FinMin rejects JNPT's Rs 1,500-cr bond sale plan

The country's biggest container port Jawaharlal Nehru Port Trust's (JNPT) request to raise Rs 1,500 crore through a bond sale has been rejected by the Finance Ministry, a top port official said today.

JNPT Chairman L Radhakrishnan said it would now have to borrow the money required for the dredging project from the market at higher costs.

"The government says that you have enough money," he told reporters on the sidelines of the CII Logistics Summit here, adding that the cash reserves with JNPT would be used to fund land acquisition for the fourth terminal as commercial lenders do not support land acquisition while for dredging project, funds would be raised from the market.

The port trust had planned to take advantage of a provision under which companies can raise up to Rs 5,000 crore in tax free bonds for infrastructure purposes.

When asked for the reasons which led to the Ministry's decision, he said, "First they said you are not a company, we can't give it. I argued that NHAI [National Highways Authority of India] is also not a company but they have been given. Now they say that use your own money."

The dredging project goes as per schedule and port will have to pay higher interests of over 13 percent to borrow from commercial lenders as against the lower coupons of bonds, Radhakrishnan said.