‘SEZ for ODC Cargo’

Capt Sekhar,
Director, AlphaMERS
The author narrates of an SEZ that not only caters to a specific industry, but a segment of manufacturers cutting across industries that make large products, or more commonly called ODC (over dimensional cargo) by the transportation sector.

SEZ are not known to have been a roaring success in India, for various reasons. This is despite the SEZ being an excellent in-principle concept, promising an operating and taxation environment matching the best around the world. Without going into details of why it is no so popular, this article is a description of an SEZ, that caters not to a specific industry, but a segment of manufacturers cutting across industries that make large products, or more commonly called ODC (over dimensional cargo) by the transportation sector. When you see a turbine blade on a truck trailer meandering through ghat section roads, you will agree to the argument of what this ODC manufacturer can achieve by locating himself on the waterfront.

The layout of such an SEZ is like a regular industrial park, but with one major difference. Each of the industrial plots has a canal on one side that connects it to the sea. The common use infrastructure is typically articulated self-propelled barges that ply on these 15 m wide and 1.5 m deep canals, taking the large products from the factory to the export vessel at berth outside the sea mouth. The break bulk vessels take these products further on to their export destinations.

The sea mouth can be an artificial sea mouth, if the environmental impact is analysed or handled carefully. Alternately the SEZ can be connected to the sea through an estuary. The maintenance dredging cost will be minimal, only for the estuary, which is shared with the riverine ports. If this SEZ is located on river banks, it saves some canal development charges, but imposes maintenance dredging costs.

Such an SEZ will utilise land close to the sea and not occupy waterfront land, thereby not imposing an opportunity cost of a port development. If located on the riverbank, the customs perimeter boundary monitoring will have to account for river traffic sharing space with SEZ product movement.

Who will populate such an SEZ?
Any manufacturer around the world who makes over dimensional cargo will find it sensible to relocate here. With rising manpower costs in Europe, many brands will relocate their manufacturing to India (of course, if they are not already in China!). The products are typically wind turbine towers and blades, large generators, boilers, marine engines, pleasure yachts and certain project cargoes.

Given the increasing loads on the road and rail, the waterways will be the preferred highways of the future. Inland waterways will thrive on point to point cargo movement with minimal inter modal transfers. Factories will find it sensible to locate at the waterfront. While navigable waterfront space itself is always limited, such an Industrial park will act as a waterfront space multiplier.

It appears a matter of time before the ODC cargo manufacturers seek to locate near the waterfront and such units will find it easier to share space within an industrial park, instead of having individual waterfront developments themselves or occupying premium space within ports.