly any country in this is not changed, the Perhaps most un-fashionable in the world that has grown crumbling infrastructure will this time of economic through the means of public not be replaced. protectionism, the thing that sector investment. Yes, I The above entirely stems from creates wealth most is free- concede that it is necessary for the idea that it is purely inland trade (Nordstrom et al., 2000) . establishing an economic areas that are most important In the 1800s, free-trade environment that is more for economic development. powered the industrial conductive to the creation of This is something that has been revolution and pulled millions wealth. However, this does not prevailing economic thought in of Europeans out of sedentary necessitate meaningless the United Kingdom ever since poverty and brought them government spending projects. the 1980s and it leads to neglect increases in living standards Look across our world today of coastal communities. The never seen before in human and with the exception of Blue Economy is the first step history. In more recent times, it China, which is unique due to to helping to change this. The is no coincidence that the its oppressive political system, idea is that there is no Chinese and Indian poverty the best economies around the alternative to the neoliberal reduction miracles have come world are doing so by cutting social-market model that about at a period of time where both taxes and regulations. The entrenches inland areas to the both nations encouraged free- United States, India, Estonia detriment of coastal areas. trade (albeit with caveats). and many others are following Indeed, this is a problem that Through free-trade consumers this route and it is clear that this benefit from cheaper goods not only pervades in the United is the means by which creating allowing them to increase their Kingdom but actually across wealth is easy, effective and standard of living and firms the entirety of the Western long-term. World. Understanding and benefit through increased using the Blue Economy, as will competition pushing them to It is clear therefore that the two be explained later, is the first innovate. Within the European major caveats that should be step to moving towards a more Union, this vision of free-trade sought by governments around enhanced mode of economic is heavily skewed. The Customs the world is free-trade and development. Union turns the EU into a huge limited government. This protectionist bloc that limits principle can be applied to Creating Wealth? consumer choice and increases post-Brexit Britain using the To most economists, this prices for British blue economy and the results question is a non sequitur. consumers (Wonnacott and of this can be insightful. Wonnacott, 1981). With regard There is not one thing that The Blue Economy creates economic growth they to the blue economy, the will argue, but rather, it is a customs union, and the UKs The Blue Economy is a rather combination of favourable membership of it prevents the nebulous term shrouded by factors and a bit of good luck United Kingdom from seemingly economic jargon. It that creates wealth and enacting a free-ports policy that is however, a rather simple aspiration. As a social scientist, would radically transform these concept. The Blue Economy

MEDC Economic Digest March 2019 u37 Cover Story vision attempts to fully utilise down the country that have Within the EU free-ports are the resources of the ocean, struggled to recover from impossible to achieve on the from primary resources such as deindustrialisation. The level as they are used across the fisheries to trade based groundwork and basic ideas rest of the world. The biggest resources such as ports and behind the idea of the blue- problem is the customs union. packages. This is a simple term economy and how it would be The Customs Union plants an that is easy to use for policy applied to a post-Brexit arbitrary tariff upon all goods makers. It is not necessarily a economy have been conducted from outside the Union with way out of traditional in an excellent report by Rishi which the EU does not have a economic models of growth Sunak, MP and published by free-trade deal with. While such as Swan-Solow but rather, the Centre for Policy arguably this allows for faster it is a complement to such Studies (Sunak, 2016). Anyone and swifter trade across the models and allows for a interested in the idea of free- Union, it blocks out goods and radically different perspective ports should look no further services from outside the on economic growth. For a than to read the report to Union. It is therefore United Kingdom that is leaving complement this article. theoretically highly difficult to the European Union, it is set up a free-trade zone within a A free-port is a special customs union. It is possible, essential to get a grasp of the economic zone where normal butwethenrunintosome concept of the Blue Economy customs tariffs and regulations practical issues. For a free trade to ensure that we have an do not apply. There are over zone to be agreed, all the economy that is future proof. 3000 such free-ports around countries of the customs union As an island nation, the United the world that not only offer would have to agree to giving Kingdom has no choice other concessions on trade for one of its competitor than to turn to the vast businesses, but also offer economies a clear economic expanses of the ocean as a radically positive investment advantage. This, means of trading as it has incentives such as tax-breaks understandably, does not successfully done for hundreds and R&D investment. Perhaps happen often and has limited of years. Brexit provides three the greatest example of a free- free ports from arriving at the distinct opportunities which port is that of Hong Kong scale they have across the world will allow the United Kingdom which has extremely in the European Union. to be a pioneer in the competitive taxation and low However, as the United implementation of the blue tariffs. Hong Kong is one of the Kingdom is leaving the economy viz: free ports, reform wealthiest territories on the European Union and Customs of fishing, and radical planet today and other free- Union, this Freeport model can divulgence in customs regimes. ports such as the Pearl River now be implemented. Delta and SEEPZ in Mumbai The greatest benefit of Free-ports, in my opinion, are have been the engines for the greatest and most exciting dropping tariffs in entire port economic growth in these regions is the opportunities it of these post-Brexit, blue regions. This is a model that can economy related innovations would bring to rebalance the be easily replicated in the UK UK economy towards the which could be brought in by and can have dramatically the government. This is also north of England and towards positive impacts upon the manufacturing. If we take the the initiative by which the most seaside towns that have been good could be done to improve Port of Tyne as a case study, the ignored by governments for area surrounding the Tyne river the position of cities such as generations. Liverpool and Grimsby up and basin is surrounded by areas of u38 March 2019 MEDC Economic Digest Cover Story relative deprivation such as England and lead to increased European Union's Common South Shields and Sunderland ocean-based trade. This would Fisheries Policy (CFP) has (Beckett, 2014). There is be a radical way to use the Blue decimated this aspect of British already a strong manufacturing Economy to create economic industry. The United Kingdom base in the region due to growth. has the largest underwater fish government schemes to The effects on the people living resources in the European encourage car manufacturing in in these areas would be Union and before joining the the region. However, with transformative. For far too CFP,this was exclusive remit of Brexit, there is increasing long, these regions have relied British fishermen. Upon uncertainty. Modern on service-based jobs that are joining the CFP, this was manufacturing relies on long traditionally lower paying due opened wide to be a collective supply chains that span entire to their diminutive nature. By European resource and this continents. Currently, many contrast, in London and the allowed foreign fishermen to firms run supply chains across South East, jobs in the service fish in what technically are thesinglemarkettaking sector are higher paid. It is British waters. This led in the advantage of tariff free access. essential to diversify the UK 1970s to British fishermen to Setting up free-ports will allow economy and to encourage be forced to fish around Iceland firms to continue to take wage growth in regions outside rather than the far more fertile advantage of this zero-tariff the South East. The people of waters in the North Sea that trade environment as firms will these regions deserve a better surround the United Kingdom. not face tariffs to bring in chance to achieve their dreams This is a pure travesty and has manufacturing materials into in their own regions rather than caused mass damage to the the United Kingdom. The final being forced to move to the British fishing industry. But product can be made in the South East. By extending these post-Brexit, the government United Kingdom tariff free and free-ports and free-trade zones can articulate a fisheries policy be traded to the rest of the to beyond the borders of the based on common sense and world with costs being port, entire regions can be putting British fishermen first. minimised. In regions such as transformed by increased Harnessing the power of ocean South Shields, this reduction in investment and job-creation. resources such as fish can be costs can result in extraordinary This will push wages higher and transformative in regions such investment from foreign firms will allow deprivation to be as Grimsby where the fishing attempting to take advantage replaced with wealth. Brexit fleet has effectively been of better trade terms. This and the blue-economy alone destroyed due to the CFP. would mitigate a huge concern will allow this transformation Another huge problem with the of trade barriers being set up to take place. CFP is that it is utterly post-Brexit and in addition, Fisheries destroying the sustainability of allow investment in areas that the fishing stock in the region require it. The government can Fishing has been a proud through its fishing quotas. Like accelerate this business British tradition that dates back most things envisaged by the investment by offering tax centuries. The waters European Union, the principle exemptions and investment in surrounding our little island are of fishing quotas is a positive R&D to further attract firms to rich with a wide variety of one. It is essential to encourage these free-ports regions. These underwater species that have sustainable fisheries so as to not areas can become the engines been used by British fishermen deplete the rich fishing stock in of growth for the north of to sustain their livelihood. The the North Sea so quickly as it

MEDC Economic Digest March 2019 u39 Cover Story

fish species and have ecological sustainability tax upon fishing Conclusion effects that stretch far greater trawlers when they return to The United Kingdom is on the as the food-chain would be shore and tax the excess fish cusp of radical socio-political severely depleted. The CFP they have caught. This reduces change. Leaving the European fishing quotas provide a limit waste and actually leads to an Union will be a gargantuan task for fishermen to prevent end to the horrendous waste of but it is not one without its overfishing. However, the the fishing resources. Within merits. In truth, if played right, enforcement of this quota the EU, the potential of the leaving the European Union would be hilarious if it were not blue economy and its can act as a launchpad into a so tragic. The stringent quotas sustainability is reduced. new economics that is based now mean that fishermen are However, with the United not only upon the productivity legally obliged to throw away Kingdom now leaving the of in-land areas but also uses fish stock that are surplus to the European Union, the the natural resources of coastal maximum limit. Often, this government has the areas. In this sense, it is however means that dead fish are opportunity to reform the CFP. not enough just to do what is thrown into the sea in a The impact this will have on orthodox. The challenges and wasteful process called 'discard' British fisheries is genuinely difficulties that face the United (Condie et al., 2014) . Fishing radical. For years the industry, Kingdom are far too large to be stocks in the North Sea, which which has been hit with chained by orthodoxy. The blue actually are Britain's territorial regulation after regulation and economy provides an waters, are already being rapidly has been made a mere rump of opportunity for the United depleted. With the discard of its past glory, has now a real Kingdom to effectively use its the CFP, this is only being chance of revival. This has led maritime history, its accelerated. Post-Brexit, the to traditional regions that relied geographical location and rich United Kingdom is in no on fisheries such as Grimsby to ocean resources to turbocharge position to have to accept the be deprived. A revival in trade and fisheries. The many CFP. Not only can the United fisheries can lead to increased issues facing the United Kingdom patrol its own prosperity in these regions Kingdom can be tackled using territorial waters and stop through an increased wealth the blue economy vision and it European trawlers from and lower costs for these is up to the government to be overfishing, we can also reform businesses which theoretically bold to seize this opportunity. It the CFP to create a more can spur economic growth. is time for the United Kingdom sustainable blue economy. This can lead to an additional to leave its period of managed There are many public policy rebalancing effect and when decline; it is time for the United schemes that could radically combined with free-ports can Kingdom to integrate better transform this. Instead of the allow more wealth to be created with the world and it is a well- wasteful discard, the United in regions that need it. managed blue economy vision Kingdom can impose a that can help it achieve this.

u40 March 2019 MEDC Economic Digest MEDC Economic Digest March 2019 u41 Cover Story

Developmento f Navigation In Yamuna-RS ajasthan- abarmati- ( K andla) Link Canal Introduction to Inland Water Transport (IWT) - an eco friendly economic option Cdr. Dipak Naik President & CEO, Naik Environment Research Institute Ltd. (NERIL) [email protected]

The minister for surface transport, Mr. Nitin Gadkari must be admired for his vision and grasp of the subject of surface transport. His recent instruction on reducing hydrocarbon consumption by using water transports for the cars and cargo between NCR and TamilN adu and vice versa is not only worthy of praise, but also that it opens up our eyes to hitherto ignored eco- friendly and economic mode of transportation, which is best suited for our nation. The new government at the centre within such a short time has rightly and actively been taking steps in the right direction on the river front, from the Ganga action plan to use of rivers for inland transport. Water is the essence of life, from the time immemorial the river has nurtured life on our planet. river is the Mother of the mankind, as she has provided us with the most vital source of life - WATER. Major civilizations have flourished on the banks of river. Man has been using river as the main u42 March 2019 MEDC Economic Digest Cover Story source of water not only for Brahamaputra and 1970s and at 5.6% per annum in agriculture but also as a means Champakara and Udyogmandal the 1990s. In 2005, our of transportation. In the post canals. Cargo movement by transport sector consumed 11 independence India with the Inland Waterways in 2017-18 is % of total primary energy growing population pressure, 55.01 million metric tonnes. demand. 78% of this was by successive regimes have Inadequate infrastructural road transport, 11% by exploited the river only for facilities such as depth and aviation, 10% by rail and 1% by sucking power and water out of width required for movement water transport. By 2030, the it, and for washing our sins by of IWT vessels of reasonable transport sector demand will disposing off untreated size for round the year nearly double to 20% of the effluents produced by operation, terminals for loading primary energy demand. industries and the sewage and unloading of cargo and Twenty-five percent of national created by human uses. connectivity with road /rail, and state highways are India, the largest peninsula in navigational aids for safe and congested. Truck and bus world, has a coast line of 6,000 unhindered navigation during speeds average only 30-40 km kms. India's navigable and day and night and shortage of per hour, though the expected potentially navigable inland IWT vessels are the main averages are twice these figures. waterways presently extend to constraints facing the All high-density rail corridors nearly 15,783 kms and development of inland face severe capacity constraints. comprises of rivers, lakes, waterways sector. The rural road network is in a canals, and backwaters. If these Overview of transport sector dire state and most of the rural waterways are developed for in India roads are impassable. navigation with the necessary Good physical connectivity in Environmental Factors infrastructure such as fairway, the urban and rural areas is Inland navigation is most terminals and navigational aids essential for economic growth. appealing environmentally. The the Indian water transport Since the early 1990s, India's basic reason for this is low fuel mode would become the most growing economy has competitive and eco friendly usage and therefore low witnessed a rise in demand for means of transportation. pollution from emissions and transport infrastructure and ability to carry in bulk, thereby India has a number of rivers, services by around 10 percent a reducing handling related backwaters, creeks and canals, year. In India, share of the pollution and congestion. The which have the potential to be transport sector in GDP (gross tables below compare fuel used as cost effective and domestic product) in 1997/98 consumption efficiency and efficient mode of was 7.3% (1993/94 prices). emissions from various modes transportation. Till middle of Road transport and railways of transport. 20th century, IWT had been account for majority of this Need to provide focused used as an important mode of contribution. The transport transportation in various parts sector is also the second largest attention to Inland Water of the country. However the consumer of energy, next only Transport. IWT in an organized manner is to industry and commercial The advantages of water borne significantly seen today only in energy consumption about transportation need to be a few areas e.g. Goa, Assam, 98% of which is in the form of exploited to the benefit of West Bengal and Mumbai, HSD and gasoline grew at the environment and for savings apart from Ganga, rate of 3.1% per annum in the hydrocarbons. Even though

MEDC Economic Digest March 2019 u43 Cover Story

Inland Water Transport (IWT) Fuel consumption efficiency of different transport modes is comparatively a cheaper and Mode Fuel consumption Fuel efficiency efficient means of (litres HSD per tonne-km) (tonne-km per litre) transportation, its share in the Rail 0.011 72.69 domestic surface transport has Road 0.04 21.23 remained at about 0.1 per cent. Inland waterways 0.0056 184.97 Most of it remained within the mining activity in Goa which Emissions from different modes of transport has also (Unit: kg per 100tonne-km) Mode (HCOH) (CO) emissions (NO) emissions Current scenario of inland emissions navigation in India Rail 0.13 0.18 0.51 Total navigable length of Road 0.17 0.53 2.82 inland water-ways in the Inland waterways 0.02 0.06 0.15 country is 15,783 km of which maximum stretch lies in Uttar Pradesh followed by West Bengal, Andhra Pradesh, Assam, Kerala and Bihar successively. Amongst river systems, Ganga has largest navigable length followed by Godavari, Brahmaputra and rivers of West Bengal. Waterways have the unique Barge loaded with cargo Zinc – National waterway No. 1 advantage of accessibility to interior places. The Inland NWDA are Yamuna – mechanism for this project Water Ways Authority of India Rajasthan link canal and the through licensing, has taken up the challenge of Rajasthan – Sabarmati link transportation, tourism and maximising the utility of these canal. Together this canal other allied revenue rivers. If the canal navigation is sysyetm presents a unique opportunities. It must be stated coupled with this then the opportunity for introduction at the outset that this is not an inter-linking project will also of canal navigation system over utopian abstract idea. The generate revenue while saving this 1600 km long corridor. An technical feasibility, alignment on environmental costs. extension of another 240 without displacing any Developmento f Navigation Kilometres rom near Gandhi households and Rapid Environmental Impact In Yamuna-rajasthan- Nagar to Kandla will link this Assessment (REIA) studies for sabarmati Link Canal major port with the heartland of north India. this project are already The National Water completed. (This author was Development Authority Canal Navigation if introduced leading the team doing the (NWDA) is tasked to prepare will not only reduce cost of alignment and REIA and and execute inter-linking of transportation for goods and therefore has first hand rivers in India. Two of the people but will also become the knowledge of the terrain and major links planned by the main source of cost recovery the possibilities) u44 March 2019 MEDC Economic Digest Cover Story

Most developed countries in 1. It should have a minimum stretches of NW-4 &5 under North America and Western depth of 1.5 m; public private partnership Europe, efficiently utilize their 2. It should have a 45 m wide (PPP) mode with viability gap rivers and canal systems for channel; funding scheme through inland transportation of goods 3. It should be continuous Department of Economic and people. Inland Navigation stretch of 50 km except in Affairs and also through Pilot holds an important position in urban areas; Project Initiatives of Asian their tourism industry. In India 4. It should pass through and Development Bank. however the MOWR, CWC, serve the interest of more Salient features of Yamuna- NWDA and the water than one state, connect vast Rajasthan-Sabarmati (Y-R- resources departments of the hinterland and major ports S) link canal state governments, have and connect places not 1. Y-R-S link canal has a total remained focused on served by any other modes length of 1498km. (783km.- development of irrigation of transport; Yamuna-Rajasthan and potential and hydro-power. 5. It should be capable of 715km.- Rajasthan- This was and has been the navigation by mechanically Sabarmati); development imperative to propelled vessels of a reasonable size. 2. Full supply depth and width cater for growing food of Yamuna-Rajasthan link demand. Time is now ripe to canal at its head and tail are look beyond food and power. Present Development by IWAI 7m & 43m and 7m & 28m The National Water respectively considering Development would only be There are three basic side slopes of 1(V):1.5(II); complete if we enlarge its infrastructural requirements 3. Full supply depth and bed function to include water for making a waterway viable width of Rajasthan- transportation for goods and for shipping and navigation. Sabarmati link canal at head people, development of These are (i) navigation channel is 6m. is 41m respectively tourism and consequent with adequate depth and width with side slope of 1.5(H): growth in number of for reasonable size of inland I(V); liveli hood options together vessels, (ii) navigation aids for 4. Y-R-S link canal passes with saving of precious day and night navigation, and through three states viz. hydrocarbon resources. (iii) terminals to provide facility Haryana, Rajasthan and for berthing of vessels, loading Gujarat; Criteria for declaration of and unloading of cargo/ National Waterway Vis a-- 5. Y-R-S is well connected with passenger and connectivity national highways and rail vis the planned canals with road and rail. routes The guidelines formulated by IWAI undertakes development Considering above salient the National Transport Policy and maintenance of IWT features ofY-R-S link canal it Committee Report (1980), for related infrastructure facilities meets all the qualifying criteria development of Inland Water on NW-1, 2 & 3. to qualify for declaration as a Transport in the country have Detailed Project Reports National Waterway. It must made out the minimum (DPR) have been prepared and therefore be suitably modified qualifying criteria for declaring action is being taken to explore with minor changes, to develop a water way as national the feasibility of developing navigation together with waterway. These are as follows : more commercially viable providing water to the arid

MEDC Economic Digest March 2019 u45 Cover Story areas of Rajasthan and Gujrat. The existing planned technical parameters of the Y-R and R–S links are as shown in the table below. These need to be modified marginally to make them qualify for the criteria for inland waterways. It is recommended that the width be increased to provide minimum of 45 meters in the entire length. It is also recommended that a lock system be included at all points where civil structures are necessary. The canal should be extended by another 240 Kms up to Kandla with suitable lock gates to ensure movement of cargo to and from this vital freight corridor. This National canal water way can then be called Y-R-S-K link. Objectives Of Development Of Navigation In Yamuna- Rajasthan-Sabarmati Link Canal: l To grow to water resource development in real sense that is far beyond merely calculating and redirecting surface water runoff by providing the most fuel efficient and eco-friendly transport system. l To depart from traditional water management thinking to water development as the mainstay of employment and revenue generation beyond irrigated agricultural livelihood Fig.1: Location of proposed Yamuna-Rajasthan-Sabarmati link canal u46 March 2019 MEDC Economic Digest Cover Story l To grow from welfare employment potential as passes through Desert oriented, non revenue various processes like National Park and developing generating developmental operation of vessels & water safaris along the objectives to self financed terminals, cargo handling, ship Sanctuary would promote revenue generating building, ship repairs, tourism, tourism further in this region. sustainable project entertainment besides Passenger terminus would objectives. horticulture agriculture and have to be developed for l To generate employment in food processing will need tourists. the remote rural areas where skilled man power. This link Connecting urban centres inhabitants are among the canal has the potential to transform the lives in this The Y-R-S-(K) link canal lowest of low-income would also connect major groups desert from poverty to plenty in the remote rural areas by urban centres like Panipat, l Development of tourism generating scores of economic Hissar, Jaislamer, Benefits of navigation in Y- activities. Gandhinagar, Kandla etc from three states through which it R S- (K) link canal Eco-Tourism Revenue Generation passes viz. Haryana, Rajasthan Major benefit would be in the and Gujarat. This would The irrigation projects hither form of tourism increase trade facilities among to fore have not displayed development. The link canal these centres. efficiency in their cost recovery passes through the vicinity of Economical transport of mechanisms. It has become an tourist attraction places like commodities and accepted practice to treat these Jaisalmer, Jaipur, Udaipur, passengers recovery mechanism flaws, as Jodhpur and Bikaner. social sector compulsion of Developing an artificial lake handle large post independence India. It would help to near Jaisalmer would prove to quantities of cargo,thus However in the new economic be the chief attraction the semi order every public investment reducing traffic congestion on arid conditions. Various road. This is possible as 1 barge must ensure cost recovery and activities like floating efficient revenue generating (1500 tons) is equivalent to 58 restaurants, water sports, etc. large semi trucks (28 tons). mechanism for better could be developed in this lake. sustainability. In utilizing the Y- National Highway Nos. 3, 8, 10 Introducing tourist barges, and 15 cross Y-R-S link canal. R-S-(K) link canal for inland houseboats or shikaras would navigation a directly Many goods are transported be an added advantage. through these highways, which measurable and cash accruing Moreover the link canal also revenue mechanism will be can be transported through made available at marginally this link canal. Thus it would be economical means of additional costs. an transportation of cargo like Employment generation minerals & other bulky dry and Enormous benefits could be liquid raw materials for reaped from the Y-R-S-(K) industries, agriculture link canal once navigation is products, building materials, developed. Navigation as an etc. This would also be one of industry has a huge the most fuel and energy

MEDC Economic Digest March 2019 u47 Cover Story efficient modes of transport. It would be a cheapest means of passenger transportation. Revenue would be generated by way of water borne transport tax from barge owners. (Tax is usually charged per tonnage of cargo) To develop navigation in Y-R-S canal following measures also need to be taken o Develop traffic rules for safe commuting of vessels o Develop night navigation facilities analysis in comparison to other conservation of their tradition o Develop berthing facilities means of transport i.e. roads and natural resources alongside for overnight parking of and railways, details of vessels, a navigable canal. I visualise a vessels identifying areas for developing water resource project, which is o Develop passenger passenger terminus, developing far beyond merely calculating terminals along the port facilities for loading and and redirecting surface water alignment at selected unloading of cargo, etc. would runoff.. far beyond mere locations be necessary. irrigated agriculture. I see a o Develop terminals for transformed development I see a larger yet achievable model which would have loading and unloading dream. I see a complete facilities specifically at changed from non revenue transformation of an otherwise generating pseudo welfare places where rail and road desert landscape into a routes cross the canal and at oriented, developmental throbbing corridor of objectives to self financed market places where prosperous settlements of commodities area exported revenue generating sustainable people earning their pleasures development. and imported along canal and livelihood from alignment Development of navigation in Yamuna-Rajasthan-Sabarmati link canal would prove as an efficient alternative to road and rail for transportation of cargo as well as passenger. However comprehensive studies like other communication and infrastructure in vicinity of canal, major goods transported to and from the area and its vicinity through road and railway network, cost benefit u48 March 2019 MEDC Economic Digest Cover Story

Gas Hydrates: Promising Unconventional Energy Resource Of The Coastal Environment. Dr. N.Satyavani Scientist Gas Hydrate Group, CSIR-National Geophysical Research Institute, Hyderabad, India. [email protected] Abstract hydrates off India, China, and developments indicate that the Gas Hydrates are the most Korea. India produces only role of unconventional promising unconventional 30% of her energy resources like, gas hydrates, energy resource, envisaged as a requirements indigenously, and shale gas, tight gas coal bed plausible alternate energy spends a huge amount of methane is far more significant resource in the future, owing to money in importing the and these resources put their immense energy remaining. In India, this together can meet 80% of the potential. Hydrate sediments research has been headed spear futuristic energy demand. have been found in many by National Gas Hydrate Replacing coal with natural gas Program (NGHP) and two will help mitigate the CO different regions where the 2 required temperature and drilling expeditions have been emissions as natural gas is pressure conditions are conducted, both of which have known to generate the lowest proven the gas hydrate amount of CO per unit energy satisfied. They are normally 2 formed under the conditions abundance in the eastern consumption compared to of high pressure and low margin of India, especially the other fossil fuels. temperature. Gas hydrates are Krishna-Godavari basin. In the Out of all these unconventional believed to exist in large present paper we try to resources, natural gas hydrates quantities worldwide in highlight some of the aspects are considered to play a continental margins of the of this growing field of science, prominent role in the word oceanic regions and in the with special reference to the gas energy scenario, as they are permafrost. Some studies to hydrates of the Indian margin known to possess immense estimate the global abundance settings. potential in terms of energy of gas hydrates suggest that the Introduction reserve. Gas hydrates exist in a total volume of natural gas The energy demand is far greater amount than both locked up in form of gas increasing day by day globally conventional and other hydrates may exceed all known and is expected to increase unconventional resources conventional natural gas significantly in the coming combined and are distributed reserves. Due to their decades. The energy supply globally, manifesting in the significant energy potential, chain is thus, weakening and the permafrost and marine they are being studied advent of renewable energy is environments. It is believed extensively in the last two gathering world-wide attention. that one volume of gas hydrate, decades. During the past five However,theamountof when dissociates at STP years several dedicated deep energy that can be generated releases 164 cubic meters of gas drilling expeditions and other from renewable sources is still and 0.8cubic meters of fresh scientific studies have been far from meeting the energy water (Fig.1a). During the last conducted throughout Asia demand completely. few decades, the energy and Oceania to understand gas Projections of the future potential of the gas hydrates

MEDC Economic Digest March 2019 u49 Cover Story had attracted various research groups world-wide and the country wise research activities 164m3 3 based on the publications is 1m 3 summarized in Fig.1b 0.8m Gas hydrates are formed under high pressure (6-30 MPa- Fig 1a: The immense resource potential of gas hydrates Fig.1b:The country wise exerted by water column research in terms of scientific publications in the field of gas hydrate research (from Chong et al, 2016). >500m) and low temperature and pressure are, however not (Malinverno et al, 2008), (<15°C) conditions, outside of static parameters and are Makran subduction zone (Ojha which the gas and water are in affected by tectonic activity, and Sain 2007), Andaman separate phases. The pressure sedimentation rates, changes in subduction zone (Satyavani et temperature regime of gas the sea level and changes in al, 2008). Occurrences have hydrate formation varies from ocean temperature. been also reported from place to place and in any given Nankai trough region in Japan location the zone in which the Gas hydrates occur in different (Tamaki et al, 2016) , Offshore gas hydrates can be formed and morphological forms, such as Taiwan (Lin et al, 2009), can remain stable is called the disseminated, nodular, layered Norwegian margin (Bouriak et gas hydrate stability zone or massive (Sloan, 1998), and al, 2000) etc., (GHSZ) and is shown in Fig.2 have a diverse distribution for continental margins . An geographically (Fig.3 ) and have Depending on the type and size increase in temperature or been reported from a variety of of the gas molecule that decrease in pressure will result geological settings ranging occupies the water-cage lattice, in the dissociation of gas from the Arctic permafrost, like three types of gas hydrates are hydrates and release of Mallick well, Alaska (Dallimore found in nature, namely et al, 1998) to the continental structure I, structure II and margin settings like Blake ridge structure H. Methane typically (Holbrook et al, 1996), Gulf of forms Structure I gas hydrate Mexico (Shelander et al, 2011), and hence the gas hydrates are Peru margin(Hubscher and sometimes referred to as Kukowski, 2003), Hikurangi methane hydrates as well. The margin (Pecher and Crutchley, other higher order 2010) to the subduction zones, hydrocarbons, if included in like Cascadia subduction zone the water-cage lattice, form

Fig.2: The gas hydrate stability map for the continental margins (after Chand and Minshull, 2003) methane. The depth of the stability zone will increase with the increase in water depth (pressure) and decrease in seafloor temperature or the geothermal gradient (Dillon Fig.3: The world-wide drilled occurrences of gas and Max, 2000). Temperature hydrates and the reservoir types based on the drilling programs (from Ruppel et al, 2011). u50 March 2019 MEDC Economic Digest Cover Story structure II and structure H gas and more methane. Dissolved discontinuity in the seismic hydrates. The two main origins gas moving into sand channel velocity at interface, and hence of the hydrocarbon gases that would result in formation of can also be referred as base of are capable of forming natural microbial gas hydrates by hydrate. Further, the formation gas hydrates are, (i) biogenic diffusion process. of gas hydrates uses up the and (ii) thermogenic. Biogenic Identication water molecules but leaves out natural gases are formed from the dissolved ions, like chloride, The primary indication of the CH4 -generating microbes sulphide, causing an (methanogens), which can be presence of gas hydrates is enrichment of these ions in the characterized by their high either through direct sampling around the gas hydrate. Hence, or by observing a reflection methane purity (C12 /C + >100). many researchers also study the The biogenic methane can be named ''Bottom Simulating chloride anomalies in the formed if the sedimentation Reflector'' (BSR) in the seismic seawater to infer the presence rate is more than 3cm/kyr and image, as shown in Fig.4. A BSR of gas hydrates. if the TOC exceeds 0.5% is a strong acoustic reflection that is observed parallel to the Gas Hydrates from the (Milkov et al, 2002). On the Indian Margins other hand, thermogenic seafloor, cross cutting the natural gases are formed from sedimentary layer and has a It is envisaged that the methane the decomposition of organic reverse polarity when gas within gas hydrates is so matter from fossil origin. In compared to the seafloor. The huge that even 10% production addition to the pressure and BSR is also inferred from a can meet the country's energy temperature conditions, the sharp decrease in seismic requirement for a century. The hydrate stability is affected by velocity along the interface studies pertaining to the Gas the local sediment properties, between overlying hydrate Hydrate identification were such as pore sediment type, bearing sediment of initiated by the Gas Authority sediment permeability, pore anomalously high seismic of India Limited (GAIL) in size and water salinity. While velocity and underlying free gas 1996 under the aegis of the the gas hydrates are stable only containing sediment with low Ministry of Petroleum & under low temperature and seismic velocity. Hence, it Natural Gas. Later, National high pressure conditions (Sloan represents a sharp velocity Gas Hydrate Program (NGHP) and Koh, 2008), additional controls on their stability are linked to pore-fluid chemistry (salinity) and type of source gas. Fault or fracture system that might exist in the Sea Floor sedimentary formation allows for the passage of methane (from the layers below) into the BSR hydrate stability zone, resulting in the formation of gas hydrates. High sedimentation rate causes preservation of more organic matter and Fig.4: The seismic image showing the prominent presence of BSR, that is parallel generation of fewer sulfates to seafloor and also crosscutting the sedimentary strata.

MEDC Economic Digest March 2019 u51 Cover Story was formulated and it became map could fill the data gaps of offshore basins. In this the nodal agency for gas the earlier map and sets a depth expedition the gas hydrate hydrate exploration and window for the formation of samples were recovered mainly exploitation in India. The main gas hydrates. The base of gas from the clay dominated participants of the program are hydrate stability, or the BSR can fractured shales. Subsequently oil industries like the Oil and be precisely identified from the a second expedition was Natural Gas Corporation seismic sections using this map, planned and was executed in (ONGC) Ltd., Oil India even when it is weak and 2015, mainly aiming at Limited (OIL), GAIL, and discontinuous in the seismic identifying the gas hydrates Reliance Pvt. Limited; research image for a given region. occurring in the sand rich institutes like the National Seismic data from the Indian reservoirs. In the second Geophysical Research Institute continental margins like, expedition, NGHP-02, the (NGRI), National Institute of Kerala-Konkan (KK), logging and drilling was carried Oceanography (NIO), Krishna-Godavari (KG), out at 42 sites in the KG and National Institute of Ocean Mahanadi and Andaman Mahanadi basins, of which at Technology (NIOT); and offshore basins has been some locations, the core academic organizations like the analyzed exhaustively to samples were also obtained. Indian Institute of Technology identify the BSRs and the The gas hydrates were (IIT), Kharagpur, and India geochemical, geological, recovered in the sand reservoirs School of Mines (ISM), microbial proxies were of KG basin in NGHP-02 Dhanbad. The entire program extensively studied to identify expedition, further is coordinated by NGHP the presence of gas hydrates by strengthening the exploration wherein a variety of studies research Institutes like NGRI programs. ranging from identification, and NIO. All these studies were The NGHP-01 expedition was estimation of the gas hydrate then consolidated and led to carried out in collaboration resource are being carried out, identify suitable locations for with the USGS and all the in a phase-wise manner. deep drilling and coring. participants of the NGHP.The Directorate General of Two major drilling experiments results in the drilling expedition Hydrocarbons, DGH, has were carried out in the Eastern showed a good correlation with coordinated with the NGHP Margin of India by the NGHP, the gas hydrate predictions that for conducting the seismic namely NGHP-01 and NGHP- were made from the surface exploration studies along the 02 during 2006 and 2015 seismic data in the eastern Indian Margins. Research respectively, that were aimed at margin of India, especially the institutes have essentially locating precise locations for KG basin (Collett et al, concentrated in the areas of the pilot production testing at precise identification of gas 2006).The main outcome of least at one location by 2020. the expedition were : 1. hydrates and their resource During the first expedition estimation, especially in the occurrence of a thick (120m) NGHP-01, the gas hydrate hydrate deposit in fractured Indian continental margins. An logging and drilling was carried updated gas hydrate stability shale, 2. significantly thick out at 21 sites and some of (340m) and deep (600mbsf) thickness map has been them the gas hydrate cores were prepared (Fig.5) for the Indian occurrence of gas hydrate also obtained. The gas hydrates deposits in the volcanic ash- margins by including the new were recovered in the core data that was generated during rich sediments of the Andaman samples in Krishna-Godavari, offshore basin. The methane the last 15 years. This updated Mahanadi and Andaman u52 March 2019 MEDC Economic Digest Cover Story recovered in the hydrate basin interconnected OBS deployments were made deposits was found to be depositional system. In the in each basin to study the microbial in nature and of Mahanadi basin, it was found velocity structure of the gas structure I type. Some evidence that the availability of gas to hydrate bearing sediments in of thermogenic hydrates was charge several of the the region. A systematic found in Mahanadi and discovered reservoir systems is analysis of the seismic and the Andaman offshore basins. a limiting factor for the OBS data, has brought out the These studies gave an impetus formation of highly prospective zones of gas for strengthening the research concentrated gas hydrate hydrates in both the basins efforts in the field of detection accumulations. Preliminary (Sain et al, 2012). From the (Satyavani et al, 2008; Shankar work is also underway on the available MCS data and by et al, 2010), and quantification planning for a future gas studying other parameters like (Shankar and Sain, 2007; Ojha hydrate production testing TOC content, sediment and Sain, 2007; Sain and Ojha, program that will likely involve thickness and the rate of sedimentation, gas hydrate 2008; Ojha et al., 2010) of the one or more of the gas-hydrate- presence cannot be ruled out in gas hydrate reserves. Gas bearing sand reservoir systems the Cauvery and Kerala- hydrates have not been discovered during NGHP-02 Laccadive basins. recovered from the KK basin (Kumar et al, 2016). in the drilling expedition. In the endeavor to study the However, various studies that To further the studies seafloor proxies like were carried out by researchers pertaining to gas hydrates in the chemosynthetic habitats, (Satyavani et al., 2005; Ramana Eastern margin of India, a methane expulsions, etc., the et al., 2006; Poropokari et al., seismic survey was carried out National Institute of Ocean in the KG and Mahanadi basin 1993; Veerayya et al., 1998;) Development has developed a of India during 2010, under the indicate the presence of gas remotely operated vehicle aegis of the Ministry of Earth hydrates, even though in a (ROV). This is operational at Sciences (the then Department minor quantity in Saurashtra water depths of 6000m and has of Ocean Development). In found chemosynthetic habitats and KK basin in the western this survey a total of 7500 line margin of India. at a depth of 1017m in the KG km of MCS and 880 line km of basin (Ramadass et al, 2010). The NGHP-02 expedition was OBS data have been acquired in carried out in 2015 in the KG both the basins. A total of 25 to be continued Page 63 basin and Mahanadi basin, wherein around 42 sites were drilled in 147 days. Gas hydrate occurrences were reported from the sand layers, which are considered favorable for the exploitation purposes. The existence of a fully developed gas hydrate petroleum system was established in Area-C of the Krishna-Godavari Basin with the discovery of a large slope- Fig. 5: Gas hydrate stability thickness map (Sain et al., ) along the Indian shelf. The dotted line shows the Exclusive Economic Zone (EEZ)

MEDC Economic Digest March 2019 u53 Cover Story

BlueEO conomy pportunities from MCF arine apture isheries Dr. E. Vivekanandan Fisheries Consultant, Sarathy Nagar, Velachery, Chennai 600 042 [email protected]

1.0 Introduction protein, essential micro- and economic well-being of the Sustainable fisheries can be an nutrients and omega-3 fatty coastal communities who essential component of a acids. depend on fish for their way of prosperous blue economy. In 2.0 Economic challenges in life. It has been assessed that India, the value of annual global marine fisheries the global marine fish stocks marine fish landings from fished at biologically While marine fisheries unsustainable levels have capture fisheries was Rs 52,807 worldwide represent a major crores at landing centre level increased from 10% in 1974 to economic activity (US$ 130 33% in 2016 (FAO, 2018). and Rs 80,018 crores at retail billion from first sale of global level in 2017 (CMFRI, 2018). Fisheries tend to suffer because capture fisheries production in of fleet over-capacity, leading The products from fisheries are 2016) and provide employment used in a wide variety of ways, to harvesting the fish stocks to 40 million people (FAO, beyond their ability to recover. ranging from subsistence use to 2018), marine fisheries are not international trade as highly yielding their full economic World Bank (2017) analysis sought-after and highly-valued potential. The world's fish indicates that the global marine items. The annual earnings resources are suffering multiple fisheries is losing substantial from export of marine effects of heavy exploitation, economic benefits due to products (including environmental degradation, suboptimal management. The aquaculture) has crossed US$ 5 pollution and climate change. economic loss (termed as billion and is growing. In Increasing fishing effort, “Sunken Billions”) estimate for addition to being a key source overfishing and 2012 is about US$ 83 billion (in of economic security, marine overcapitalisation as well as 2012 prices). The largest source fisheries provide employment unsustainable fishing practices of the estimated economic loss to one million people directly over the last 50 years are is the high cost of fishing due to engaged in fishing and another pushing many fish stocks to the excessive fishing effort and one million in support activities point of collapse. Overfishing depressed fish stocks. This such as boat building and occurs when more fish are single item represents over half maintenance, net fabrication, caught than how much the fish of the total estimated fish processing, trading and population can replace through economic loss. The other export. Women represent the reproduction and growth. sources of economic loss are majority in secondary activities Gathering as many fish as the reduced average price of related to fish processing and possible may seem like a landed catch due to marketing. Marine fisheries also profitable practice, but disproportionately diminished helps meeting the nutritional overfishing has serious landings of high-value fish and needs of a large number of consequences. The results not reduced quality of landed people who rely on fish as an only affect the balance of life in catch, which represent about important source of animal the oceans, but also the social one-third of the loss; while

u54 March 2019 MEDC Economic Digest Cover Story reduced harvest levels due to "natural capital" that provides relationships and therefore reduced global fish populations provisioning services (food) represent one way of tangibly account for the remainder. from the wild, improves integrating nature into Three alternative paths are livelihood of dependent decision-making. considered by the World Bank communities and economies. The focus therefore is on to reduce the economic loss in Framing fish as natural capital is services or flows that natural fisheries: (i) Fast path— a way of looking at the living capital generates and provides Fishing effort to be quickly resource from an economic value to business. The four key reduced to the optimal level perspective. This approach entry points for creating after an initial period of fishing focusses on the value that living comprehensive improvements closure. (ii) Moderate path— resources (the 'stocks') provide in services from fisheries are Fishing effort to be reduced by to the society by supplying investments in governance, 5 percent annually until it nature's goods and services (the technology, markets and reaches the optimal level. (iii) 'flows'). The natural capital finance. Investing in improved Slow path- Fishing effort to be approach views the fish that governance will create a reduced by 1 percent annually, generate a flow of products and pipeline of investable but this will take a very long services. Here, fish stock opportunities to grow the blue time for the fish stocks to biomass is the natural capital, economy in a way that benefits recover. which generates flows in the national economies and local communities, while protecting The situation prevailing in form of growth and reproduction and provides the resources for future growth. India on economic Effective governance is an performance of marine provisioning services. The surplus production generated essential condition to promote fisheries is almost similar to the sustainable management of global trend creating economic, by growth and reproduction contributes to the fishery and is fisheries resources, and social and ecological problems ensuring resilience, which in of great complexity. Due to the of benefit to fishing and related businesses and to the society turn contributes to building reasons mentioned above, community resilience against there is a need for fisheries (Fig. 1). The level of fishing backflows determines the various stressors, including management to control the overfishing. Effective fishing capacity (input control) volume of fish stocks. Natural capital approaches involve governance will also help create and/or setting restrictions on an enabling environment for understanding, measuring and the catch (output control). responsible private sector From the point of view of assigning values to these management, capture fisheries Fig. 1. Benefits derived from natural capital would be successful if they provide maximum quantities s s of seafood in an ecologically, Surplus producon economically and socially (Natural capital) (Benefits to business & society) sustainable manner for (Provisioning services) indefinite periods of time. 3.0 The natural capital approach Fish is a renewable resource, but with a limit. It is the largest

MEDC Economic Digest March 2019 u55 Cover Story investments in the value chain Some of the management Act of State Governments, but from fish landings to measures that will help in to achieve desired results, consumption by reducing risks enhancing fish stock biomass implementation of these and providing incentives for are given in Table 1. These measures needs to be innovation and will enhance measures are followed in many improved. the contribution of fisheries countries. In India, some of Governance enhancements and other service sectors to the these measures are included in should include focus on macro-economy. the Marine Fishing Regulation

Table 1. Management measures for enhancing fish stocks, flows and values Methods Measure Actions Desired effects

Restriction of Input control Reduction of fishing boats, Regulating Relieving fishing pressure fishing effort fishing efficiency, Strict registration and licensing

Closure of fishing Input control Area allocation, MPAs, fish refugia, No - Improving fish abundance areas take zone, fish sanctuary and biomass in closed areas

Closure of fishing Input control Closure during spawning season Protecting spawners, season improving recruitment

Minimum mesh Input control Specification of minimum mesh size; Protection of juveniles; size/Minimum Ban catch, landings and trade of species Reducing low-value Legal Size (MLS) below MLS bycatch

Prohibiting Input control Ban on harmful fishing gear and Improving fish selected fishing practices abundance/biomass and practices health of ecosystem

Species protection Input control Place Endangered, Threatened and Recovery of ETV species Vulnerable (ETV) species under and health of ecosystem Protection Act

Catch quality Output control Ban on landing and trade of low quality Improving the quality of fish traded fish; protecting consumer health

Total Allowable Output control Establishing maximum fishing limits Maintaining fish stocks at Catch and during a timeframe for each species or above maximum Individual Quotas sustainable yield (MSY)

Certification/ Output control Linking fisheries products to their Encouraging eco-friendly Labelling production process and sustainable fishing practices

Trade restrictions Output control Restricting import/export of fish from Maintaining fish stocks at illegal, harmful fishing practices or above MSY u56 March 2019 MEDC Economic Digest Cover Story including and empowering Building on market demand for wastage and destructive fishing local communities. Analysis sustainable seafood can create practices by promoting and results of fisheries incentives for good practices responsible fisheries practices, rebuilding efforts around the and drive new investment effective and integrated world have demonstrated that opportunities related to fisheries monitoring, and adopt when local communities and sustainably managed fisheries. the ecosystem approach to fishers have a voice in setting 4.0 Approach to add to blue fisheries management, thus policy and management growth from marine fisheries securing the contribution of guidelines, these rules are much in India fisheries to national economic more likely to be followed and and social goals and to the Taking into account the global attainment of food security. create positive changes. marine fisheries situation, we Empowering local have to address the following In addition to fishing-related communities also means questions to add to blue growth stresses, the asset base of the clarifying tenure and resource from marine fisheries in India: oceans has been eroding rapidly access privileges, but in order to because of pollution from l be effective, these must be What are the issues? land-based sources, l accompanied with the capacity What are the opportunities degradation of habitats, climate and resources to take advantage in marine capture fisheries change, increase in hypoxic of these rights. for blue growth? areas or “dead zones”, -Is there scope for increasing expansion of invasive species Use of science, data and production further? technology is critical to and ocean acidification. The -Is there scope for increasing negative impacts from these underpin governance reforms the economic performance? anthropogenic stresses call for and shape management l How to address them? decisions. Without credible an integrated response and an information on the state of the 4.1 Issues in marine sheries urgent transition of fisheries resource in a given fishery, and Marine fisheries in India faces a towards a sustainable, inclusive how quickly fish populations more complex and challenging and resource efficient path. can be expected to grow and operating environment (large 4.2 Opportunities in marine recover, it is impossible to human population, long capture sheries for blue design effective fisheries coastline, complex stakeholder growth conservation and management groups and institutions, huge measures. This basic Is there scope for increasing traditional fisheries, poor production further? knowledge about the status and monitoring and surveillance potential for recovery of a systems, etc) than in many Marine fish landings have fishery is essential for decision- other countries. Direct and increased from 0.5 million making and to facilitate private indirect evidences show that tonnes (m t) in 1950 to 3.8 m t in and public investments in marine fishery resources in 2017. This 7.5 times increase fisheries governance, vessel India are subject to overfishing, was possible due to increasing tracking, sea safety, value wasteful fishing practices and demand for seafood, skill of addition and processing. excess capacity, resulting in fishing communities in fishing Improving market reduced yields and economic and economic profitability of infrastructure and access can returns. It is important to make fishing operations, which led to create more sustainable optimum and sustainable use increase in the number and outcomes that benefit the poor. of the fishery resources, reduce efficiency of fishing craft and

MEDC Economic Digest March 2019 u57 Cover Story gear, expansion of fishing species, the yellowfin tuna, has strengths provided by an operations to offshore fishing exceeded the Maximum experienced labour force, a grounds, improvements in Sustainable Level (MSY) in the long history of fishing, good infrastructure facilities such as Indian Ocean. The IOTC has local examples of fisheries fishing harbours and recommended that the catches management, and expanding processing plants, and other should not increase beyond the global and domestic demand support provided by the present level in order to bring for high quality marine fish governments to develop the the stock to biomass levels that products. Marine fisheries can sector. However, recent trends could sustain catches at the become more highly integrated in marine fisheries is not MSY level in the long term. with India's growing rural showing encouraging signs. This finding of the IOTC economy and the wealth The annual growth rate in assumes significance to India generated can help provide catches from coastal fisheries which is taking measures to coastal communities with new has stabilised in recent years; a increase tuna catches. As the opportunities to engage in this few fish stocks are showing yellowfin tuna stock in the growing economy. signs of overexploitation in Indian Ocean is considered as a The National Policy on Marine specific locations; fish scouting single stock and increased Fisheries 2017 (NPMF 2017) time has increased, leading to catches in one country will lead has envisioned a reform higher costs of fishing. The to decrease in overall stock process by shifting the Potential Yield estimates show biomass of the species, it is management approach from a that scope for further increase necessary that India takes conventional goal (increasing in catches may not be possible cautious steps in promoting the fish catch through from coastal fisheries offshore fisheries in the Indian expanded capacity and changes (DAHDF,2018). EEZ. in technology, where users On the other hand, the Scope for increasing operate in an open access Potential Yield estimates economic performance system), to one based on improving the productivity of indicate the opportunity to India's marine fishing sector increase catches of oceanic fish stocks, maximising net has the potential to develop a benefits, and improving equity species like tunas and tuna-like more valuable asset base with a management system. fishes from offshore areas (building more productive fish This approach has a goal of within the Indian Exclusive stocks, viz., the natural capital); achieving the Maximum Economic Zone (EEZ). Based generate a higher level of Economic Yield (MEY) from on these estimates, the Central sustainable net economic, sustainable fish production, and State governments are social and environmental supported by more effective encouraging introduction of benefits in the future (capturing management systems including multiday vessels to promote the inherent value of more well-defined resource access tuna fisheries by offering productive fish stocks); and rights for stakeholders. It also subsidies for boat improving the distribution of builds on progressive construction. However, the these benefits (providing for management prescriptions Indian Ocean Tuna better equity among associated with Ecosystem Commission's (IOTC) stakeholders) (World Bank, Based Fisheries Management, Working Party on Tropical 2010). India's marine fisheries promoted by the Food and Tunas (WPTT) has assessed could show a better Agriculture Organisation that catches of the prime performance by building on the (FAO). Transitioning to this u58 March 2019 MEDC Economic Digest Cover Story reform process and promoting and/or captured by the losses and waste along the sustainable level of fishing public fisheries value chain by adding value would prove difficult, but the management agency to to fishery products to benefits would far exceed the support new economic generate jobs and economic costs. activities in coastal growth; and communities. To implement the NPMF 2017, l supporting research to a longer-term implementation (iv)Collective decisions are improve understanding of plan is needed to address taken about how to generate ecosystem structure and critical policy issues such as net benefits, how to share functioning, and the reducing the current these benefits, and how to possible impacts of climate overcapacity of fishing effort, use them. change on resources and allocating more secure fishing ()v Developing and biodiversity. rights to stakeholders, and implementing a more By following this approach, it is mitigating any negative impacts effective fisheries possible to increase fish on stakeholders if fleet or management approach production as well as improve capacity reductions occur, based on net benefits is a the economic performance of largely for inshore fishing. The long-term and challenging fisheries. The Working Group goal with many intermediate key features of fisheries also stated that blue growth will management that could steps required to lay the groundwork. be sustainable and long-lasting maximise net benefits are as only if all stakeholder groups follows (see also World Bank, The proposed transition in across fisheries and along the 2010): management approches value chain are engaged in it (i) The inherent wealth in fish raises the issue of how to and work together in a resources is represented by balance growth with comprehensive and the resource rent, or net conservation. At the Global coordinated way. benefits from harvesting Ocean Summit for Food Security and Blue Growth, a 5.0 Role of private sector in fish. In the absence of blue economy from fisheries effective management, fish Working Group stocks are usually (http://www.globaloceansa Blue economy is running ctionsummit.com) overexploited and potential business on water. The private examined the theme resource benefits are sector has a leading role by “Balancing Growth and dissipated. investing throughout the entire Conservation” and production, value chain and (ii) An effective management suggested that capture system can reduce fisheries would add to blue governance, and could be the investments in excess growth by increasing fish driver of growth. Small-scale capacity, lower operating production including fishing communities may also be considered as members of costs, and increase l restoring overexploited and the private sector and invest in productivity and unit prices depleted stocks and because of larger stocks and their own communities. In protecting/restoring critical addition to fishing better quality fish, that leads habitats; to higher net benefits. communities, there is great l reducing fishing capacity scope for entrepreneurs to (iii)The net benefits can be and creating alternative job invest in fisheries. In developed capitalised into the value of opportunities; defined fishing-use rights, countries the transition to more l eliminating existing huge sustainable fisheries has been

MEDC Economic Digest March 2019 u59 Cover Story largely funded by development customs arrangements and collaboration through these agencies and philanthropic logistics infrastructure. arrangements can mitigate risks sources of money. While these 5.2 Improving food safety and for the private sector that would types of funding are not quality otherwise prevent them from prevalent in developing finding solutions to key countries, a growing number of Small-scale fishers who want to practical issues. investors are looking for export find it increasingly difficult to clear food safety and 5.5 Improving information opportunities in developing and communication countries as well to support quality hurdles. Food safety and positive social and quality standards can act as Market information systems, environmental impacts. The barriers to trade, but they can transaction platforms and apparent failure to use private also catalyse improvements and information service provision sector in strategically important make the products competitive are possible areas for private areas reflects institutional and in high-value markets. Helping participation, as access to organizational weaknesses or a small-scale fisher folk to meet timely and reliable market lack of experience and production standards and information is increasingly understanding of private sector operating certification, as well important for small-scale as auditing or traceability opportunities. The following entrepreneurs and fishers. requirements, may be initiated are a few opportunities for Dissemination of fish market by the private sector with investment by the private prices through mobile phones oversight and regulation by sectors (see also Weirowski and to fishing villages provides government partners. Hall, 2008): extensive rural benefits at low 5.3 Improving sector- cost in India. Other 5.1 Improving access to specic infrastructure opportunities are weather national and international services warning and advisories on fish markets availability disseminated Postharvest losses of wild- Small and medium-sized through the information caught fish are high in India. systems. fisheries often struggle to The lack of elementary market their products as processing or cold chain 5.6 Improving capacity demand for product quantity facilities in majority of fishing building and extension and quality increases. Serving harbours and fish landing services national or international centres causes much of this There is great potential for markets often requires waste. PPPs that support private companies to form improved supply chain decentralized fish collection, partnerships with public arrangements and effective storage and transport systems institutions to support marketing campaigns. Small could improve matters in many education and training. and medium-sized enterprises locations. Demonstration plants, national often have limited contacts or regional training centres, with the larger international 5.4 Technology development and research vocational training programs, food supply and marketing and e-learning courses for system. They need support to Partnerships between publicly entrepreneurs and government enter these global supply funded national research employees may all be cost- chains. This support may institutes and private sector are effectively provided under such include help with competitor key drivers of technological arrangements. Privately run analysis, export regulations, progress. Institutional extension services working u60 March 2019 MEDC Economic Digest Cover Story under PPP arrangements, with chains. At present, there is only FAO, 2018. The State of World government setting the a limited integration with Fisheries and Aquaculture – regulatory framework and development partners on one Meeting the Sustainable monitoring standards, may hand, and environmental Development Goals. Food and serve the fisher folk more agencies and organizations on Agriculture Organisation, efficiently and effectively than the other, when addressing use Rome, pp. 210 . public services. and management of fisheries. Weirowski, F. and S.J. Hall. There is a need for a much 6.0 Conclusion 2008. Public-private stronger private sector partnerships for fisheries and If blue economy goals are to be participation with emphasis on aquaculture: Getting started. achieved, food security, coherence in fisheries WorldFish Center Manual livelihoods and economies development. based on fishery resources Number 1875. The WorldFish References need to be assured. For this, Center, Penang, Malaysia, pp. sustainable management and CMFRI, 2018. Annual Report 14. utilization of resources must be 2017-18. Central Marine World Bank, 2010. India a priority. Realising the full Fisheries Research Institute, Marine Fisheries - Issues, potential of marine fisheries Kochi, pp. 302 . Opportunities and Transitions requires a paradigm shift to DAHDF, 2018. Report of the for Sustainable Development. embrace a new, responsible and Working Group for The World Bank, New Delhi, sustainable approach that is Revalidating the Potential of pp. 101. more environmentally, socially Fishery Resources in the Indian and economically friendly. World Bank, 2017. Overview: Exclusive Economic Zone. There is need for effective The Sunken Billions Revisited: Department of Animal management and Progress and Challenges in Husbandry, Dairying and implementation measures, Global Marine Fisheries. World Fisheries, Ministry of regulation of fishing, control Bank Group, Washington, pp. Agriculture, Government of access, and strengthening value 99. India, pp. 69 . to be continued Page 54 Gas Hydrates: Promising Unconventional Energy Resource Of The Coastal Environment. Dr. N.Satyavani Scientist Gas Hydrate Group, CSIR-National Geophysical Research Institute, Hyderabad, India. [email protected] Recovery The recovery of gas hydrates in-situ is a big challenge as the main focus is on creating the conduit for the flow of the gas from the hydrates sediment. Unlike the conventional resource, the extraction from gas hydrates is fundamentally different and gets tricky. This is because the gas molecules in the hydrate reservoir are trapped within cages formed by water molecules by van der Waals forces in molecular level and the recovery techniques involve the dissociation of the natural gas hydrates for the release of the gas. Three most commonly studied techniques are (i) thermal stimulation, (ii) depressurization and (iii) inhibitor injection. Thermal stimulation and depressurization techniques mainly focus on altering the local P–T conditions in such a way that the methane hydrate is no longer stable and dissociates into water and gas; whereas chemical inhibitor injection method involves introduction of chemical that can alter the phase boundary of hydrate system such that the hydrate dissociates at the in situ conditions.

MEDC Economic Digest March 2019 u61 Cover Story

Mariculture: a sustainable and lucrative alternative for open access fishery Mr. Kiran Kumar. R. Patil Mr. Chinnappa.B Mr. Sowmya H.S Department of Agricultural Department of Agricultural Department of Agricultural Economics Economics Economics [email protected] Mr. Anand. N Department of Forestry University of Agricultural and Horticultural Sciences Shivamogga - 577 225

Introduction a sustainable approach in the commercially available at Rajiv Open access fishery is Udupi district of Karnataka. Gandhi Centre for considered as the major source Methodology Aquaculture, Tamil Nadu. The fingerlings of red snappers are of supply of fish in India. The In the state of Karnataka, three gap between demand and wildly caught by the fishermen coastal districts are of immense from the estuaries. Different supply for fish is exacerbating. importance from the view In order to bridge the gap, sized cages are put to use by the point of fishery. They are fishermen. Two types of cages fishermen have resorted to Uttara Kannada, Dakshina indiscriminate fishing without are prominent in the region viz., Kannada and Udupi. Among small and large. The common giving due consideration for the districts, Uttara Kannada is their breeding/biological practice among fishermen of having more number of Uppunda region is to culture recruitment. Indiscriminate estuaries i.e., 13 estuaries with fishing has got a further fillip sea bass and red snappers in two 4200 ha of estuarine area small and one large cage. The due to the intervention of followed by Udupi with eight mechanized boats. The information on capital estuaries covering 1885 ha and investment made on the cages, extreme pressure on natural Dakshina Kannada with five fish stock causes extinction of number of fingerlings reared, estuaries covering 1140 ha. In labour in mandays required to species. It is not considered as a the estuaries, Cage culture is sustainable move on the part of perform various operations prominent in Udupi district of such as feeding, harvesting and fishermen community. In order Karnataka. Young fishermen to sustain their livelihood cleaning of cages, quantity and community of Uppunda region type of feed fed to fish, and through their community based of Udupi district are occupation, fishermen should medicines provided to fishes to considered as pioneer in cure prominent diseases was have to find such an alternative practicing mariculture. They which reduces pressure on elicited from six sample have formed an informal group respondents following natural stock on one hand and to carry out mariculture. The creates a profitable mariculture in two small and informal group works on the one large cage system (2S+L). environment on other hand. principle of cooperation. The Results Culturing fish in cages has group is named after the fish come as a handy alternative to species reared by the 2S+L system enabled fishermen. It is popularly called community as Sea bass group. fishermen to practice both sea as mariculture. The present Sea bass and red snappers are bass and red snappers. Sea bass study was an attempt to assess the species reared in the cages. are cultured upto six months in the profitability of mariculture, Sea bass seeds or fingerlings are small cages and later for further u62 March 2019 MEDC Economic Digest Cover Story development and attainment Table 1: Capital investment made on cages of desired body weight. Half of the population was retained Particulars Qty Rate Value in one of the small cages and I. Component wise investment made on two Small cages other half was transferred to 1. Cage frame 16 1200 19200 (14.29) large cage. One small cage, 2. Cage bag which are idle was used for a) HDP outer mesh 15000 (11.16) culturing red snappers. The b) Inner mesh (Kg) 20 450 9000(6.70) fishes are reared for 18 months c) Hapa cage 10000 (7.44) to attain desired body weight. d) Nylon ropes (3mm) (Kg) 6 250 1500 (1.12) The capital investment made e) Rod with plastic (8 mm) (Piece) 24 400 (0.30) on two small cages came to Sub total 35900 (26.72) Rs. 71100 (Table 1). The 3.Floating system investment made on cage bag a) PVC pipes (Length) 6 1000 6000 (4.46) was found to be highest at Rs. b) Cans (No.) 8 250 2000 (1.49) 35900 followed by cage frame Sub total 8000 (5.95) (Rs. 19200), floating system at 4. Service system 2 1000 2000 (1.49) Rs. 8000, labour at Rs. 6000 and 5. Labour 12 500 6000 (4.46) Investment on two small cages 71100 (52.91) service system at Rs. 2000. II. Large cage Similarly, the investment on 1. Cage frame 12 1200 14400 (10.72) large cage came to Rs.54330. 2. Cage bag The component wise a) Outer HDP mesh 11830 (8.80) investment came to Rs.14400 b) Inner mesh (Kg) 16 450 7200 (5.36) on cage frame, cage bag (Rs. c) Hapa cage 5000 (3.72) 25930), Rs.6000 on floating d) Nylon ropes (3mm) (Kg) 6 250 1500 (1.12) system, Rs.1000 on service e) Rod with plastic (8 mm) (Piece) 24 400 (0.30) system and Rs. 7000 on labour. Sub total 25930(19.30) The investment on common 3. Floating system items such as mooring system a) PVC pipes (Length) 4 1000 4000 (2.98) and anchoring system came to b) Cans (No.) 8 250 2000 (1.49) Rs. 2500 and Rs. 3250, Sub total 6000(4.47) respectively. The total 4. Service system 1 1000 1000 (0.74) 5. Labour to prepare cage 7000 (5.21) investment made on 2S+L Investment made on large cage 54330 (40.43) came to Rs. 134380. III. Common investment made on both Economics of mariculture the cages of sea bass 1. Anchoring arrangements a) Rope nets (Kg) 5 250 1250 (0.93) The economics of mariculture b) Labour for anchoring arrangement with of sea bass in two small cages sand 4 500 2000 (1.49) and one large cage is presented 2.Mooring system in Table 2. The variable cost a) 14 mm ropes (Kg) 10 250 2500 (1.86) 3. Nylon fishing net or dip net for incurred on sea bass harvesting(Kg) 4 500 2000 (1.49) production came to 4. Round Scale for weighment 1 1200 1200 (0.89) Rs. 486918.60 (87.34). Of the Sub total 8950 (6.66) total variable cost, feed was Total investment 134380

MEDC Economic Digest March 2019 u63 Cover Story highest at Rs. 280890 (50.37%). Table 2: Economics of mariculture of sea bass The trash of fishes was used as I. Variable cost moist/ semi moist feed in Particulars Qty Rate Value mariculture. About 18726 kg of trash of fishes was used as 1) Seed 1875 40 75000(13.45) feed for 18 months. Next major 2) Feed cost item was labour at Rs. Upto 2 months 1125 15 16875(3.02) 77968.75 (13.97%). Mariculture is labour intensive 2-6 months 3037.5 15 45562.5(8.17) requiring 155.94 mandays of 6-18 months 14563.5 15 218452.5(39.18) labour. Labour performs feeding, cleaning of cages, Sub total 280890 supervision and harvesting. 3) Labour Feeding is considered as labour a) Feeding 135.9375 500 67968.75(12.19) intensive as it involves cleaning 6000(1.07) and chaffing of fish trashes b) Cleaning of cage 12 500 4000(0.71) 8 before using as feed. The c) Harvesting 500 77968.75 procurement of fingerlings was Sub total found to be the other major cost item at Rs. 75000 4) Medicine 890(0.16) (13.45%). The interest on 5) Interest on working 52169.85(9.35) working capital at 12 percent capital @12% rate of interest per anum came to Rs.52169.85 (9.35%). With Total variable cost 486918.6(87.34) regard to fixed cost, II. Fixed cost depreciation on cages formed 1) Interest on fixed 14850.90(2.66) the major component at Rs. capital @ 12% for 18 55676.25(9.98%) followed by months interest on fixed capital at Rs.14850.90 (2.66%). The total 2) Depreciation 55676.25(9.98) cost incurred towards Total xed cost 70527.15(12.66) production of sea bass came to Rs.557445.75. The yield III. Total cost (I+II) 557445.75 realized after duly accounting IV. Returns for mortality @56% at 2.7 1) Yield 56 % survival& 2835 kg/fish came to 2835 kg. 2.7 Kg/ fish Gross returns obtained at the market price of Rs. 430/kg 2) Price per Kg 430 came to Rs.1219050. The cost 3) Gross returns 1219050 incurred and net returns realized per kg of fish came to 4) Net returns 661604.25 Rs. 196.63 and Rs. 233.37, 5) Cost per Kg 196.63 respectively. 6)Net returns per Kg 233.37

u64 March 2019 MEDC Economic Digest Cover Story

Economics of mariculture Table 3: Economics of mariculture of red snappers of red snappers I. Variable cost The small cage which is unused Particulars Qty Rate Value after six months of culturing 1) Feed sea bass is used again for Upto 2 months 345 15 5175(2.03) culturing wild caught fingerlings of red snappers. 2-6 months 931.5 15 13972.5(5.49) The variable cost shared 6-18 months 7026.25 15 105393.75(41.41) 77.84% of the total cost. Feed Sub total 124541.25 was considered as major variable cost item at Rs. 2) Labour 124541.25 (48.93%) followed a) To catch fingerlings 15 500 7500(2.95) by labour at Rs. 52331.25 b) Feeding 87.1875 500 43593.75(17.13) (20.57%). Labour performed c) Harvesting 2.475 500 1237.5(0.49) catching of fingerlings, feeding, supervision and Sub total 52331.25 harvesting. The cost of Rs. 3) Interest on working 21224.70(8.34) 21224.70 (8.34%) was incurred capital on account of interest on Total variable cost 198097.20(77.84) working capital. Depreciation on cage and interest on fixed II. Fixed cost capital at Rs.47058.75 (18.49%) 1) Interest on fixed 9337.5(3.67) and Rs. 9337.5 (3.67) were the capital @ 12% major fixed costs. The total cost 2) Depreciation 47058.75(18.49) incurred towards production Total xed cost 56396.25(22.16) of red snappers came to Rs. 254493.45. The rate of III. Total cost (I+II) 254493.45 mortality was found to be very IV. Returns low at 4.35% in case of red 1) Yield 95.65% 990 snappers. After duly survivability &1.8 Kg/ accounting for mortality, the fish yield of red snappers at 1.8 kg 2) Price per Kg 380 per fish came to 990 kg. Gross 3) Gross returns 376200 returns were valued at Rs. 376200 @ Rs. 380 per kg. 4) Net returns 121706.55 The cost incurred and net 5) Cost per Kg 257.06 returns realized per kg of red 6)Net returns per Kg 122.94 snappers came to Rs. 257.06 and Rs. 122.94, respectively (Table 3). profitability on one hand and biological recruitment. This sustainability of fishing on approach can undoubtedly be Conclusion other hand. It has come up as a considered as a measure to The economics of sea bass and lucrative alternative for open reduce pressure on natural fish red snappers mariculture had access fishery especially during stock on a sustainable basis. proved its viability in terms of breeding or period of

MEDC Economic Digest March 2019 u65 Cover Story

OTEC-Desalination Using LTTD: A Sustainable Option Commander (Dr) Nitin Agarwala Research Fellow National Maritime Foundation, India [email protected] Maitreyee Shilpa Kishor Research Intern National Maritime Foundation, India [email protected]

Abstract and most used one being the 1. Introduction Water scarcity is one of the membrane and the thermal Water, which is an essential most important risks being technologies. However, these commodity to sustain life and is faced by the world today which technologies are not the most important constituent has been compounded due to environmentally friendly due to of living matter, is slowly climate-change and it has a which National Institute of running out not only in India potential of causing social, Ocean Technology (NIOT) but the world over. Lack of economic, political and developed the Low sufficient quantity of this environmental unrest. Temperature Thermal resource to meet the ever- Understanding the likely risk, Desalination (LTTD) growing demands has already efforts are being made to technology. In order to make affected every continent. ensure water availability to all this technology ecologically Currently, over one billion through various means of sustainable the OTEC- people lack access to freshwater water recycling, water desalination using LTTD is and an additional 2.7 billion, harvesting and seawater currently under development mostly living in the developing desalination. Notwithstanding by NIOT. countries, face scarcity that lasts these efforts, scarcity of water The present paper aims to for at least one month a year1 . is being felt by one and all the discuss this emerging field of According to UN projections2 , world over. India too is no OTEC-desalination using by 2030, the world's demand different wherein studies LTTD so as to provide an for freshwater will exceed the indicate that by 2030 the water insight into this field to the supply by 40 per cent leading to demand would be twice that of stakeholders in India's public nearly 14 per cent of the the available supply and if and private sectors along with world's population to business-as-usual continues, the opportunities and encounter water scarcity, which this would bring about loss to challenges this technology has is likely to become even more the country's GDP which to offer them. severe due to rising sea levels would deepen the crisis further. caused by climate change and A number of technologies for Keywords: Desalination; LTTD; extreme weather. As no two desalination have been tried OTEC; Sustainability; Blue nations are equally bestowed out, with the most successful Economy; SDG with natural resources, the

1 The 11 Cities Most Likely To Run Out Of Drinking Water, 11 February 2018, BBC News, Available at https://www.bbc.com/news/ world-42982959 (accessed 02 September 2018) 2The United Nations World Water Development Report 2016, Water and Jobs, Facts and Figures, Available at http://unesdoc.unesco.org/images/ 0024/002440/244041e.pdf (accessed 06 September 2018) u66 March 2019 MEDC Economic Digest Cover Story situation is grim in some places other alternatives like shore and harm the marine while it is turning serious in importing potable water. ecosystem on which the others. While cities like Cape- Using this technology, nearly economy of these nations Town are already facing this half of Israel's water is depends. This concern of the problem, cities like Bangalore manufactured while most Small island communities has been (India), Beijing (China), Cairo Island Developing States addressed by the National (Egypt), Jakarta (Indonesia), (SIDS) in the Indo-Pacific Institute of Ocean Technology, and Tokyo (Japan) face the risk region rely on desalinated water India (NIOT) by successfully of running out of drinking to meet their domestic and developing and implementing water in the near future if industrial needs. the Low Temperature Thermal business-as-usual continues. A Such is the demand that in the Desalination (LTTD) dedicated effort towards last five years there has been a technology at Kavaratti, conservation, that requires 57 per cent increase in the Lakshadweep. Further work in economy-wide actions, will installed capacity of these developing an Ocean Energy determine if this, inevitable, plants. The currently used Thermal Conversion (OTEC)- water scarcity can be delayed. desalination technologies other desalination plant using LTTD than being costly, consume technology is in progress which In order to overcome this will make the process of scarcity, desalination massive amounts of energy that contributes to climate-change desalination sustainable thus technology has grown and reducing the risks of climate matured by leaps and bounds. causing greenhouse gas emissions, noise pollution, change while being cost Various technologies have been efficient. The present paper employed over the years to gaseous emissions and chemical spills, which causes thus aims to discuss the convert highly saline seawater emerging field of OTEC- with a concentration of total harm to the aquatic life due to increased concentration of desalination so as to provide an dissolved solids (TDS) close to insighttothisfieldtothe 3 salts, temperature and specific 35,000 ppm into potable stakeholders in India's public quality water with a TDS of weight of the waste brine, and puts drinking water at risk by and private sectors along with 200-500 ppm. According to the the opportunities and International Desalination inclusion of the already present boron from the seawater challenges this technology has Association (IDA), there are to offer to them. around 19,372 desalination thereby making these plants plants spread across 150 environmentally unacceptable. 2. Water scenario in India But, with limited available countries, benefitting as many A study undertaken by alternatives, desalination of as 300 million people (IDA McKinsey in 2009 for the 2030 seawater is the only available Yearbook, 2018). Many World Resources Group in option to mankind. 4 countries, especially in the arid 2009 and echoed in the CWMI regions of Northern Africa and For SIDS and island Report of 2018 by NITI Aayog5 West Asia (referred to as communities, these says that: 'Middle East' in US literature), desalination plants become a find desalination a relatively bigger burden as they lock “India is suffering from the worst cheaper option compared to prime land property next to the water crisis in its history and millions 3parts per million 4Charting our water future, McKinsey Report November 2009, Available at https://www.mckinsey.com/business-functions/sustainability-and- resource-productivity/our-insights/charting-our-water-future (accessed 02 September 2018) 5Composite Water Management Index, A tool for water management, June 2018, Available at http://www.niti.gov.in/writereaddata/files/ document_publication/2018-05-18-Water-index-Report_vS6B.pdf

MEDC Economic Digest March 2019 u67 Cover Story of lives and livelihoods are under Gujarat, Himachal Pradesh, water supplies are threat. Currently, 600 million Karnataka, Telangana, Madhya dependent on groundwater. Indians face high to extreme water Pradesh, parts of Maharashtra, (f) Climate change is expected stress and about two lakh people die Punjab, Uttarakhand, Odisha, to intensify monsoon, every year due to inadequate access to and Tamil Nadu face water 6 glacier melt, and flooding, shortage. Some disturbing safe water. The crisis is only going to further exacerbating India's get worse. By 2030, the country's facts about the status of water 7 'difficult hydrology'. water demand is projected to be twice in India are: In order to mitigate the effect the available supply, implying severe (a) At least 21 Indian cities will of this scarcity, though NITI water scarcity for hundreds of reach zero ground water Aayog has recommended millions of people and an eventual level by 2020. ~six per cent loss in the country's (NITI, 2018) the Composite GDP”. (b) About 40 per cent people in Water Management Index India may not have water to (CWMI) in June 2018 to It is no wonder that during drink by 2030. encourage 'competitive and summers many of the Indian (c) Water demand in India will cooperative federalism' in the cities face acute water shortage country's water governance and and sprawling queues for water reach 1.5 trillion cubic meters in 2030 while India's management, there is a need to tankers are a common sight. ensure circular economy of the Erratic rainfall due to climate current water supply is only 740 billion cubic meter. available water by ensuring change, increased usage of recycling, use of advanced groundwater for farming, and (d) The UN has ranked India rainwater systems and policies such as financial 120th out of 122 countries expensive technologies such as in water quality, as about 70 support for groundwater desalination to ensure meeting per cent of the supply is extraction resulting in wasteful the water needs of a growing contaminated. exploitation of water, have Indian population while compounded the problem (e) More than 60 per cent of ensuring the desired economic further. Add to this a flawed India's irrigated agriculture growth of the nation. The pricing system that makes one and 85 per cent of drinking financial contribution of each feel that water is a cheap commodity in India and need not be conserved. However, this is far from true and as various study reports indicate (WRG, 2008; NITI, 2018) if adequate interventions are not put in place, the situation would only worsen to further deepen the crisis. Within the country, currently many Indian states including Figure 1: Water availability cost curve for India Andhra Pradesh, Chhattisgarh, (Source: McKinsey Report 2009 for 2030 Water Resource Group)

6Bhaskar Tripathi, Changing Monsoon Patterns Worsening India's Water Crisis, Conflicts: Study, 6 June 2018, Available at http://www.indiaspend.com/ cover-story/changing-monsoon-patterns-worsening-indias-water-crisis-conflicts-study-75842 (accessed 02 September 2018) 7Anuradha Shukla, Alarming: 21 Indian Cities Will Run Out Of Water By 2030, Business World, 19 June 2017, Available at http://www.businessworld.in/ article/Alarming-21-Indian-Cities-Will-Run-Out-Of-Water-By-2030/19-06-2017-120383/ (accessed 02 September 2018) 8There is a large plant in Jamnagar, Gujarat, a few in Maharashtra and Andhra and Telangana, See IDA Desalination Yearbook, 2017-18, Available at https://www.paperturn-view.com/uk/global-water-intelligence-paid/gwi-ida-yearbook-2017-2018-full-final2?pid=MTY16585&p=107&v=4 u68 March 2019 MEDC Economic Digest Cover Story of these supply measures to meet the requirement in the year 2030 as given by the McKinsey Report of 2009 is showninFigure1whichis indicative of the fact that if India continues its business-as- usual, meeting basic water requirements of the nation would become a very costly affair for the government. Currently water needs of India are met through rainwater, rivers, dams, groundwater (deep and shallow), aquifers, waste water use and desalination. Of these, the Figure 2: Classification of desalination processes desalination technology has been used in various states8 . the filtration process that helps (Reverse Osmosis [RO] and in maintaining the ground Electro-Dialysis [ED] as the 3.Understanding water table by multi-stage proven membrane processes) desalination permeation filtration. dominates the market over the 3.1 As a process The distillation processes of period of 1990-2017 when Desalination of water can be nature have been understood compared to the thermal undertaken by using any of the and used by man, as early as the technology, as seen in Figure 3. two known processes namely 1600s when sailors boiled The motivation behind the distillation91and filtration 0 . Both seawater to produce freshwater development of these various these processes eventually to meet their drinking water technologies has been the need result in the purification of requirements. The world's first to be able to produce water making it potable. commercial traditional freshwater in a cost-effective Mother Nature too relies on distillation plant called Tigne manner as desalination is desalination to provide us was built in Sliema, Malta in the only rain-independent freshwater. The natural 1881 with the first land-based freshwater source known to process of evaporation, plant being built in 1928 at mankind. condensation, saturation and Curacao, Netherlands Of all the developed precipitation which gives us Antilles11 . Since then, various technologies, seen in Figure 2, rain is a classic example of technologies, as seen in Figure the only technology that can be nature's distillation process. 2, have been developed and used offshore is the LTTD and Yet another process of tried out; of which the is particularly of use for SIDS, desalination as seen in nature is membrane technology island communities and

9 When impure water is evaporated, precipitated and then condensed to get freshwater with the salt and the impurities being left behind in the original source, the process is called distillation. 10 When suspended solids in the fluid (liquids or gases) are separated by using a medium that permits only the fluid to pass through, the process is called as filtration. 11 Desalination plant history, Available at https://www.preceden.com/timelines/332386-desalination-plant-history (accessed 02 September 2018)

MEDC Economic Digest March 2019 u69 Cover Story

have limited or no natural water resource and relies mainly on rain for their freshwater requirements such as Australia and West Asia. Accordingly, these countries have high desalination capacity plants such as Saudi Arabia (880 million cubic meters per day (m317 /d) , Israel (540 million m3 /d), Algeria (500 million m3 /d), and Australia (444 million m3 /d). The total Figure 3: Contracted capacities as per technology 1990-2017 (Source: IDA Yearbook, 2017-18) number of desalination plants worldwide across all categories countries with a large coastline development studies to show stands at 19,372 in 2017 as such as India. These plants that OTEC can compete with against 18,983 in 2016 while the work on the principle of diesel generating plants in cumulative global contracted harnessing the temperature power generation. capacity, including plants that difference of ocean waters over The production of potable have been contracted or are depths, a process suggested by water using OTEC was under construction is at 99.8 the French physicist 3 12 achieved by a team of d'Arsonva1 in 1881 and put million m /d in 2017, up from researchers from Argonne 3 into practice on an industrial 95.6 million m /d in 2016. The National Laboratory (ANL) scale by Georges Claude and cumulative global installed and Solar Energy Research (online) capacity has increased Paul Boucherot at Mantazas, 3 Cuba13 , first in 1929 and then at Institute (SERI) who produced from 88.6 to 92.5 million m /d 18 Abidjan, Ivory Coast, in 1940. 5.8 gallons per minute (GPM) over the last one year of freshwater in 1987 and 103 However the project was 3.3In India shelved due to political reasons. kw ofnetpoweratHawaii. Subsequently, the favourable Using this principle of India had 182 desalination economics of production of temperature difference, the plants operating in different energy along with potable NIOT redesigned the process parts of the country in 2012 14 on independent parameters to water was demonstrated in 15 and this figure was anticipated develop the process , now 19 1959 at Guadelope but did not 16 to go over 500 by 2017 . Since appeal to the decision makers as known as LTTD . the membrane-based the site had sufficient potable 3.2The world over technology is 23 per cent water. In the 1970s the US and cheaper than the thermal based Japan, launched OTEC Desalination is particularly relevant to arid countries that technology, 85 per cent of the

12Used the closed cycle OTEC that uses working fluids that are typically thought of as refrigerants and can function at lower temperature differentials 13Used the open cycle engine that uses vapour from the seawater itself as the working fluid 14Using the hybrid cycle wherein electricity is produced in the first stage using closed cycle followed by production of water in the second stage that uses open cycle 15Muthunayagam A E, Ramamurthi K and Paden J R (2005), "Low Temperature Flash Vaporization for Desalination", Desalination, Vol. 180, Nos. 1-3, pp. 25-32 16Low Temperature Thermal Distillations is a process similar to OTEC where the temperature difference between the warm surface water and cooler deep water is used to produce freshwater but no electricity. Water at low pressures (27 milli bar) and condense the resultant vapour using colder water to obtain freshwater. Warm ocean water is evaporated at low pressure using the high temperature surface water and condensed using the deep cold water to produce freshwater as condensate. The process of LTTD requires a lower thermal gradient of 16° as compared a 20° gradient required for OTEC and a lesser minimum depth of 600m as compared to 1000m for OTEC making it feasible in more areas of the world than OTEC. 17Various units are used. These include Million cubic meters per day used by IDA, Million Litres per day (MLD) used by the Australians which is equal to one thousand cubic meters. The Americans use Million gallons per day (MGD) which equals 3,785 m³/d while West Asia used Million Imperial gallons per day (MIGD) which equals 4,546 m³/d 18IDA Desalination Yearbook, 2017-18, Available at https://www.paperturn-view.com/uk/global-water-intelligence-paid/gwi-ida-yearbook-2017-2018- full-final2?pid=MTY16585&p=107&v=4 19India Water Desalination Plants Market Forecast and Opportunities, 2017, TechSci Research Report u70 March 2019 MEDC Economic Digest Cover Story plants in India are membrane- Maharashtra22 . power. The first pilot project based mostly with the support Most of these plants are of this nature is being tried out of the Centre and State installed by multinational firms, by NIOT in Kavaratti and is governments. Gujarat has the use membrane and thermal expected to be commissioned highest number of desalination technology, and are land based. by 201923 . plants due to the water scarcity For island communities that In addition to these, NIOT is in the state. Tamil Nadu have little available free land working on a 10 MLD follows next contributing to 24 space and are ecologically desalination plant 40km off per cent of the total desalinated delicate such as the Ennore, where they would 20 water capacity in India . The Lakshadweep islands, NIOT establish the world's first deep bigger ones of these include has commissioned desalination seawater desalination plant the Minjur Seawater plants using LTTD technology using LTTD technology being Desalination Plant (2010) with at Kavaratti, Lakshadweep in supported by diesel operated a capacity of 100 Million Litres May 2005 (1 lakh litre per day power units24 before eventually per Day (MLD), and the (0.1 MLD) plant) and shifting to OTEC generated Nemmeli Seawater subsequently at Minicoy and power. Desalination . Agatti (April and July 2011 4. Challenges of the existing Plant (2013) with a capacity of respectively, 1 lakh litre per technologies 100 MLD, both in Tamil Nadu. day). Another LTTD plant at Other plants for which Northern Chennai Thermal These plants, both membrane environmental clearance have Power Station (NCTPS), and thermal, other than being been accorded include the Thoothukudi, Chennai (March costly, consume massive Nemmeli Seawater 2009, 2-3 lakh litre per day) as a amounts of energy (see Table Desalination Plant (150 MLD cogeneration thermal plant was 1) that contributes to climate- under German funding), the installed by NIOT after change-causing greenhouse gas Perur Desalination Plant (400 demonstrating and later emissions, cause noise MLD funded by Japan dismantling after the pollution, gaseous emissions International Cooperation technology was proven, a 1 and chemical spills, harm to Agency [JICA])21 , two projects MLD barge mounted aquatic life due to increased at Kuthiraivaimozhi and desalination plant off the coast dissolved salts, temperature and specific weight of the waste Alalnthalai in of Chennai in 2007. To make brine that changes the local salt Ramanathapuram District with this technology ecologically content for the marine life, and a combined capacity of 120 sustainable, OTEC- puts drinking water at risk by MLD, and a 20 MLD (18 MLD desalination plants are being inclusion of the already present Process and 2 MLD drinking developed such that the LTTD boron in the seawater, thereby water) plant at ONGC, Uran, can be supported by OTEC for 20Seetha Gopalakrishnan, Why making seawater drinkable is not the solution India should look at, YourStory, 9 June 2017, Available at https:// yourstory.com/2017/06/potable-sea-water/ (accessed 06 September 2018) 21Centre clears mega 400 MLD desalination plant in Chennai, Indian Express, 27 May 2018, Available at http://www.newindianexpress.com/cities/ chennai/2018/may/27/centre-clears-mega-400-mld-desalination-plant-in-chennai-1819975.html (accessed 06 September 2018) 22CRZ nod to ONGC's Rs 266-cr desalination plant in Maharashtra, The Times of India, 8 October 2017, Available at https://timesofindia. indiatimes.com/business/india-business/crz-nod-to-ongcs-rs-266-cr-desalination-plant-in-maharashtra/articleshow/60991095.cms (accessed 06 September 2018) 23India's first ocean power generation project coming up in Kavaratti, Lakshadweep, 22 September 2016, ANI, Business Standard, Available at https://www.business-standard.com/article/news-ani/india-s-first-ocean-power-generation-project-coming-up-in-kavaratti-lakshadweep- 116092200284_1.html (accessed 03 September 2018) 24U Tejonmayam, NIOT to build India's first offshore desal plant near Chennai coast, 14 November 2017, Times of India, Available at https:// timesofindia.indiatimes.com/city/chennai/niot-to-build-indias-first-offshore-desal-plant-near-city-coast/articleshow/61636889.cms (accessed 05 September 2018) MEDC Economic Digest March 2019 u71 Cover Story making such plants Typical Electrical Thermal Energy Total Energy unit size Energy Consumed environmentally unacceptable. Consumption Equivalent But, with limited alternatives Electrical Energy available, desalination of m3/ d kWh /m3 kJ /kg kWh /m3 kWh / m3 seawater is the only available MSF 50,000 - 4 – 6 50-110 9.5 – 19.5 13.5 - 25.5 option for mankind. These 70,000 technologies are however land based and have been found to MED- 10,000 - 1.5 – 2.5 40-110 9.5 – 25.5 11 - 28 TVC 35,000 be economically unacceptable for island communities. MED 5,000 - 1.5 – 2.5 60-110 5 – 8.5 6.5 - 11 Accordingly, the LTTD 15,000 technology was successfully MVC 100 - 7 - 12 None None 7 - 12 developed by NIOT. 2500 Though between RO and RO 24,000 3 - 5.5 None None 3 – 3.5 LTTD, the energy ED 2.6 – 5.5 None None 2.6 – 5.5 consumption of LTTD is higher, while comparing these LTTD 10 two technologies, one realises MESS* 1500 80 that *Multi-Effect Solar Still (a) In the case of LTTD, sea 25 26 Table 1: Theoretical energy requirements of desalination processes desertification is (Actual power is 5 to 26 times of the theoretical minimum depending on the type of process) negligible, while the same is very high for an RO plant. as a sustainable desalination does not require any technology would profit if chemical pre and post- (b) RO plant has a high green power such as wind, treatment of seawater, the chemical discharge which is solar or OTEC is used. associated pollution negligible for LTTD plants. (g) Eco-friendliness of LTTD problems are minimal and LTTD is a stand-alone has allowed the suitable for island technology. development of the first communities. (d)It has a minimum generation OTEC- (k) Since no effluent treatment environmental impact and desalination plants with a is required, it gives less hence is preferable for focus on Small Island operational maintenance ensuring the preservation Developing States (SIDS) as problems compared to of the marine ecosystem. their market. However, they other desalination (e) LTTD too requires power have been unable to processes. but the ecological gains attracted investments. (l) Since the actual effect on make the process (h) The quantity of water used the ecology of the environmentally by LTTD for generating one discharges from the LTTD sustainable. litre of water is higher as is not known, there is fear (f) The development of LTTD compared to RO plants. that it may cause ecological (j) Since the LTTD technology disaster and hence these

24Adapted from Energy Requirements Of Desalination Processes, Encyclopedia of Desalination and Water Resources, (DESWARE), Available at http://www.desware.net/Energy-Requirements-Desalination-Processes.aspx 25Caused due to concentrated brine discharge from the desalination plant as a residue u72 March 2019 MEDC Economic Digest Cover Story

impacts need to be studied LTTD. conducted on how to store and in detail. To provide an environmentally transport the water produced (m)OTEC requires a minimum friendly option to the LTTD, a using LTTD in order to of 1000m water depth to cogenerating OTEC- integrate it into the water benefit from the desalination plant can be supply system of larger coastal temperature difference, utilised as both processes utilise cities. There is also a need to unlike RO plants which can the thermal gradient of the support OTEC-desalination take seawater from much ocean. Commercialisation of plants, the demonstration lower depths. such cogenerating plants with project for which is being tried power not required for out by NIOT at Kavaratti and is 5. Desalination using OTEC distillation being exported expected to be in place by 2019. OTEC as a technology has outside the plant will enable the If successful, the OTEC- been around since 1881 but has operators to explore the extent desalination plant would be a not been exploited due to lack to which DOWA can offset the true answer to the sustainable of technology that permits cost of desalinating water. efforts of desalination of seawater. producing electricity from the 6. Opportunities for India ocean at a low cost. According In order to progress with the to current estimates, the global The installation and successful utilisation and spread of this potential for OTEC generated maintenance of LTTD plants technology the following energy is 7 terawatts (TW) in multiple locations and under opportunities for the private which can be generated round various environmental and players exist: the clock and throughout the geographical conditions, has (a)A PPP28 model is year. Other than energy and given NIOT the expertise in recommended wherein freshwater, OTEC can be used tailoring the technology for payments will be made for for Deep Ocean Water site-specific conditions. Since water delivered to the quality 27 Applications (DOWA) which both fixed and floating and quantity required and include, generating Lithium, platforms have been for the security of having a supporting aquaculture, successfully experimented in facility built and maintained providing chilled water for air- India, there is scope to use these so that it is capable of conditioning plants, while plants to cater to the freshwater delivering water. being environmentally friendly needs of cities on the Eastern (b) Progress of the PPP model as it generates no greenhouse and Western coast of India. with an independent gases. For the generation of On the Eastern coast, both reviewer to review design, freshwater, a multistage flash fixed and floating LTTD plants construction, safety and (MSF) desalination is are feasible while offshore environmental audit of the considered a suitable process, floating plants are more project. however, with OTEC this practical along the Western process does not work coast since the required depth An ADB study of 201429 efficiently and in place, a spray of water is not available near based on Dunbar study in 30 flash desalination process the coast. More research, 1981 indicates that 98 needstobeusedasinthe however, needs to be countries in the world have 27Allows use of OTEC residual water to be used effectively for extracting resources such as Lithium from the sea-water as is being experimentally tried out by the Japanese. See http://www.xenesys.com/english/common/pdf/kumejima.pdf 28PPPs are service-based contracts, where the private sector invests its capital in designing, building, financing, operating, and maintaining a facility in return for payment for the delivered service 29Wave energy conversion and ocean thermal energy conversion potential in developing member countries, Mandaluyong City, Philippines: Asian Development Bank, 2014, Available at https://think-asia.org/bitstream/handle/11540/51/wave-energy-conversion-ocean-thermal-energy.pdf?sequence=1 MEDC Economic Digest March 2019 u73 Cover Story

the required geographical climate change due to make it economical. It must, conditions to build a OTEC-desalination plants however, be remembered that commercial OTEC plant needs to be studied and part of the solution to the within their 200 nautical evaluated in detail. Similar world's water shortage is not mile EEZ. Most of these concerns have prevented only to produce more water but countries located in the the establishment of large- also to do it in an economical Indo-Pacific face water scale OTEC plants in and an environmentally scarcity and hence present a Australia31 . sustainable way. unique business (d) The durability of LTTD and Current techniques have their opportunity. OTEC powered own drawbacks and are not (d) Be partners to NIOT for desalination plants in the entirely environment-friendly Transfer of Technology face of natural disasters especially for the ecologically (ToT) to enhance the (cyclones, earthquakes, driven economies such as technology for suitable floods) common in the SIDS, island communities and marketing as a sustainable Indo-Pacific remains countries with large coastlines. product in line with Blue untested. In order to address this very Economy and SDG. (e) Economically, the biggest demanding requirement, a 7. Challenges for India challenge is to attract home-grown technology in the form of the LTTD technology With opportunities, challenges investors willing to invest in this technology. The has been developed by NIOT are natural. Similarly, for which is a much more OTEC-desalination, the scepticism among investors – both private and public – economically sustainable challenges that need to be technology. It would eventually addressed include: exists mainly because the technology has not been become entirely sustainable (a) The LTTD has not been tested on a commercial scale once the OTEC-desalination used outside India and may and appears to be a risky using LTTD, currently in the face some site-specific investment. demonstration phase, is challenges that need to be proven. 8. Conclusions addressed on a case-by-case The paper has aimed to discuss basis. Over the years, water resources and provide an insight into this (b) The technology for OTEC in India have witnessed quality emerging field to the is still in its nascent stage deterioration, volumetric stakeholders in India's public and India's experience in reduction, and ecological and private sectors along with operating large-scale OTEC degradation resulting in water the opportunities and plants is limited. However, scarcity. To overcome this challenges this technology has this problem can be scarcity, there is a consensus to offer. addressed by the experience that seawater desalination is the of the private partner. way forward. Though seawater desalination in itself is an Environmental effects expensive process, inclusion of including an effect on renewable energy sources can

30Dunbar, L.E., Market Potential for OTEC in Developing Nations, Proceedings, 8th Ocean Energy Conference, Washington, D.C., June 1981 31Gadonneix, Pierre, et al. 2010. 2010 Survey of Energy Resources. London: World Energy Council. p. 593 Available at http://www.wec-france.org/ DocumentsPDF/Etudes_CME/Survey_of_Energy_Resources_2010_WEC.pdf u74 March 2019 MEDC Economic Digest Cover Story

Participatory Approaches to Water Management Mr. S. N. Patankar Rtd. Chief Engineer [email protected] Go and meet your people. Live and stay with them. Work with them. Begin with what they have, plan and develop from what they know, and in the end, they would say “We did it ourselves”. -(Lao Tse-(Lao a Chinese philosopher) Introduction: qualitative stress as a result of Principles that have estimated Water is one of the key natural the effluent and waste water water as a finite and valuable and economic resources. Its discharge by the surrounding resource. It also stresses on the availability is essential for the locality. importance of participatory existence of human beings and Rationale for Integrated approach (PA) involving users, their surrounding Water Resource planners and policy makers. It environment. It decides the Management (IWRM) recognizes the special role played by women as water level of industrial and IWRM promotes a holistic economic activity in an area. users. Its significant view. The economic value of contribution is that it identifies However, factors such as the water is incorporated within the growing industrialization and water as an economic good concept of IWRM with a with a value in competing uses urbanization have resulted into greater stress on demand deterioration of water quality and also as having key social management. It is embedded in and environmental roles as well. worldwide. Many countries the concept of IWRM that (including developed It insists on economic water can serve many different efficiency in water use, its equal countries) find it difficult to purposes at different places at protect their surface and access to all and need for its eitherthesametimeor sustainability for the survival of ground water resources from sequentially. It recognizes that the discharges of untreated ecosystem. One of the key water has different uses and facets of IWRM is that it takes domestic and industrial therefore, accepts the concept wastewater, which threaten into consideration the entire of the opportunity cost of hydrological cycle and the ecosystem and health. In this water. It also expresses context, river water interaction of water with other concerns towards affordability natural and socio-economic management becomes very and securing access to the poor. crucial as serve as a major rivers systems. source of fresh water. There is IWRM aims at providing a new IWRM thoughts as a balancing a need to conserve and harness approach to challenges faced in process as it coordinates the these resources, which could be the water sector when development done by inviting public compared to traditional and/management of water and participation at all levels. approaches to water resource other related resources with the management. It studies a This paper talks about the objective of attaining complete range of solutions water/security and initiative undertaken by and evaluates how different Patalganga Area Water sustainability. Thus, it involves a actions affect, and can reinforce political procedure with long- Partnership (PAWP) to take up each other. constructive measures to term gains that are vital to the improve water quality. The Basically, IWRM draws its sustainability of the resource river Patalganga faces a inspiration from the Dublin base.

MEDC Economic Digest March 2019 u75 Cover Story

IWRM also identifies problems Concept of Participation: The ultimate role of faced in achieving alternate It is true that different participation is to facilitate uses of water, which strictly geographical areas have socio-economic development. requires efficient planning. differing water problems and Participation in development is However, the process of challenges. Although resource usually defined as a process of planning is usually fragmented availability and its location-wise equitable and active as a consequence of existence variability is the prominent involvement of all stakeholders of multiple authorities. problem, the issue of quality of in the formulation of Moreover, IWRM also stresses water is gaining recognition. development policies and on the issues relating to the Many have tried to obtain strategies and in the analysis, level of water availability, which international cooperation for planning, implementation, fails to receive the desired this, while some also believe monitoring and evaluation of attention of policy makers that solutions to these concerns development activities. It is also when decisions regarding crop could also be sought locally. seen as an organized effort patterns, trade and energy Participatory Approaches within institutions and policies, urban design and (PAs) to water sustainability is organizations to increase planning are taken. All these one of them, which emphasizes stakeholders' access and parameters act as significant on the involvement of the local control over resources and determinants of water community for preserving related decision making that demand. IWRM draws the existing water resources. contribute to sustainable attention of policy makers livelihoods. In the context of Participation is a process, towards these problems. Thus, development, it is viewed as an wherein stakeholders influence it calls for creation of the iterative process involving the and share control over required institutional continuing re-adjustments of development initiatives, the framework and a system that relationships between different decisions and resources, which can exceed these traditional stakeholders in a society in affect them. Participatory boundaries and involve a order to increase stakeholder Approach highlights the need variety of users and other control and influence over for stakeholder ownership stakeholders. development initiatives that through participation. In other affect their lives. Although IWRM offers a words, they are meant to number of advantages, there generate a sense of ownership Participatory Approaches to are certain challenges in of decisions and actions. Water Management: implementing IWRM. It is argued that short term costs PAs allow a community to Participatory approaches are and disadvantages may seem analyze the realities of their based on participatory more apparent than tangible lives; plan action to change the principles that advocate benefits since greater stress is situation; and monitor and improving capacity of given to longer term evaluate the results on their participants through their advantages. Similarly, it is also own. In this context, it becomes involvement in decision argued that merely involving a essential to seek involvement making. These principles are wider range of stakeholders in of all stakeholders in the applicable at all levels and decision making would not process of IWRM, rather than aspects of development from ensure a fair treatment to all, merely confining it to direct integrated management system especially the weaker segment. beneficiaries. within governmental and non- u76 March 2019 MEDC Economic Digest Cover Story governmental development and service organizations to the general process of identifying, establishing and implementing participatory activities. Some of the key principles of participation are as follows: l Inclusion of all people of all groups, who would benefit by the results of a decision or a process. l Extending Equal partnership by recognizing that every individual has some skills, everybody's strength needs. Hence, this calls for a ability, initiative and also an lessens everybody's decentralized approach. equal right to participate in weaknesses. l It creates a sense of this process, irrespective of These principles indicate that belonging and responsibility his or her status. the essence of participation is for stakeholders in planning l Maintaining Transparency in empowering the community and implementing the to create a climate to enable them to solve their activities. conducive to start own problems through equal l communication and The requirement to give partnership, transparency, everybody a role in the building dialogue among all cooperation and sharing of stakeholders. process, especially in terms power and responsibility. of decision-making and l Sharing of power and There are many beneficial responsibility, results in the responsibility must be impacts of participatory empowerment of balanced evenly among all approaches at the level of everybody involved. stakeholders. Similarly, all community and organizational l Implementation of stakeholders have equal management system, responsibility for decisions activities becomes more particularly in terms of greater objective and flexible that are made, and each sustainability. should have clear according to specific responsibilities within each Following are some of the conditions. process. benefits of PA; s l It brings about greater l Empowerment of all l The program and transparency as a result of participants by imparting implementation is more disbursement of skills and knowledge to applicable to the existing information and authority. them. social, economic and There are various levels or l Cooperation is very cultural context, thus degrees of participation important as sharing meeting the community's (which are determined

MEDC Economic Digest March 2019 u77 Cover Story through negotiation) ranging the policies are established l Human Resource from consultation to joint by issuing decrees and Constraints - “The decision making to self- instructions without much community as the focus of management by stakeholders of interaction with people. development” (People themselves. Ideally, this process The lack of cooperation centred development) is still puts the beneficiaries at the among different a brand new concept for centre of a development departments makes the way government staff, and it will process, which in turn would be difficult for stakeholders' take time just to introduce driven by and continuously participation. and gain acceptance for the adjusted as per their own l concepts. Thereafter learning processes and needs. Management system However, PAs face certain constraints - Most of the substantial training will be institutional constraints in management systems within needed to equip them with their functioning. This is government departments the new skills they will because the governmental still follow the old require. “Mechanistic Planning organizations still find it Critical Appraisal of Model” where “Experts” in extremely difficult to use Participatory Approaches : participatory approaches the centre prepare a “blue despite having participation print” for field staff to The last few years has seen established in the highest level follow. Similarly, financial exciting innovations and a development and political allocation and management tremendous spread of policies in majority of places. systems are designed to participatory tools and Various constraints faced by support projects that deliver methods. However, it is widely the government to implement inputs to achieve visible opined that there is a need for a PAs are listed below: physical results. Moreover, more critical stance. Besides the monitoring and improving the capacity of l Attitudinal constraints - It evaluation systems is difficult for bureaucrats to stakeholders for reflection and emphasize on expenditure adapt to new bottom-up analysis, it is advisable to focus and delivery of inputs rather systems where they not only on not only methods but also than outcomes and impact. have to discuss what they the purposes and values of Although decentralised to should do with the PAs. The theoretical concerned community, but regional level, little advice is framework of PAs must be also have a responsibility to being provided to regional deepened by consolidating communicate the results to administrations about the knowledge of what works, for their superiors. systems they should whose benefit, to what ends, develop. Thus, it is likely that and why. l Policy constraints - most systems will remain Although the highest-level centralised and top-down, Further, academics and policies promote albeit at regional-level. Local practitioners treat Pas as a participatory approaches, decrees, guidelines and form of practice that has the vision, mission, goal, technical instructions are continued to spread without and programs of most likely to continue to provide taking any note of its criticism. government departments little room for flexibility and They also complain about a still follow the traditional participation for lack of accurate and real data. top-down approach. Even operational staff. They also question weak u78 March 2019 MEDC Economic Digest Cover Story theoretical foundations, hydrologists, scientists etc. flowing river in the state of moralistic overtones and the Stakeholders in association Maharashtra. The average failure to engage with the with these experts can form a rainfall in catchment is development process. There Steering Committee, which 3000mm with average runoff have been concerns shown should meet at least once in a of 2500 mm. Since 1910, it has about superficiality and month. Similarly, a host been receiving tailrace water oversimplification of these institution could be established from a neighbouring approaches. by these stakeholders for hydropower station, turning it into a perennial river. The Concept of Area Water administrative support. The Partnership (AWP): AWP should take steps to raise The total length of the river is finances to be self-reliant after 54 km. A number of industries To promote IWRM in line with getting initial support through were established in the the Dublin-Rio-Kyoto external funding. A Vision 2025 catchment area during post- principles, partnerships have and a Framework for Action independence period. The been structured at global, should be prepared by the AWP perennial flow also attracted a regional and national levels. As to guide the stakeholders. The few authorities and two ports. a consequence, Global, objective behind this exercise is This culminated into buzzing Regional, Country and Zonal to study the local needs and to industrial activity, which led to Water Partnerships have been apprise the governmental severe water pollution. The formulated all over the world. authorities about them, which villagers, who were earlier This study focuses on the 'Area could then be reflected in their dependent on river for drinking Water Partnership' (AWP), policy and programmes. purposes, have been deprived which has been promoted in of a reliable source. This Patalganga Area Water South Asian Region and a few situation clearly highlights that Partnership (PAWP): other regions by Country Water the qualitative water stress has Partnerships. The objective of ThePAWPwaslaunchedin resulted into a quantitative one. AWP is to implement the 2002, which received This necessitated the stakeholders in the hydraulic principles of IWRM at grass- representation from area to come together PAWP governmental and other root levels by identifying reached the final stage of interdependency of various developmental agencies, local completion of the Vision 2025 water related institutions and community and corporate. The simultaneously worked on Stakeholders. The functioning river Patalganga is a typical west Framework for Action. Three of AWP is divided in four phase's viz. conceptual, exploratory, establishment and network management. The membership could be sought from diverse fields such as irrigation, water supply & sewerage, industries, media, etc. The expertise could be invited from economists, women, politicians, administrators, environmental groups, educationalists, social workers,

MEDC Economic Digest March 2019 u79 Cover Story categories of stakeholders viz. l Inadequate arrangement to the stakeholders. Due direct beneficiaries, collect, store and dispose consideration should be intermediaries and decision / off industrial hazardous given to monitor progress, policy makers were identified. waste proper supervision, proper Each of them was requested to database, etc. detail out its present and future l Lack of planning to utilize policies programmes to control other local water resources v Water for food shall aim at river water pollution and Vision Elements: increasing productivity of achieve the Vision. For this land, crop per drop, etc. The Vision Statement aimed at purpose, PAWP organized two v Water for health shall aim at Stakeholders' Seminars in order providing sustainable allocation of available water providing safe water, to seek more involvement of adequate treatment and stakeholders, which received a resources, and also at achieving disposal and monitoring good response. overall socioeconomic effluent disposal. Besides the severely development of the area v deteriorated water quality, through stakeholders' Water for environment shall following issues in participation. aim at assistance to the Patalganga river basin were For this very purpose, forest department, identified: following Vision Elements maintaining fair weather flow, protecting the l Existence of multiple (VEs) were identified by PAWP: estuarial eco system, stakeholders such as monitoring air quality, river agriculture, domestic, water quality, etc. industrial, livestock, v Water resources hydropower, in-stream uses development shall aim at v Institutions and governance etc., resulting into optimum utilization with shall aim at establishing fragmented planning due considerations given to necessary organization and the program for action. involving NGOs etc. l Multiple institutions v Social development shall involved in various aspects v Water resources aim at assisting population of basin planning and management shall be with control, preventing management, resulting into phase wise development urbanization, promoting lack of integrated planning program acceptable to all l Absence of a single authority to look after the allocation of resources l Inadequate water supply schemes l Incomplete sewage treatment plants l Disposing off of inadequately treated industrial waste water in river u80 March 2019 MEDC Economic Digest Cover Story

awareness, ensuring starts with VEs, each of which waste water discharge be women participation, is further classified into sub- implemented? providing affordable health elements. The matrix also v How could a higher level of service and providing list/out shortcomings in socio - economic recreational facility, etc. achieving these VEs in the development be achieved? v Economic development present context. It identified Conclusion: the concerned stakeholders and shall aim at judicious use of The case study of PAWP water for agriculture, facilitators who could actively involve in this process. presented is a good example of industry, self supporting participatory approach. The system, financial The ultimate aim of any National Policy Support arrangement and poverty Participatory effort must be to Programme for Blue alleviation. come up with a Success Model. Economy necessitates such v Industrial growth shall aim PAWP also attempted to approaches to created and at establishing new formulate a Success Model for spread all be over the country. industries, providing more itself, which could be adopted Nevertheless most of the Area jobs, sustaining industries, by any AWP. water partnerships created encouraging clean This could be augmented with lacked sustainability due to technologies and providing expert opinions, views and administrative and other all emergency plans. policies. With the help of reasons. The author desires to v Technological development existing information, the model prompt such concepts in a shall aim at providing for intends to answer the following bigger way to the fruits of the Blue Economy. proper water supply, waste few queries faced by disposal, industrial stakeholders and decision Reference : makers. processing, energy v Note on “GWP- v generation, agriculture, What may be the optimal Frameworks for Action”. transport, information allocation or flows in the technology, education etc. system to meet the demands v Note on “GWP Mapping, in 2025? Visioning & Framework for The FFA matrix was designed Action”. after considerable amount of v How could the water quality deliberations with me be assured? v Draft guidelines of IWRM & Water efficiency, GWP stakeholders. The matrix was v How could the concept of publication, August 2004. constructed into 5 columns. It minimum water use and zero

MEDC Economic Digest March 2019 u81 Cover Story

World Bank: Blue Bond Gianfranco Bertozzi Lead Financial Officer, Financial Products and Client Solutions, World Bank Treasure

The Seychelles, which recently support a transition to pollution to coastal erosion and issued a Blue Economy sustainable fisheries,” he added. the devastating impact of roadmap, recognized the need After tourism, the fisheries climate change, requiring a to rebuild and sustainably use sector is the Seychelles most massive response from both its fish stocks through important industry, the public and the private improved governance and contributing significantly to sector. management of the sector. annual GDP and employing “The challenges facing our However, the cost of shifting 17% of the population. oceans are too big for to sustainable fisheries can be Proceeds from the bond will governments alone to tackle substantial and this is where fund a range of oceanic and and the private sector – in this private sector financing can marine activities, from boosting case impact investors -- can play play an important role. The the fisheries value chain, the a crucial role in the blue bond is one way to create a refurbishment of fishing boats development and protection of link between investors and blue for other purposes such as ocean resources for economy projects. tourism, to improving generations to come,” said “Through the blue bond and aquaculture and marine Karin Kemper, Senior Director other project support, we aim conservation and spatial of Environment and Natural to show how fisheries, as an planning. The blue bond also Resources at the World Bank. ocean economy that is already complements a debt-for-nature The bond was issued with a well developed, can shift from swap that Seychelles did in 2015 ceiling value of US$15 million, business-as-usual to more with The Nature Conservancy with a maturity of 10 years. The responsible fishing and in exchange for greater ocean World Bank provided support management practices that protection and climate change via a partial guarantee ($5 align with the core principles of adaptation. million) and the Global a Blue Economy,” said Much like the World Bank's first Environment Facility provided Seychelles Vice President green bond did for climate a a concessional loan ($5 Vincent Meriton of the blue decade ago, the Seychelles blue million), which will subsidize bond, which was structured bond is expected to stimulate payment of the bond coupons. with the help of the World interest among public and These credit enhancement Bank. private investors wanting a instruments allowed for a “The beneficiaries of the bigger role in ensuring the reduction of the price of the proceeds of the blue bond will sustainable use of ocean and bond by partially de-risking the be local communities, civil marine resources. Oceans are investment of the impact society organisations and under increasing investors, and by reducing the businesses who are seeking environmental stress, from effective interest rate of 6.5% financing for activities that can over-fishing and marine for Seychelles to 2.8% by u82 March 2019 MEDC Economic Digest Cover Story subsidizing the coupons. Capital, Nuveen, and into unchartered waters. We Since the total amount of the Prudential. believe the transaction blue bond was relatively low “This was a complex provides proof of concept volume in market terms, it was undertaking, and we that market investors are privately placed with three commend the Seychelles ready to support blue socially responsible impact Government for having the economy objectives in a investors based in the United courage and commitment to scalable way, and the time to States, namely Calvert Impact take its specific challenges mobilize resources is now"

FORM IV (See Rule 8)

Statement about ownership and other particulars about periodical entitled 'MEDC ECONOMIC DIGEST' as required to be published in the first issue every year after the last of February.

1. Place of Publication : Mumbai 2. Periodicity of its Publication : Monthly 3. Printer's Name : Ananya Prem Nath Whether Citizen of India?: Yes Address Maharashtra Economic Development Council, Y. B. Chavan Centre, Nariman Point, Mumbai- 400 021. 4. Printer's Name : Ananya Prem Nath Whether Citizen of India?: Yes Address Maharashtra Economic Development Council, Y. B. Chavan Centre, Nariman Point, Mumbai- 400 021. 5. Printer's Name : Ananya Prem Nath Whether Citizen of India?: Yes Address Maharashtra Economic Development Council, Y. B. Chavan Centre, Nariman Point, Mumbai- 400 021. 6. Name and Address of : Maharashtra Economic Development Council Individuals who own the periodical Y.B. Chavan Centre, Nariman Point, Mumbai – 400 021. and partners and shareholders holding more than one percent of the paid up capital

I, Ananya Prem Nath hereby declare that the particulars given above are true to the best of my knowledge and belief.

Sd / - Ananya Prem Nath Date : 01. 03. 2019 Signature of Publisher

MEDC Economic Digest March 2019 u83 Cover Story

Development Of Ports In India New Initiatives for capacity additions and Improving operational efficiency Dr. S. D. Naik Economist [email protected] Abstract canals which can be used by Sagarmala project. India has mechanised crafts. As also signed MOU with South Since about 95 per cent of compared to some other Korea in 2016 for co-operation India's trade by volume and 70 countries, India's waterways are and mutual assistance in port- per cent in terms of value is highly underutilised so far in related matters. In addition, the being carried out via the respect of freight DP World of Dubai, a leading country's maritime route, there transportation. India has now global operator of marine and is a continuous need to develop decided develop 111 national inland terminals, has pledged to India's ports and trade-related waterways. Of this, 32 new invest $ 1 billion in India's infrastructure, including inland national waterways and five marine infrastructure. This is in waterways, to accelerate the existing ones are to be addition to the $ 1 billion it has growth of the country's developed in the next three already invested here earlier. manufacturing industry. years. DP World has also emphasised that there is a need for India to India has 12 major ports – six The present Government has increase its container handling on the country's west coast and introduced a new ambitious capacities at ports in order to be six on the east coast. In initiative called SAGARMALA able to reach internal markets, addition, there are nearly 200 for setting up more that 6 mega invest in cold storage facilities minor ports in the country. ports, modernisation of several and networks as well as using Indian ports handled about existing ports, development of coastal and internal waterways 1,135 million tonnes of cargo some new coastal economic to increase efficiencies and in 2016-17. Of this, around 57 zones and at least 29 Coastal lower costs. per cent was handled by major Economic Units, development In another encouraging ports and the rest by non-major of mines, industrial corridors, rail, road and airport linkages development, the Indian ports. Most of the traffic at Register of Shipping (IRS), a non-major ports was handled with these ports. T hese schemes are expected to result leading classification society, is by only 15 ports, which are setting up a Centre for privately owned on long-term in US $ 110 billion export revenue growth, generation of Excellence in Maritime and lease from the State Shipbuilding (CEMS) in Governments. 150,000 direct jobs and several times that number of indirect association of Ministry of India has a long coastline of jobs when all the projects are Shipping and Siemens, with over 7,500 km. housing the completed. campuses at Visakhapatnam country's major and non-major and Mumbai. The Centre is ports. In addition, it has an In an encouraging expected to create world-class extensive network of inland development, American ports lab infrastructure. waterways with total navigable have evinced interest to help India in a comprehensive port- From the foregoing analysis, it length of 45,500 km. - 5,200 is clear that Indian maritime km. of rivers and 4,000 km. of led development, including the u84 March 2019 MEDC Economic Digest Cover Story sector is poised to make and expand port capacities. The Gujarat 40 significant progress with allocation on ports increased Maharashtra 53 capacity additions and from Rs.6,904 crore during the Goa 5 improved efficiency over the 11th Plan to Rs.15,764 crore Karnataka 10 next few years. Some during the 12th Plan – up 128 Kerala 13 improvements are already per cent. As a result, capacity of Diu & Daman 2 visible over the last two years major ports more than doubled Lakshadweep islands 10 with Indian ports improving from 397.50 million tonnes in Pondicherry 1 their market share and 2004-05 to 871.52 million Tamil Nadu 15 improving their operational tonnes in 2014-15 during this Andhra Pradesh 12 profit to some extent. period. Odisha 2 Detailed Analysis Incidentally, the activities at West Bengal 1 minor ports have been Andaman & Since about 95 per cent of Nicobar Islands 23 India's trade by volume and 70 increasing at a greater pace than per cent in value terms is via the in major ports in recent years. India also has an extensive maritime route, there is a Non-major ports have been network of inland waterways continuous need to develop more successful in attracting with a total navigable length of and upgrade India's ports and higher private investment 45,500 km. Of this, 5,200 km trade related infrastructure to because they are perceived to be of the rivers and 4,000 km of accelerate the country's growth more business-oriented and canals can be used by in manufacturing industry and customer friendly, cheaper in mechanised crafts. However, as to assist the country's 'Make in general and more efficient. compared to the US, China and India' initiative. India has 12 Major Ports (12) the European Union, freight transportation by inland major ports and approximately * West Coast 200 non-major ports. waterways is highly 1. Kandla (Gujarat) underutilised in India. India has Indian ports handled about 2. Mumbai (Maharashtra) now prepared a plan to develop 1,135 million tonnes of traffic 3. Jawaharlal Nehru 111 national waterways. Of in 2016-17. Of this 57 per cent (Maharashtra) this, 32 new national waterways was handled by major ports 4. Marmugoa (Goa) and 5 existing ones are to be under the purview of 5. New Mangalore developed over the next three Government of India and the (Karnataka) years. rest was handled by non-major 6. Cochin (Kerala) ports under the purview of Inadequate port State Governments. Most of * East Coast infrastructure the non-major port traffic is 1. Tuticorin (Tamil Nadu) India's geographical location is handled across 15 ports, most 2. Chennai (Tamil Nadu) central to key international of which are privately owned 3. Ennore (Tamil Nadu) trade routes across the Indian on long-term lease by the State 4. Visakhapatnam (Andhra Ocean between Europe and Governments. Pradesh) Asia. It has a long coastline of Considering the need for 5. Paradip (Odisha) over 7,500 km. Its major ports increase in fleet requirement 6. Kolkata, Haldia (West serve as the country's gateway and expansion in port capacity, Bengal) to global trade. This advantage the government has been Minor Ports (187) offers India a great opportunity allocating funds to modernise *States/Union Territories to grow into a maritime hub.

MEDC Economic Digest March 2019 u85 Cover Story

Yet, inadequate port sector. As per government which is in the range of 11 infrastructure and poor port policy, 100 per cent FDI is hours at the Jawaharlal Nehru connectivity has kept India allowed in port development Port and the average from realising its full maritime projects. As an additional turnaround time is about two potential. Despite an increase incentive, 100 per cent income and half days. In Singapore, for in traffic volume and port tax exemption has been given to instance, the corresponding capacity in recent times, Indian companies investing in port numbers are three hours and ports continue to infrastructure. Further, a 10- half a day respectively. These underperform globally. The year tax holiday has been given low performance indicators in World Bank's global to enterprises engaged in the India are primarily because of performance index ranked business of developing, the poor rail and road India 135 among 160 countries, maintaining and operating infrastructure connecting the behind many Asian economies ports, inland waterways and ports with the hinterland in such as Singapore (5), and inland ports. India. Malaysia (32). Issues in Port Development Need to increase container capacity While the sector is witnessing There is immense potential for some movement on rising modernisation and growth of India's total containerised traffic and addition to capacity Indian ports. The main cargo capacity of 8.75 million in recent years, experts within problem is that due to pressure tonnes at all its 12 major ports the industry say that from trade unions, the put together - a key indicator of infrastructure development government has not been able a country's integration with related to ports should not be to modernise the country's global supply chains for value- limited to developing and major ports to the extent added manufactured goods - is expanding a port's possible. As a result, Indian less than a quarter of infrastructure in isolation and ports are highly overmanned containerised goods handled the government should look at making a direct impact on at China's single port of the holistic development and efficiency. Political pressure, Shanghai. This makes it connectivity with the lack of autonomy, absence of imperative for us to do a fast hinterland with roads and incentives, excessive catching up, says a railways. Also, more funds bureaucracy, and hierarchical comprehensive study on ports would be needed to link inland rigidities are contributors to the by ASSOCHAM. waterways to various ports to current state of Indian ports. facilitate healthy growth of It is only recently that coastal shipping and enhance Compared to the large containerised cargo, which is last-mile connectivity with international ports, India lags easy to load, unload and can be major ports. behind badly. For instance, the carried to the hinterland largest port in the world in through multi-modal transport, The Ministry of Shipping, the Hong Kong processes about is catching up in India. nodal agency for ports, 5.4 million TEUs (twenty ft. Moreover, it is the volume of encompasses the shipping and equivalent units) In contrast, at containerised traffic which the ports sector, including ship the Jawaharlal Nehru Port – reflects the level of building, repair, major ports India's largest container port, manufacturing and value and inland water transport, has handles only about 2 million addition that a country has been making efforts to tackle TEUs. There are also problems achieved for itself in the global the problems affecting the with average pre-berthing time market. China has four ports u86 March 2019 MEDC Economic Digest Cover Story which handle more than 20 entailing 6+ mega ports, major ports. Out of the 116 million tonnes of containerised modernisation of several more initiatives, 70 have already been cargo – Shenzen, Ningbo and ports, development of 14+ implemented so far. Zhoushan and Hong Kong. Coastal Economic Zones and Enhancing the “Ease of Doing Sagarmala Port at least 29 Coastal Economic Business” by streamlining the development Project Units, development of mines, procedures is also a major focus industrial corridors, rail, road area under the programme. 42 Since there is a continuous need and airport linkages with these actions points have been to develop India's ports and ports, resulting in US$ 110 identified, specifying trade-related infrastructure to billion export revenue growth, responsibility of concerned accelerate the country's growth generation of 150,000 direct stakeholders/agency in respect in manufacturing industry and jobs and several times more of each action point with to assist 'Make in India' indirect jobs. It aims to specific reference to Jawaharlal initiative, the government has modernise major ports so that Nehru Port. Intensive drawn up an ambitious port led development can be monitoring of these is yielding programme called Sagarmala augmented and coastlines can good results and 35 action port development project. As be developed to contribute to points have already been per the studies carried out India's growth significantly. achieved. under this programme, it is The project report has been expected that by 2025, cargo For improving the operational efficiency, a study to prepared by consulting firm traffic at Indian ports will benchmark the performance of Pricewaterhouse Coopers Pvt. increase to approximately 2,500 major ports in the country to Ltd. The projects have been million metric tonnes per comparable international ports proposed on the basis of skill annum (MMTPA ) from the has already been completed and gap studies in the coastal existing capacity of 1,500 the recommendations of the districts. The projects have MMTPA. study are being implemented. been divided on the basis of Hence, a roadmap has been Through this benchmark study, providing self-employment and prepared for increasing the 116 initiatives have been wage employment. cargo handling capacity of identified for implementation Looking at the number of Indian ports to 3000 plus during 2016-18 which are projects and the total estimated MMTPA by 2025 to cater to the expected to improve the investment, as also the plan to ever growing traffic. This operational efficiency and train as many as 1.3 million includes improvement in profitability of the country's 12 people proposed to be trained operational efficiency of ports, capacity expansion of existing Components of the project ports and development of new S. No. Project Theme No. of projects Project cost ports. Due to these initiatives, some improvement is already 1. Port modernisation 189 US $ 22 billion visible with average turnaround 2. Connectivity enhancement 170 US $ 36 billion time of ships improving to 2.08 days from 2.32 days in 2013-14. 3. Port-linked industrialisation 33 US $ 66 billion Sagarmala is a strategic and customer-oriented US $ 130 4. Coastal community development 23 US $ 660 million billion investment initiative of 5. Total 415 US $ 130 billion the Government of India

MEDC Economic Digest March 2019 u87 Cover Story across India's 21 coastal New port development implementation and operation; districts in trades such as In order to fill the demand gap, *Change in revenue model. fishing, logistics, 6 new major ports are planned manufacturing and tourism, as The cabinet has also appointed part of the government's which will bring in significant a committee under the Sagarmala programme, it capacity expansion. After chairmanship of Finance appears that the proposal to detailed discussion and Minister Arun Jaitley to complete the entire deliberations relating to the examine whether the new MCA programme by 2025 as origin-destination of cargo can be applied to the 12 stalled proposed, may be extremely commodities and the projected port projects with an estimated difficult to achieve. traffic, it has been decided to project cost of Rs.20,000 crore. develop the new ports at: In this context, it may be The other members of the Committee are Law Minister recalled that the Sagarmala l Vadhvan (Maharashtra) Ravi Shankar Prasad, Shipping project was originally mooted l Sagar Island (West Bengal) Minister Nitin Gadkari, and a by the NDA government under l Paradip outer harbour NITI Aayog member. Atal Bihari Vajpayee in 2003 as (Odisha) a waterway equivalent to the l Cuddalore/Sirkazi (Tamil The new MCA will also be Golden Quadrilateral for Nadu) applicable for all new projects transforming India's vast l Belikeri (Karnat ka) anda conceived under the Shipping coastlines and waterways to l Enayan (Tamil Nadu) Ministry's ambitious Rs.8 trillion Sagarmala Programme, drive industrial development. Plan for radical makeover of under which the government However, subsequently under the sector UPA Governments I & II, it plans to construct new ports received much less attention. On January 3, 2018 the Union and 142 cargo terminals at Now also, much will depend on Government approved a new major ports to harness the the success in the model concession agreement country's 7,157 km coastline. implementation of this (MCA) for private-public M0U with South Korea ambitious project, including partnership (PPP) for port raising the required resources. projects. This will permit easier The Union Minister of Road Transport, Highways and Existing Major Ports exit for promoters. The new model agreement aims to Shipping, Mr. Nitin Gadkari As part of the Sagarmala revitalise India's port sector. has signed a memorandum of programme, Master Plans have The new features of this model understanding (M0U) with the been identified for the 12 major are: Government of South Korea ports. Based on the same, 142 for co-operation and mutual port capacity expansion *Change in equity holding to assistance in port related projects involving total cost of provide exit route to matters in 2016. This is Rs.91,434 crore have been promoters; expected to help both countries identified for implementation *Provision for quick dispute to encourage and facilitate the till 2035. The capacity addition resolution mechanism and development of ports and port-related industry by sharing during the last three years from revival of stalled Projects; of technology, experiences in 2013-14 to 2015-16 was 55.61 *Refinancing of debt; the development of ports etc. MMTPA, 70 MMPTA and This MoU will be of great help 93.84 MMPTA respectively. *Enabling higher productivity; to India since the Indian *Improving project u88 March 2019 MEDC Economic Digest Cover Story

Government also plans to ports, of new berth/terminals be in addition to its existing $ 1 overhaul some 300-odd dry in existing ports, coastal billion investment here, DP ports in the country to resolve economic zones, dredging, ship World's Group Chairman and the infrastructural constraints repairing, ship recycling, CEO Sultan Ahmed Bin faced by the country's development of inland Sulayem said. The Dubai-based exporters and importers and to waterways and coastal and operator said that it is looking at provide a fillip to India's cruise shipping. several investments in India in foreign trade. The existing Sagarmala, with 150 projects the logistics sector and on-line infrastructure is quite has the potential of mobilising transactions of customs inadequate to meet the USD 50-60 billion of services. “India offers existing country's growing needs in this infrastructure investment and opportunities to us,” he said. field. Also due to heavy another USD 100 billion for “Our expertise can help India monsoon, but for Mumbai, promoting industrial growth in to grow faster in this space as Kandla and Cochin, all other the area. Gadkari said, the millions of tonnes of wheat ports on the western coast are Indian government has agreed and thousands of tonnes of not used from the month of to provide clusters for ancillary fruits and vegetables get wasted May to the month of August. industrial support and design for want of warehousing,” The other ports on the eastern centres, as well as financial Sulayem said. He was coast of India are shallow and assistance to meet the challenge addressing the inaugural not able to accommodate large of lack of comprehensive session of India Integrated and ships that are used by most advantage due to heavy Transport Logistics Summit countries nowadays. subsidies provided by major 2017 in New Delhi. India, US to enhance co- shipbuilding countries to their Drawing a comparison operation shipbuilding industry. between India and China, American ports have evinced Gadkari told the US maritime Sulayem said, while these two keen interest to extend co- sector that thematic studies and economies have maximum operation in a comprehensive action plans have been population, there is a huge port-led development with developed across the sector for difference in the amount of India, especially in the implementation, prominent cargo handled in both ambitious Sagarmala elements of which include countries. While China handles Programme. The Union coastal shipping revolution, 100 million containers, India Minister, Nitin Gadkari during coastal Industrial green-field handles barely 10 million, he his US visit and his meeting plants, reducing time to export said. He noted that DP world with US officials, explored joint containers by five days and has invested in the venture opportunities with reducing the cost of exports by development of international India's flagship container $ 50 per container. gateway ports in India. There is handling Jawaharlal Nehru Port also a great need to reach DP World to invest $ 1 billion internal markets, invest in cold (JNPT) to promote transfer of more technology and enhance storage facilities and networks, bilateral commerce between Leading global operator of as well as using coastal and the two countries. marine and inland terminals, inland waterways to increase DP World has pledged to invest efficiencies and lower costs, he The Union Minister offered $ 1 billion more in India's noted. investment opportunities in marine infrastructure. This will In a new development, India's building and developing new National Investment and

MEDC Economic Digest March 2019 u89 Cover Story

Infrastructure Fund (NIIF) on and Mumbai. The land and needs and develop appropriate January 21, 2018 announced a $ building for the ship designs catering to the 3 billion platform in Visakhapatnam campus has requirements for the partnership with DP World to been provided by the Indian development and growth of invest in ports, terminals and Maritime University, and the Indian shipping. The other logistics. “The platform will Mumbai campus has been salient features are: invest in opportunities in the provided by IRS. The required *CEMS will train students to ports sector, and beyond sea physical infrastructure already hone their skills in line with the ports into areas such as river exists at both the campuses and needs of the port and maritime ports and transportation, only minor changes and industry on the engineering and freight corridors, port-led upgrades are required. By using technical fronts. Special Economic Zones, existing buildings and other inland container terminals, and infrastructure facilities, the *The training at CEMS would logistics infrastructure, Centre would be able to create include ship designing, including cold-storage”, the world-class lab infrastructure. manufacturing, as also Finance Ministry said in a operating, maintenance, repair Siemens has been entrusted and overhaul. statement. with the task of developing There is no doubt that further training curriculum and *The Centre would also aim to co-operation with DP world is content, train the trainers, attract students from going to help India improving conduct training sessions, neighbouring countries, such as its maritime infrastructure manage certification process, Sri Lanka, Bangladesh, significantly in the coming etc. Siemens will also be Thailand, Malaysia and years. In particular, India contributing technology, Indonesia. should use this higher expertise and 87 per cent of the From the foregoing analysis it is investment to increase its funding for the centre, which clear that the recent initiatives container handling capacities in will have a capacity for training by the Government should the existing as well as the new over 1000 students a year. The pave the way for significant ports that are being planned understanding is that Siemens capacity additions in cargo under the Sagarmala project. will run the Centre for two handling as well and improved Involvement of Siemens years and then hand it over to a operational efficiency of the non-profit company promoted country's maritime sector over Indian Register of Shipping by IRS. the next few years. Efforts are (IRS), a leading classification also on to increase the society, is setting up a Centre of The CEMS will primarily cater to the need for designing of containerised cargo and Excellence in Maritime and ensuring better connectivity of Shipbuilding (CEMS) in commercial ships in India for sea-going, coastal and inland major ports with the hinterland association with Ministry of through rail and road. Shipping and Siemens with waterways operations. This campuses at Visakhapatnam would support various Indian shipyards for their ship design

u90 March 2019 MEDC Economic Digest MEDC Economic Digest March 2019 u91 Publishing date on 5th of Every Month RNI No. MAHMUL/2018/76179 Posted at Mumbai Patrika Channel Sorting Office Postal Regd. No. MCS/222/2019-2021 Mumbai - 400 001 on dated 5th of Every Month License to post without prepayment WPP License No.: MR/TECH/WPP-356/SOUTH/2019