After Prime Minister Manmohan Singh’s set high targets for the port sector earlier this year, the Union shipping ministry has fast-tracked the award of public private partnership projects. Till October 2012, the ministry awarded nine projects, of which four were PPP projects.
Last year it could only award three of the targeted 23 projects. However, one of these was the ambitious Rs 8,000 crore fourth container terminal at the Jawaharlal Nehru port which will soon be up for re-bid. The project alone made up for more than half of last year’s achievements.
Cabinet Committee on Infrastructure, in late September 2012 approved the proposal of delegation of enhanced financial powers to the ministry of shipping for awarding port projects of less than Rs 500 crore in cost. “The cabinet decision has removed a major roadblock and has proven helpful in speeding up the process for awarding projects. We are closely monitoring the progress in this matter,” said P K Sinha shipping secretary said.
Earlier for instance, all projects up to Rs 250 crore had to be approved at three stages; first by the standing finance committee, second by the committee of economic affairs and shipping secretary and then by the shipping minister and the finance minister. For projects above Rs 300 crore, a cabinet note had to be prepared. For all projects that fell in between a PPP appraisal committee had to look into the project.
For 2012-13, shipping ministry aims to award 42 projects, of which 29 are through PPP route. The target given by the PM to shipping ministry for 2012-13 involves total investment of Rs 35,000 crore and a capacity addition of 244 million tonne.
Interestingly, shipping ministry is making all its efforts count this year. Hence, the non PPP projects like mobile harbor cranes project at Mormugao port with a 0.25 million tonne per annum (MTPA) capacity is also one of the nine projects awarded thus far. “Since elections are close by some window dressing could be done to showcase the achievements of the government. Many of these projects were pending from last year and a lot of ground work had already been done for it,” a senior port trust executive who did not wish to be quoted said.
The four PPP projects awarded till October 2012 include the 330 meters container handling berth at Jawaharlal Nehru Port, Cochin development of ship repair facility, berth number 14 at Kandla port trust and container terminal at Tuticorin. The latter has been awarded to ABG container handling and is already under litigation by M/S IPT who have contested the award of the project to ABG. Of the four port projects that government is planning to award this year, is the Rs 3,600 crore Chennai mega container terminal.
Many industry executives are taking this progress with a pinch of salt. “Even if the projects are awarded there are so many hurdles to cross like long procedures and multiplicity of clearances which make the project risky for the private players,” said Hemant Bhattbhatt, senior director, Deloitte India.
