Asia/Pacific News
Indian Official Calls for Duty-Free Bunkers for Coastal Ships
An Indian official has proposed offering duty-free bunkers and separate berths at major ports for coastal ships in an effort to increase the amount of cargo moved along the nation's coasts, the Hindu Business Line reports.
Director-General of Shipping Gautam Chatterjee, who made the proposal at a conference organised by the Confederation of Indian Industry (CII) Tuesday, also suggested that flexible manning rules and fiscal relief could divert more cargo from land transport to waterways.
Coastal shipping represents only 8 percent of goods moved in the country, while roads and rail make up 60 percent and 30 percent respectively.
"Traditionally, we have seen that roadways, railways and aviation have been beneficiaries of a host of subsidies, such as interest subvention, credit facilities and outlays," Chatterjee said.
"Coastal shipping has been left to fend for itself."
He added that coastal vessels face the additional burden of charges including pilotage, berth hire and service tax.
"High bunker costs have been identified as a serious stumbling block for development of coastal shipping," Chatterjee said.
"Bunker costs account for close to 40 per cent of the total operating cost, so we have to see if duty-free bunker can be provided for coastal ships."
A CII report found that coastal transport is underutilised partly because of high port costs, shallow draft at non-major ports, and difficulty moving goods from ports to destinations.
The Shipping Corporation of India Ltd. (SCI) reported difficulty in the Indian shipping market last year, partly because of high bunker costs, but the company's managing director said he expected to see improvement in mid-2013.
