President’s Desk – GCCI Bulletin February 2018

Dear Members,
Goa has again received a jolt. The Supreme Court Judgement of February 7, has virtually given a notice of closure to all mining operations in Goa effective March 16, 2018. It is a huge setback to Goa’s economy and will affect the livelihoods of thousands of families of the mining dependents. After the severe impact of stoppage of mining three years back, , Goa’s mining slowly started limping back to normal or almost, in 2017. From 40,000 MT which was being excavated, court directions scaled it to 20,000 MT. annually. While the State Government had come out with various packages to help mining affected people during the earlier closure, some of the stakeholders like barge owners are yet to come out completely from the economic impact of the said closure period.
While Chamber has completely supported the crackdown on illegal mining, we have been equally categorical about the tremendous economic benefits that have accrued to the state and its people due to mining – huge employment generation in mining and allied areas, mushrooming of allied industries and business such as the barge industry, machinery hirers, transport industry, garages, repair works, restaurants and even simple tea-stalls. The Goan leaseholders have painstakingly developed the international markets for low grade Goan ore over 3-4 generations and in the process, pioneered investments in latest machineries, beneficiation plants, trans-shippers, floating cranes and even got investments from Japan to develop Mechanical Ore Handling plant (MOHP) at Mormugao Port.
Even after mining resumed, miners are still struggling to find their feet in the international market due to un-remunerative prices. It is due to this very reason that a large quantity of iron ore inventory still lies un-auctioned. We think that in any case, post the Amendment of 2015 to MMRD Act, all the mining leases were supposed to be operative till 2020, irrespective of renewals or not and hence, this closure ordered effective mid-March of 2018, has suddenly brought in huge uncertainty in the mining sector. We have requested the Hon’ble Chief Minister to work out an urgent, viable, long lasting solution to this problem of sudden stoppage of mining in the state which we fear may have huge social ramifications.
Goa has the potential to emerge as an important logistics hub in western India and can also cater to large parts of southern Maharashtra and northern Karnataka. The logistics industry in Goa has today become an area of priority. Over the years, GCCI’s Logistics Committee has given numerous suggestions and recommendations to the authorities to boost the logistics sector. The Chamber is happy that Government has taken an initiative for development of the logistics sector and welcomes it as it will go a long way in the overall development of the state.
Goa has a unique distinction of having a national highway, a major port, an international airport and railway network all within a radius of 10 kms. The need of the hour for the state is to come out with a policy for the logistics sector which focuses on integrated logistics and transportation system. We have suggested to the government that the logistics sector be granted the status of ‘Industry’ so that finance is easily available from banks and financial institutions for future investments in this sector. The detailed list of suggestions includes earmarking 10% area in industrial zones for warehousing activities, creating logistics parks with connectivity to four/ six lane highways and rail and air network where possible, approved pack houses for perishable cargo etc.
The barge industry, an important part of the logistics system in Goa, was the key to efficient transport of iron ore in the state. The Goa barges accounted for about 85% of India’s inland water cargo. After the mining debacle in 2012, most barges were either sold and are plying in other states or have been reduced to scrap. The mining ban post 15th March this year will be the death knell of this industry which so far had been carrying out an excellent job of the most environmentally friendly and economical mode of transport of cargo in Goa. With mining which will be completely shut post March, a lot of other sectors will practically shut down as well. The barge industry could still be revived by using this efficient mode to carry other cargo especially for exports. In fact, ‘deemed exports’ benefits could be given to the Barge Industry. The Chamber recommends that this cash-strapped industry be given infrastructure status so that this industry receives funds for repair and maintenance. Exemption from GST for goods transported by barges would further encourage this mode of transport.
Now that mining revival prospects seem bleak, the state has to apply its mind to open up other avenues of work for the mining dependents. Given Goa’s sustainable industry concerns and limited land resources the options are still lesser. And especially now, when unemployment looms large, all of us Goans should realise that inclusive growth means that all segments of the populace must come together for the economic prosperity of all. Instead of blindly opposing projects, people should ascertain facts and the benefits and not fall prey to rable rousers. The focus should be on generating business and employment in a sustainable manner rather than rejecting projects outright.

Interestingly, the World Bank is financing the development of the Ganga Waterway with a loan of USD 375 million Once operational, it will link up with the Eastern Dedicated Rail Freight Corridor and the existing network of highways and help the regions’ industries to seamlessly integrate different modes of transport. Six new cargo terminals at Varanasi, Ghaziapur, Kalughat, Sahibgunj, Triveni and Haldia are expected to generate thousands of jobs in one of the poorest parts of the country. The India freight statistics in the world bank report are worth noting : 65% by road, 27% by rail and 0.5% by waterways and that one litre of fuel can move – 24 tonnes by road, 85 tonnes by rail and 105 tonnes by water. The Inland Waterways Authority of India is following the principle of ‘working with nature’ while planning the Ganga waterway. They will be using limited dredging using modern, less intrusive technologies . IWAI is also ensuring that information on aquatic wildlife sanctuaries that lie along the stretch of this river, protected aquatic habitats and wetlands will be fed into the River Information System – RIS to ensure that vehicles plying in these areas comply with the operational framework . The speed of barges will be limited, the vessels will be fitted with noise control and animal exclusion devices. And vessels will have to comply with zero discharge. The project also envisages a repair and maintenance facililty.
Like the Ganga project,Goa should similarly promote its waterways which are already quite developed but underutilised. They need a good infusion of funds to put in place a robust infrastructure – proper jetties, ware houses, cold chains. Also, taking a leaf from the Ganga project, we could try to access the RIS, map out the eco-sensitive zones in Goan waters and promote marine tourism . This could also include marinas. With stringent norms in place and a well planned infrastructure, marinas could also boost employment opportunities for locals without damaging the marine ecology. I believe that as part of the Sagarmala project, nine dilapidated jetties will be taken up for modernisation and expansion at Ribandar, Old Goa, Banastarim, Borim, Shiroda, Durbhat, Cortalim, Piligao and Aldona in the Zuari and Mandovi rivers. These could be used as cruise terminals and also encourage backwater cruises.

Goa is also ideally suited for development of a shipbuilding industrial cluster like in Europe. These facilities could be used for repair and maintenance and constant upgradation of the naval fleet. A skill development institute in Goa for training local manpower in different skills required for logistics industry is important now.

When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us. -Alexander Graham Bell

Let us work in earnest to open new doors. Not only will the logistics sector be strengthened, the barge industry would be revived and huge employment generated in the logistics as well as the tourism sector.

Sandip Bhandare

Download GCCI Bulletin February 2018