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International Container Transshipment Terminal, Vallarpadam Mukt Shabd Journal ISSN NO : 2347-3150 International Container Transshipment Terminal, Vallarpadam: Milestone to Inclusive Growth Emilson .V.V Research Scholar, Dept. of Applied Economics, Cochin University of Science and Technology, Kochi- 682022 Abstract International Container Transshipment Terminal, Vallarpadam is one of the prestigious projects introduced by the Govt. of India is now in economic progress. Apart from some minor issues the project has opened up ample opportunities in the economy in different ways. This study has been attempted to bring out the opportunities, issues and challenges associated with the terminal. The proper guidance and timely interventions of the government will definitely boost the business activities and profitability of the terminal to a great extent thus Indian economy can enjoy various benefits from port sector. Key Words: International Container Transshipment Terminal, Vallarpadam; Development; Port Based Special Economic Zone; Growth; Opportunities; Socio-Economic Status; Draft; Cabotage Law; Environmental Pollution; Land Price; Rehabilitation. Introduction The Indian Maritime history started in the 3rd millennium Before the Common Era (BCE) after the Indus Valley Civilisation. India is a major maritime nation by efficacy of its long coast line of around 7517 Kms on the western and eastern shelves of the mainland and also along the islands, set with 13 major and 187 non-major ports, strategically located on the world’s shipping routes, its long tradition of seafaring with a large pool of trained maritime personnel, and its dynamic and rapidly globalizing economy with a vast potential to expand its participation in trade and development. India, one of the dynamic economies in the world with a massive market, a billion plus population and strong Gross Domestic Products (GDP) growth rates of over 9 per cent for three consecutive years up to 2007. However, due to the global break-down and recession, the GDP growth slowed down to 7.4 per cent in 2009. But, with global recovery under way and backed by Volume IX, Issue VII, JULY/2020 Page No : 1929 Mukt Shabd Journal ISSN NO : 2347-3150 strong decisive policy responses, the economy performed better in 2010 and achieved growth rate of 10.4 per cent. After recovering in 2010, GDP growth slowed down to 7.2 in 2011 and 6.5 in 2012 then to the decade's low of 3.2 percent in 2013. It picked up marginally to 4.7 percent in 2014. It is likely to grow between 5.4 percent and 5.9 percent during 2015. In 2016 it reached at 7.6 per cent and slowed down to 6.7 in 2017, due to shocks of "Demonetisaton" in 2016 and introduction of Goods and Services Tax in 2017. As forecast made by many global institutions, India along with China will lead Asia’s economic expansion in the near future. Ports play a crucial role in the overall economic development of the country. About 85 per cent by volume and 75 per cent by value of the country’s international trade is carried on through maritime transport. Development of India’s ports and trade related infrastructure will continue to be critical to sustain the success of accelerated growth in the Indian economy. Despite record growth rates, the merchandise trade intensity of India’s GDP is still below 43 per cent. This indicates that there is still a lot of untapped potential for trade growth, and consequently the demands on the country’s ports and trade infrastructure will continue to mount as trade diversifies and grows. Hence, there is a need to expand the Country’s ports in a timely and efficient manner. India’s ports comprise of 13 major ports (12 Government-owned and one private) and around 187 notified minor and intermediate ports along the coast and islands. The Major Ports are under the Union List (Schedule VII) while the Non-Major Ports are under the Concurrent List (Schedule VII) of the Constitution of India. The 13 major ports are administered by the Central Government under Ministry of Shipping. The remaining ports which are referred to as Non- major ports are administered by the nine maritime States and three Union territories within their respective coastlines. During financial year 2018, cargo traffic at major ports in the India was reported at 679.36 million tonnes (MT). In financial year 2019 traffic has increased 2.90 per cent year-on-year to 699.05 million tonnes. Cargo traffic at non-major ports was estimated at 491.95 million tonnes financial year 2018 and grew at 9.2 per cent CAGR between financial year 2007-2018. The major ports had a capacity of 1,452 million tonnes by financial 2018 end. The Maritime Agenda 2010-20 has a 2020 target of 3,130 MT of port capacity. The government has taken several Volume IX, Issue VII, JULY/2020 Page No : 1930 Mukt Shabd Journal ISSN NO : 2347-3150 measures to improve operational efficiency through mechanisation, deepening the draft and speedy evacuations. The Ministry of Shipping, Government of India has commenced many path-breaking measures to attain the desired objective of transforming Indian Ports into world class facilities suited to the requirements of the future economy of India, which will enable enhanced private investment, improve the service quality and promote competitiveness, apart from achieving the expansion of capacities in the country. Such measures include formulation of Maritime Policy, revision of various operational policies, preparation of Perspective Plans for the major ports, commissioning of two more major ports one each on the East Coast & the West Coast, introduction of Port Community System (PCS), paperless regime, etc. Primary Benefits of Ports Jobs, labour income, business earnings and tax revenues generated by the port construction and operation activities are the major direct regional benefits of ports. Secondary Benefits of Ports When it’s initial generated labour income, business earnings and tax revenues are subsequently or partially spent in the region. These expenditures include; Restaurants, or entertainments and professional services will generate additional labour income, business earnings and tax revenues within the region. This process will lead to second or third or further rounds of spending. When the re-spending is used up, the total labour earnings, business earnings and tax revenues in the region will have increased by more than their initial amounts by a factor greater than one(i.e. by the multiplier co-efficient). An increase in total spending in the region will be the combination of initial spending and secondary spending. Thus the secondary benefits of generated jobs, labour income, business earnings and tax revenues from the spending and re-spending are termed as indirect regional spending benefits of the port. The volume of above mentioned benefits will be reduced if there are any regional leakages. If, in construction or expansion of a port, workers may be employed and materials purchased are lost to other regions. At the same time the direct benefits of the port will be less, if the recipients of Volume IX, Issue VII, JULY/2020 Page No : 1931 Mukt Shabd Journal ISSN NO : 2347-3150 labour income and business earnings from operation of the port are not residents of the region. When direct benefits are lost, indirect or secondary benefits will also be lost beacause the latter occur from the former. From this it is clear that if the port’s direct benefit income and business earnings are not spent in the region then the corresponding indirect benefits from the expenditures will be zero. Tertiary Benefits of Ports Besides the direct and indirect benefits of a port, the port may also create tertiary benefits. Port’s tertiary benefits arise from improvement in the region’s transportation because of the existence of the port. If the port’s region is fledged with good rail, road and trucking services probably it will help the reduction in transit times for cargo movements within the region, which may increases in the accessibility of shippers to regional, national and international markets. But this may be adversely affected when there are any sorts of highway congestion. International Container Transshipment Terminal (ICTT), Vallarpadam In 2004, Dubai Ports (DP) World got the permission to operate the Rajiv Gandhi Container Terminal and to develop the International Container Transshipment Terminal at Vallarpadam. DP World is a market leader in Indian container terminal operations and has the largest portfolio of ports along the Indian coastline including terminals in Gujarat (Mundra), Maharashtra (Nhava Sheva,) Tamil Nadu (Chennai), Andhra Pradesh (Vishakapatnam) and a state of the art transshipment facility in Kerala (Vallarpadam). ICTT, the first trans-shipment terminal in India is part of the Cochin Port Trust in Kochi, in the state of Kerala and also the first container terminal to operate in a Special Economic Zone. Cochin Port is located close to the East-West trade route, just eleven nautical miles away from the direct Middle East – Far East sea-route. No other Indian port enjoys such a strategic geographic proximity to the major maritime sea routes. DP World Cochin is the natural gateway to the vast industrial and agricultural produce markets of the South & West of India. The hinterland of the port includes the state of Kerala and parts of Tamilnadu and Karnataka. Improved road and rail connectivity have substantially reduced the transit time and logistics cost making Cochin Port a preferred gateway for exports & imports from to the hinterland. Volume IX, Issue VII, JULY/2020 Page No : 1932 Mukt Shabd Journal ISSN NO : 2347-3150 International Container Transshipment Terminal (ICTT), Vallarpadam is the largest single operator container terminal in India with 115.25 ha of land area. The Ministry of Commerce, India has notified Vallarpadam, an Island in Kochi as an international transshipment hub of India.
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