This Is Why Mamata Banerjee’s Dream ‘Tajpur Port’ Project Is Unlikely To Take Concrete Shape
As of now, the Adanis have only been given a letter of intent by the Bengal Maritime Board for the Tajpur port project.
A lot more paperwork, and crucial groundwork, needs to be done before the Adanis invest a single Rupee in the project.
The Bengal government had, earlier this week, announced with a lot of fanfare the awarding of the overly ambitious Tajpur Port project to the Adani Ports & Special Economic Zone Ltd (APSEZ).
State urban development minister Firhad Hakim announced Monday that the state cabinet had approved APSEZ’s bid to develop the greenfield port at Tajpur with an investment of Rs 25,000 crore.
This will be the largest investment in Bengal in decades and chief minister Mamata Banerjee is showcasing it as proof of Bengal earning investors’ confidence and emerging as an attractive investment destination.
The proposed port:
Tajpur, a small seaside destination about 170 kilometers southwest of Kolkata, is quite underdeveloped at present.
It is a little over five kilometres off National Highway 116B and the nearest railway station--Ramnagar, is about nine kilometres away. A very narrow and congested road with densely populated settlements on both sides connects Tajpur to NH 116B.
Tajpur has a deep draft--’depth’ in layman’s terms--of 12.1 metres. During high tide, the water level goes up by 3.9 metres, and this will give the proposed port a net 16 metres draft facility. That means large ‘capesize’ ships with upto one lakh dead weight tonnage can dock at Tajpur.
Deadweight tonnage (DWT) is the total weight of a vessel, including that of its cargo, fuel, passengers, machinery, other equipment and fixtures.
Huge ships are called ‘capesize’ vessels because they cannot sail through the Panama canal and have to sail around the Cape of Good Hope to sail between the Pacific and Atlantic Oceans.
Bengal’s existing ports--Haldia and Kolkata--do not have that depth (or ‘draft’) and can accommodate only smaller vessels.
APSEZ is supposed to invest Rs 15,000 crore to build the port and another Rs 10,000 crore in port-related infrastructure development.
The state government will hand over 125 acres of seafront to APSEZ to build the port and another 1000 acres about four kilometres away for building related infrastructure and industrial facilities.
The state government has announced that the port will provide direct employment to 25,000 people and indirect employment to another one lakh.
Why the Tajpur port is important for Mamata Banerjee:
Despite her best efforts, Mamata Banerjee has been unsuccessful in attracting big ticket investments to Bengal over the last eleven years that she has been in power.
Big investors have given the state a wide berth and remain unconvinced of Bengal having turned industrial-friendly under Mamata Banerjee.
Over the past decade, flashy investment jamborees organised by Mamata Banerjee have attracted only a few investments in the small and medium-scale sectors.
Mamata Banerjee realises that without big industries or projects coming up in the state, Bengal’s finances will not improve and unemployment will continue to rise. That will push her into a tough political corner and harm her electoral prospects in the very near future.
She desperately needs a mega project to convince potential investors that Bengal is a safe and attractive place to invest in. A mega project like Tajpur port can act as a magnet for other investors to come to Bengal.
Why the Tajpur port project it is unlikely to happen:
These are a few important and tangible reasons for the entire project unlikely to get off the ground:
Dhamra & Pradip ports are nearby: The proposed Tajpur port will have to compete with two thriving ports--the Dhamra port which is also run by Adani and the Paradip port operated by the Union Government.
Dhamra is less than 200 kilometres away from Tajpur while Paradip is about 290 kilometres away.
Both Dhamra and Paradip are deep sea ports and berth the largest capesize vessels. Both have excellent infrastructure and are connected by six and eight-lane highways and by rail.
According to Union Ports & Shipping Ministry officials, both Dhamra and Paradip ports can handle more traffic and are also very well-equipped to add to their existing capacities to handle more traffic in future.
That will leave little cargo for Tajpur to handle even in future.
Also, both are located in Odisha where the industrial climate and infrastructure is much better than Bengal.
Dhamra and Paradip are already catering to exports from and imports by the mineral rich hinterlands of Odisha, Jharkhand, Chhattisgarh and Bihar and the industrial belts in the neighbouring states. Tajpur, despite the tall claims by the Bengal government, will never get much traffic.
Grossly unreasonable employment generation target set by Bengal: The Bengal government has already announced that the port will provide direct employment to 25,000 people and indirect employment to one lakh.
These are grossly inflated and unachievable targets. The APSEZ will not be interested in building and running a labour-intensive port.
The Dhamra port, for instance, is highly mechanised and directly employs only a few hundred people. All cargo handling operations in Dhamra are fully mechanised.
APSEZ will, thus, not be able to provide employment to the 25,000 people in Tajpur port as the Bengal government wants it to.
For Mamata Banerjee, providing jobs to the millions of unemployed people in Bengal is very important. She cannot justify (to her supporters) her support to any project in Bengal that does not provide adequate jobs.
That’s why a big investor recently shelved his plans to set up a big manufacturing unit in Bengal. He was assured all support by the state government, but was told he will have to provide employment to a huge number of people.
This investor argued that his unit will be a fully mechanised one and he would be able to employ barely a hundred people. Trinamool leaders did not agree and so he shelved his plans to set up a unit in Bengal.
A port the size of Tajpur providing direct employment to even a few thousand people--forget the 25,000 figure set by the Bengal government--will make it totally uncompetitive and unviable. And the Adani group will naturally not be interested in such a vanity project.
Bengal’s infamous land acquisition issues: Though the Bengal government has promised to hand over 125 acres of seafront and 1000 acres of land about five kilometres away, officials say that a lot of those promised land parcels are not free of encumbrances.
Also, the APSEZ will need much more than 125 acres of land on the seafront for the port. And it will need a lot of land to build a new four or six-lane road to connect the proposed port with National Highway 116B five kilometres away as well as for a railhead.
Mamata Banerjee’s avowed ‘hands-off’ policy towards land acquisition for private projects means that APSEZ will have to negotiate with individual landowners to acquire land. That, as experience has shown, is a very vexing proposition and the Adanis will simply not have the time, patience and inclination for that.
Mamata Banerjee will have to abandon her policy and acquire the land required for her dream project. But that will trigger demands by other investors to get land acquired from private landowners by the state government.
Banerjee came to power on the promise of not acquiring private land for private projects and she can ill-afford an U-turn on that.
Labour issues, trade unionism and work culture: Bengal, as is well-known, is plagued by a terrible work culture and an aggressive and irresponsible trade unionism. This has only worsened under Mamata Banerjee’s reign.
Undue interference in the running of industrial units by politicians is another ill that plagues all projects--private as well as public--in Bengal.
The Kolkata and Haldia ports are in the vice-like grip of rent-seeking politicians who double up as trade union leaders. All operations in the two ports, as well as all other industrial units in the state, are at the mercy of these ‘leaders’ who have to be paid huge sums.
The APSEZ will refuse to operate under such circumstances. The Adani-owned conglomerate will want to operate freely without any interference like it does in Odisha and elsewhere. It will have little inclination to tolerate the rent-seekers of Bengal.
The APSEZ is likely to take a concrete decision on going ahead with the Tajpur project based on its experience in operating a berth in the Haldia Dock Complex (HDC).
The APSEZ was awarded the contract to design, build, finance, operate, maintain and manage the bulk terminal at HDC’s berth no. 2 for 30 years (read this) last week. It will be a fully mechanised operation.
Industry sources say that APSEZ will carefully study its experience at the HDC before taking a final decision on Tajpur. If the APSEZ faces any problems from politicians and trade unionists in its operations in Haldia, it is unlikely to go ahead with the Tajpur project.
The APSEZ will also utilise its involvement in Haldia to study the industrial climate, including the ease of doing business, in Bengal. And that will be a key factor in its decision on Tajpur.
As of now, the Adanis have only been given a letter of intent by the Bengal Maritime Board for the Tajpur port project. A lot more paperwork, and crucial groundwork, needs to be done before the Adanis invest a single Rupee in the project.
Which means that Mamata Banerjee’s dream project is still a long way off. That is, if it happens at all. But a host of circumstances and factors militate against the project, which is why it may remain a mere dream for Mamata Banerjee.
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