Major Ports To Draw Rs 4,000 Cr Investment

Following the enactment of the Major Port Trusts Act 2000, the country's major ports will attract private and public sector investment, both foreign and domestic, to the tune of Rs 3,000-4,000 crore within two years for modernisation and technical upgradation, surface transport minister Rajnath Singh told Business Standard.

Parliament has amended the Major Port Trusts Act 1963 to enable the major ports to enter into joint ventures with minor ports, foreign ports and foreign or domestic companies.

Singh said the primary objective of the major ports would be to ink joint ventures with Indian companies, mainly with public sector oil companies like Indian Oil Corporation and Oil and Natural Gas Corporation.

 

"I had a talk with petroleum minister Ram Naik regarding tie-up with oil PSUs," Singh said.

Tie-ups with Indian companies would be the first priority, foreign companies can also come, Singh said.

According to him, the detailed modalities of the JVs including the equity cap for the private company would be decided in due course, keeping in mind that port assets would not be sold. "We are not for privatisation but for increasing private participation," Singh said.

However, the government has decided that in any joint venture, a major port will have a minimum of 26 per cent of the equity to block any special resolution.

Joint ventures with minor ports would help to enhance capacities of them along with expansion of major ports, Singh said.

On the port development programmes, he said the Jawaharlal Nehru Port Trust (JNPT) and Chennai port would be developed as hub of mother ports to accommodate larger vessels and avoid cargo trans-shipment from Colombo and Hong Kong. P&O of Australia is working at JNPT to increase the draft to more than 15.5 metres to accommodate larger ships.

P&O has also handled a Rs 800 crore container terminal upgradation project at JNPT.

According to Singh, private investors would be willing to invest in the major ports as there would be no risk of loss of capital.

For the same reason, it would be easier to access loans from banks and the financial institutions, he added. For joint ventures with domestic or foreign companies, tender route will be followed.

A tie-up between a major port and foreign port will be through government to government agreement and equity participation will be decided by mutual discussion.

However, in case of a foreign port is functioning under a company, the tender route will be followed. Singh also said that a joint venture with a foreign port would be the last priority.

By entering into joint ventures with major ports, minor ports can also be developed with enhanced traffic handling capacity.

The traffic handled by major ports can be diverted to the minor ports as the former have hit the saturation level.