JNPT to raise Rs 1,700 cr through bonds

Jawaharlal Nehru Port Trust (JNPT) at Navi Mumbai is planning to enter the capital market through a bond issue to raise Rs 1,700 crore by the year-end. The public sector body has already given its recommendations to the government.

“We have sent a proposal to raise Rs 1,700 crore through a bond issue in the next three-four months, to part-finance our modernisation plan,” said Luxman Radhakrishnan, chairman, on the sidelines of INMEX India 2011, the seventh international maritime exhibition and conference, organised by Informa Exhibitions, here on Thursday.

JNPT has envisaged a total investment of Rs 5,000 crore for deepening of its berth, with other modernisation plans to handle bulk cargoes. At present, all inbound and outbound bulk carriers are first diverted to Singapore because of poor infrastructure at Indian ports. Bulk cargoes at Singapore ports are converted into container cargoes for handling at Indian ports. The depth level at all ports in India do not meet international standards to handle bulk cargo and it results in additional cost time for imports and exports. “This problem, however, is expected to be resolved once JNPT’s plan is complete according to the proposed Maritime Agenda, a vision statement laid out by the ministry of shipping for 2010-20,” said Radhakrishnan.

The first phase of dredging is expected to be completed in three-four years to nearly 14 metres at Rs 1,700 crore, later to be extended to 17 metres. JNPT has floated a tender. The final decision is expected in a couple of months for the preferred bidder. The work is expected to start in the next two months.

Operating with 110 per cent of capacity, JNPT contributed 56.5 per cent of India’s overall water transportation, which, Radhakrishnan said was “outperformance” against the comfortable industry average between 60-65 per cent.

Terming shipping a sunrise sector, Radhakrishnan urged private participation in it. It has remained lacklustre due to long gestation periods. The government has assured full support to exploit India’s maritime potential.

“Road transport use around three times of fuel used for water transport. Hence, the maximum use of water transport, which currently lacks between two small destinations, will result into a massive support to the overall economy indirectly,” said K Mohandas, secretary, ministry of shipping.

With a coastal area of 10,500 km, India’s potential is not fully exploited due to lack of infrastructure. Still, water transport constitutes over 90 per cent of India’s total transported volume and around 77 per cent by value.