India's maritime plans take shape

India is set to go places with its overseas maritime plans. The Centre plans to float a company – Indian Ports Global – along the lines of Dubai Port World and Port of Singapore (PSA), to invest in overseas ports. The company will be allowed to raise Rs 3,000 crore tax-free bonds.

Besides, the government has allowed Ennore Port Limited and Jawaharlal Nehru Port Trust to raise Rs 1,000 crore tax free bonds, each, by March 2012.

The finance ministry has earmarked Rs 5,000 crore worth tax-free bonds to develop major ports in this financial year. “The money raised by the port will be used to finance dredging operations and infrastructure requirements,” said K Mohandas, secretary, Shipping Ministry. He was speaking on the sidelines of an event to launch the India Maritime Week in January 2012.

The port sector is likely to see a lot of action with the government expected to award eight projects worth Rs 10,000 crore by September, including the fourth container terminal at JNPT and the Chennai Mega Container Terminal. The target for FY12 is 23 projects worth Rs 17,000 crore.

The shipping ministry is likely to move the Cabinet for an approval to set up Indian Ports Global in August.

The ministry is also planning to increase the capacity of ports to three billion tonnes with an investment of Rs 3,00,000 crore by 2020, according to its Maritime Agenda 2020. The government is in the process of finalising two more new major ports, including one in Andhra Pradesh. The ministry has written to all maritime states to send through proposals for setting up new facilities.

To promote investment in the infrastructure sector, Finance Minister Pranab Mukherjee had announced allowing certain sectors to issue tax-free bonds.

Beside ports, other government undertakings which have been allowed to issue such bonds include the Indian Railway Finance Corporation, Housing and Urban Development Corporation (HUDCO) and Highway Authority of India. The Budget had allowed tax-free bonds worth Rs 30,000 crore.