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Kolkata Port might bring 2,500 acres under new policy

KPT is in the process of drafting a proposal for renewal of leases, to soon be sent to the shipping ministry

Ruchika Chitravanshi  |  New Delhi 

Kolkata Port

On the heels of the Union Cabinet giving its nod to convert 1,300 acres from leasehold to freehold at Gandhidham near the Kandla Port in Gujarat, the Centre has asked the Kolkata Port Trust (KPT), too, to devise a strategy for the 2,500 acres in the port’s township area, which are under lease.

KPT is in the process of drafting a proposal for renewal of leases, to soon be sent to the shipping ministry. “We want to have more freedom in dealing with these leases and more revenue,” said R P Kahlon, chairman of KPT. Unlike Kandla, it so far has not planned to convert any of its leases into a freehold structure, whereby the tenant would get ownership of the land. However, the final proposal is still being drafted.

“We want to extend the leases for another 99 years. But we are waiting for some direction from the shipping ministry, based on the new land policy guidelines. It will have some bearing on the township areas, though not directly,” Kahlon added.

Besides Kandla and Kolkata, the only other port which has land in township areas is the Mumbai Port Trust. The ministry has sought the law ministry’s opinion on the Supreme Court order of 2006 regarding lease renewal of commercial and residential properties owned by Mumbai Port Trust.

The apex court, while opposing Mumbai Port’s decision to revise the rentals based on current market prices, had suggested a formula to gradually increase rents, since most of these leases were as old as 99 years. “Since there is an order from the SC in Mumbai Port Trust matter, we cannot take any independent decision for renewal of leases. This issue will be dealt with separate from the rest of the ports,” said a senior official with the shipping ministry.

According to the ministry, the deadline for sticking to the SC’s formula ended in 2012 and thereafter market rate-based rent could be charged. However, the competing parties have argued that the SC guideline is applicable till 2024.

The shipping ministry is awaiting the law ministry’s inputs to decide its next course of action by next month. Major ports in India own 265,000 acres of land, out of which 220,000 acres belong to the Kandla Port alone.

The government had on last Thursday approved policy guidelines for 265,000 acres of land belonging to the 12 major ports, paving the way for monetising the plots. The licensing and leasing of these lands would be based on the new guidelines. The tariff authority of major ports would do the valuation of the land after consulting the stakeholders. The rates would be revised in line with market rates. “Discretionary powers have been reduced and tender-cum-auction has been prescribed as the most preferred method of allotment under the new guidelines,” said Vishwapati Trivedi, shipping secretary.

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 tender-cum-auction. There is also a provision to license land outside custom bond areas, but it should be only for port related activities.

First Published: Fri, January 17 2014. 00:47 IST
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