Major ports to form company for last-mile connectivity

To put port connectivity works on a fast track, 12 Indian ports will pool the resources to set up a new company. The Union government is set to clear a proposal for creation of a Port Infrastructure Vikas Nigam Ltd.

The company will construct, operate and maintain rail and road infrastructure to facilitate connectivity for transportation of goods from ports in India or abroad. The Union shipping ministry is in the process of seeking Cabinet approval for this.

According to documents reviewed by Business Standard, the company's paid-up capital will be Rs 50 crore, with equity participation from the 12 major port trusts. The authorised share capital will be around Rs 100 crore, divided into a million equity shares of Rs 1,000 each.

NAVIGATING NEW SHORES

• Port Infrastructure Vikas Nigam Private Limited to be created with equity participation from major ports
• The company will develop, design, finance, construct, operate and maintain rail and road infrastructure to provide connectivity for transportation of goods from ports in India
• Minimum paid-up capital of Rs 50 crore
• Authorised share capital of the company is Rs 100 crore divided into 1 million equity shares of valuation Rs 1,000 each
• All major ports hold varying percentages of equity in the company

Source: Government documents

Rail Vikas Nigam Ltd, under the administrative control of Indian Railways, will undertake project development and carry out other engineering works.

Last-mile connectivity implies linking the ports to the rail network, to move cargo. India has 12 major ports and about 60 active non-major ones. The major ports are under central jurisdiction and state authorities monitor and regulate the operations of the others.

"This will go a long way in improving the linkage of ports with the rail network," said a senior ministry official, requesting anonymity.

The movement of cargo by railway improves efficiency and reduces costs when compared to movement through road transport.

Shipping analysts say seeking intra-government clearances can still prove a major issue.

The board of directors will comprise a minimum of 10 and a maximum of 12 individuals. The secretary (shipping) will be chairman and the government will nominate two additional advisors to the board, who will not hold voting rights. Additionally, the chairmen of six major ports will hold board positions on a rotational basis, for a maximum of two years.