Come out with land use plan, shipping ministry tells ports

The ministry recently decided to lease out port land to private parties

The Ministry of Shipping has asked all 12 major ports in the country, with a land bank of 2.65 lakh acres, to come out with a “land use plan”.

The ministry has recently decided to lease these lands to private firms for commercial development, including building hotels, housing projects and others.

Union Minister for Shipping G K Vasan said all the major ports were asked to come out with a “land use plan” in the next few weeks. Although port management’s need not have to come to the ministry to get approval of the plan, they should require the nod of respective boards.

A senior shipping ministry official, on Tuesday, said at least for every five years the plan needed to be updated.

The government last week approved policy guidelines for land belonging to the 12 major ports. Under the new policy guidelines, land can be allotted only through licensing in custom bond areas by inviting competitive bidding, while land outside custom bond areas can be leased through auction.

There is also a provision to lease land outside custom bond areas, but it should be given only for port-related activities. The boards of respective ports can approve leasing of land for a period up to 30 years. For leasing of land beyond 30 years and up to 99 years, approval of the government has to be obtained through the mechanism of an empowered committee.

Chennai Port Trust Chairman Atulya Misra said the new land policy had cleared a major bottleneck that was preventing the companies to invest in the land. The port currently has Rs 66 crore of its Rs 650 turnover from leasing of land.

“We have lost around Rs 226 crore in terms of iron and coal business and 50% of the available land with us are vacant now. With the new policy, we expect around Rs 200-250 crore to come from leasing and throughput,” said Misra.

The port has about 800 acres of which 300-400 acres of land is waterfront. Of the land area, leaving the infrastructure facilities like roads and railways, substantial part of the land is vacant.

The Port Trust expects interest to come from industries, which are looking for covered areas such as warehouses, and car parking spaces (in the case of car exporters).

M A Bhaskarachar, chairman-cum-managing director of Ennore Port Ltd, said while his port currently don't have vacant land ready for leasing, it is in the process of acquiring around 730 acres of land from Salt Department and plans to spend Rs 500 crore to procure this land.