Saturday, 17 October 2009

Consternation as MoEF announces moratorium on new port development.

New Delhi, Oct 5 The Indian Ministry of Environment and Forests (MoEF) August 21 order putting new port developments in the country on hold till a policy is in place
has sent shockwaves across the industry. Many investors are reportedly deeply concerned about the state of their projects. There is additional confusion since State Governments as well as the Ministry of Shipping (MoS) have been pushing for capacity addition almost simultaneously; in fact, the Shipping Ministry has been aggressively pursuing port development as part of its promised ‘hundred day agenda’ declared soon after this government came to power.


The MoEF has categorically decided that no new proposals would be entertained till they finalise their policy. The policy is to address projects on the coastline and other activities connected with commercial ports, including any expansion plans. Media reports suggest that the MoEF has decided to impose a three month suspension during which it will not decide on proposals already received, either for new ports or for expansion of existing ones. “The environment ministry has placed a moratorium on clearances to new and old port development projects on the recommendation of a committee headed by MS Swaminathan. We will take up the issue with the Cabinet and other authorities,” shipping secretary APVN Sarma told an Assocham meeting. Rumours suggest that Sarma would be taking up the matter with the MoEF soon.


Sources say that the Ministry’s decision is influenced by the earlier recommendations of the Swaminathan report that addressed the issue of public objections to the Coastal Management Zone Notification. That document had asked for a moratorium on new port capacity till the ‘cumulative impacts of the individual projects on the coast line’ were studied completely. Environment ministry officials say that the coastline is being damaged by a slew of approvals for port expansion and development.


Industry critics allege that the MoEF decision is unilateral and against Shipping Minister GK Vasan’s plans to expand almost 20 ports across the country. Included in these are investments lined up totaling to more than Rs 3300 crore. They add that the MoEF is being intransigent in issuing an order without even consulting their counterparts in the MoS. Others point out that the Coastal Regulation Zone notification of 1991 has given port development a special status, and that, as one industry watcher says, "While amendments can always be added to further improve the New Delhi, Oct 5 The Indian Ministry of Environment and Forests (MoEF) August 21 order putting new port developments in the country on hold till a policy is in place
has sent shockwaves across the industry. Many investors are reportedly deeply concerned about the state of their projects. There is additional confusion since State Governments as well as the Ministry of Shipping (MoS) have been pushing for capacity addition almost simultaneously; in fact, the Shipping Ministry has been aggressively pursuing port development as part of its promised ‘hundred day agenda’ declared soon after this government came to power.


The MoEF has categorically decided that no new proposals would be entertained till they finalise their policy. The policy is to address projects on the coastline and other activities connected with commercial ports, including any expansion plans. Media reports suggest that the MoEF has decided to impose a three month suspension during which it will not decide on proposals already received, either for new ports or for expansion of existing ones. “The environment ministry has placed a moratorium on clearances to new and old port development projects on the recommendation of a committee headed by MS Swaminathan. We will take up the issue with the Cabinet and other authorities,” shipping secretary APVN Sarma told an Assocham meeting. Rumours suggest that Sarma would be taking up the matter with the MoEF soon.


Sources say that the Ministry’s decision is influenced by the earlier recommendations of the Swaminathan report that addressed the issue of public objections to the Coastal Management Zone Notification. That document had asked for a moratorium on new port capacity till the ‘cumulative impacts of the individual projects on the coast line’ were studied completely. Environment ministry officials say that the coastline is being damaged by a slew of approvals for port expansion and development.


Industry critics allege that the MoEF decision is unilateral and against Shipping Minister GK Vasan’s plans to expand almost 20 ports across the country. Included in these are investments lined up totaling to more than Rs 3300 crore. They add that the MoEF is being intransigent in issuing an order without even consulting their counterparts in the MoS. Others point out that the Coastal Regulation Zone notification of 1991 has given port development a special status, and that, as one industry watcher says, "While amendments can always be added to further improve the stipulations, a blanket moratorium is not the answer to the malady."
Another senior port industry official commented, "While it is hoped that MOEF has done their homework before arriving at this decision, banning new projects will not only have a very harsh impact on the growth of coastal projects but also will surely have cascading effect on other sectors of economy, thereby affecting the all round development of the country as a whole."


Meanwhile, the environment ministry has conducted a satellite image survey of the country and is studying the report. “We won’t give clearance to a proposal falling in the ‘hot’ spots,” confirmed a MoEF official to a business newspaper.

stipulations, a blanket moratorium is not the answer to the malady."
Another senior port industry official commented, "While it is hoped that MOEF has done their homework before arriving at this decision, banning new projects will not only have a very harsh impact on the growth of coastal projects but also will surely have cascading effect on other sectors of economy, thereby affecting the all round development of the country as a whole."


Meanwhile, the environment ministry has conducted a satellite image survey of the country and is studying the report. “We won’t give clearance to a proposal falling in the ‘hot’ spots,” confirmed a MoEF official to a business newspaper.
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