In an exclusive interaction with The Dollar Business, Mansukh Lal Mandaviya, Minister of State for Road Transport and Highways, Shipping, Chemicals and Fertilisers, discusses at length the initiatives taken up by his government to create an enabling environment for these sectors and how he plans to overcome the global challenges hampering their growth.
Interview by Ahmad Shariq Khan & Niladri S. Nath | August 2017 Issue | The Dollar Business
TDB: What have been the biggest achievements of the Ministry of Road Transport and Highways?
Mansukh Lal Mandaviya (MLM): The Ministry of Road Transport and Highways has set an ambitious target of completing 2,00,000 km of national highways over the next five years. The country presently has more than 1,14,000 km of national highways, and the Ministry has, in principle, approved construction of another 46,000 km of the same. The Ministry has also received the approval of the Cabinet Committee on Economic Affairs (CCEA) for implementing the Toll-Operate-Transfer (TOT) model in 75 public-funded national highway projects. We are also planning to construct multi-modal logistics parks under the Logistic Efficiency Enhancement Programme (LEEP) to improve freight and passenger mobility.
TDB: Can you throw some light on the latest projects of NHAI?
MLM: As of now, the National Highways Authority of India (NHAI) has taken up three projects under the Special Accelerated Road Development Programme for the North-Eastern Region (SARDP-NE). These projects will cover 6,418 km of highways, out of which contracts for 5,215 km have been awarded. So far, 2,221 km of roads under this programme has already been constructed.
TDB: How is the Ministry encouraging the private sector to participate in the development of highway projects?
MLM: In the highway sector, the Ministry is encouraging participation in projects through public-private partnership (PPP) route. At the moment, the build-operate-transfer-toll (BOT-Toll) mode remains the preferred mode of project delivery, but the Ministry is encouraging PPP with hybrid annuity and toll-operate-transfer models.
TDB: What are your top priorities when it comes to the shipping sector?
MLM: In the shipping sector, developing inland waterways is a priority. The Parliament has already passed the National Waterways Act, 2016, for the development and maintenance of the five existing and 106 new national waterways. And we are now implementing the Act.
TDB: In what ways will the inland waterways benefit India?
MLM: Inland water transport is cost effective, logistically efficient and environment-friendly, and will help in diverting traffic from our over-congested roads and railways. Compared to movement by road or rail, the cost per tonne-kilometre of cargo movement is likely to be 60-80% less through coastal shipping or inland waterway routes. At present, railway’s modal share in cargo movement is 31%, whereas the combined modal share of coastal shipping and inland waterways is only 6%. If we look at the case of coal transportation in India, as much as 90% of the rail routes relevant to coal movement are running at over 100% capacity. And, with the expected ramp-up in coal production, the country may need to move 1,000 to 1,200 million metric tonne (MMT) of coal per annum across the country by 2025. This will put tremendous pressure on our already congested railways. Not to say, inland waterways will be a sustainable solution to this cargo challenge. Additionally, inland waterways will provide a dependable investment option to the private sector.
TDB: What is the Ministry’s roadmap for port-led industrialisation?
MLM: The Ministry has developed an integrated and comprehensive plan for port-led industrialisation, which will leverage the growth potential of the port-linked industries, competitive locations as well as connectivity to industrial areas. The programme will be implemented through coastal economic zones (CEZs) and industrial clusters.
TDB: Shipping Ministry recently held a review meeting on the performance of ports. Could you elaborate on that?
MLM: The key topics discussed were ensuring cashless transactions at all ports and setting a target for reducing fixed costs. These will help us prepare a common implementation plan to enhance port productivity. We will link the common plan with berthing policy at ports and enhance rail connectivity to ports.
TDB: What significant initiatives have the Ministry of Chemicals & Fertilisers undertaken since you took charge?
MLM: So far, the Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana (PMBJP), the flagship scheme of the Department of Pharmaceuticals (DoP), has made significant progress – today there are more than 1,600 PMBJP stores across the country. Also, coronary stents have been included in the National List of Essential Medicines (NLEM). The National Pharmaceutical Pricing Authority (NPPA), under the DoP, has capped the ceiling price of these stents as per the provisions in Drug (Prices Control) Order, 2013 – reducing the cost of stents by up to 85%.
Also, thanks to the 100% neem coating on urea fertilisers, the instances of diversion of urea for commercial usage has become negligible and hence there has been no instances of shortage of urea.
The reduction in prices of diammonium phosphate (DAP), muriate of potash (MOP), and nitrogen, phosphorus and potash (NPK) fertilisers has led to balanced fertilisation. The implementation of the Direct Benefit Transfer (DBT) has been a success. The department is planning to introduce DBT across the country. The Ministry is also working towards the development of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs), Central Institute of Plastics Engineering & Technology (CIPET) and National Institute of Pharmaceutical Education and Research (NIPER).
TDB: In what ways will PCPIRs benefit India’s economy?
MLM: The concept of PCPIR is based on the cluster approach. These special investment regions facilitate large-scale manufacturing of petroleum, chemical and petrochemicals in an integrated and environment-friendly manner. Hence, the government is promoting PCPIRs to give a fillip to the sector.
As per the data provided by the states, in December 2016, a total investment of about Rs.1.75 lakh crore has been made in four PCPIRs: Visakhapatnam-Kakinada in Andhra Pradesh, Dahej in Gujarat, Paradip in Odisha and Cuddalore-Nagapattinam in Tamil Nadu. These PCPIRs have also generated employment for approximately 2.74 lakh people.
TDB: What is the latest development on the reverse SEZ in Iran?
MLM: The government has expressed interest in setting up chemical and petrochemical industries at the Chabahar Free Trade-Industrial Zone in Iran. However, this is subject to Iran offering rich gases such as ethane, propane, etc., at a competitive price to us on a long-term basis.
TDB: What are you doing to reduce our dependence on active pharmaceutical ingredients (APIs) imports?
MLM: India is a signatory to the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement. As a result, import restrictions were removed. Thereafter imports made on the basis of economic parameters have led to the dependence on imports. As India today manufactures and exports several APIs and bulk drugs, the government is adopting various policy initiatives to discourage imports. One measure is the withdrawal of exemption of customs duties extended to certain categories of drugs. Our objective is to provide a level playing field to our manufacturers.
TDB: How are you handling the concerns about eco-hazards of the chemical and fertiliser industry?
MLM: The Department of Chemicals and Petrochemicals is imparting training to upgrade skills of workers in this industry. Through seminars and workshops, we are creating awareness on waste management.
Perceptions regarding polluting characteristic of plastics is being addressed by promoting effective collection, segregation and adoption of recycling technologies and sensitising all stakeholders, including concerned municipal and industry associations.