Neither the commercial viability, nor the putative military strategic benefits, were adequately scrutinised.
The commercial case for the project rests on the time and cost saved due to a shorter route. The time saving will be most significant for India’s domestic littoral trade. If ports on either coast improve their efficiency, bulk cargo and container ships may be able to provide an attractive alternative for domestic freight that currently depends on India’s inefficient railways and abominable highways. As for international trade, Indian ports have a long way to go before the canal route can be compelling enough for global shipping for global shipping companies to consider.
Jacob John points out in a recent issue of the Economic and Political Weekly, project benefits are being overstated. “The promises of the project may be valid for some ships,” he concludes, ”but there has been a serious deficiency in studying its impact for other ships. This deficiency is likely to make the project economically unviable and more expensive for some ships to use. It is a project that is also likely to cost considerably more than what was originally proposed due to a lack of study on the amount of dredging needed. Given the likely escalation of costs and its extremely limited benefit, there is a need for mechanisms that ensure accountability of the project to its original claims”.
The trend in the shipping industry is towards larger ships. The canal, however, will allow only the smaller ships (those less than 20,000 DWT) to pass through. Even these have to slow down to be piloted across the canal.
It is inexcusable for the government to sink public funds into a project of questionable viability without a study of alternative means to achieve the same objectives. For instance, investing in improving highways and domestic gas pipelines can arguably achieve the same economic goals, with much larger external benefits.
It is possible to bring economic development to coastal Tamil Nadu without having to create another public sector behemoth. It is possible to improve domestic trade by building better highways and making the railways more efficient. And it is possible to strengthen maritime security by buying more hovercraft and ships for the coast guard and the navy. But if the government goes ahead with the project, it will not be possible to repair the damage it will cause to the environment. That alone should compel the government to explore alternatives than to stubbornly insist on sinking money down the Palk Strait.