The Union shipping ministry has jacked up plans to award port expansion projects on public private partnership (PPP) for the current financial year, DNA reports. The ministry will now award 24 port sector projects worth Rs17,000 crore, against 12, requiring Rs4,000 crore investment planned for the fiscal earlier.
“We are planning to award 24 port expansion and capacity creation projects in the current financial year. These will require an investment to the tune of Rs16,963.72 crore, leading to capacity creation of 232.43 million tonnes,” said Rakesh Srivastava, joint secretary (ports), ministry of shipping, at a Ficci conference on PPP in infrastructure. He said that of the 24 projects, 12 are new projects, while the rest are carry forward projects from the last two years.
One of the major projects that will be taken up in the next fiscal is Haldia Dock 2 in Kolkata, which alone will require and investment to the tune of Rs2,000 crore.
The port ministry — which is currently implementing 20 projects worth Rs10,000 crore and has another 24 projects (worth Rs14,363 crore) under various stages of bidding — has made representations for policy reprieve to attract private investment in the sector. The ministry has approached the committee on transport headed by former deputy governor of Reserve Bank of India Rakesh Mohan for respite on the interest rate and credit rating front.
“We have apprised the Rakesh Mohan committee about the fact that the rate at which a port expansion project is sanctioned is fixed for two years, with a reset clause from the third year. This leads to uncertainty owing to implications of fluctuating interest rates on implementation of the projects. Since these projects require long-term funding, we have requested the committee to look into the matter,” added Srivastava.
Apart from a consistent interest rate regime, the ministry has also pitched for credit appraisal. A port expansion project takes at least two to three years for completion and three years for operationalisation. During this time, they are not eligible for credit rating.
“We are planning to award 24 port expansion and capacity creation projects in the current financial year. These will require an investment to the tune of Rs16,963.72 crore, leading to capacity creation of 232.43 million tonnes,” said Rakesh Srivastava, joint secretary (ports), ministry of shipping, at a Ficci conference on PPP in infrastructure. He said that of the 24 projects, 12 are new projects, while the rest are carry forward projects from the last two years.
One of the major projects that will be taken up in the next fiscal is Haldia Dock 2 in Kolkata, which alone will require and investment to the tune of Rs2,000 crore.
The port ministry — which is currently implementing 20 projects worth Rs10,000 crore and has another 24 projects (worth Rs14,363 crore) under various stages of bidding — has made representations for policy reprieve to attract private investment in the sector. The ministry has approached the committee on transport headed by former deputy governor of Reserve Bank of India Rakesh Mohan for respite on the interest rate and credit rating front.
“We have apprised the Rakesh Mohan committee about the fact that the rate at which a port expansion project is sanctioned is fixed for two years, with a reset clause from the third year. This leads to uncertainty owing to implications of fluctuating interest rates on implementation of the projects. Since these projects require long-term funding, we have requested the committee to look into the matter,” added Srivastava.
Apart from a consistent interest rate regime, the ministry has also pitched for credit appraisal. A port expansion project takes at least two to three years for completion and three years for operationalisation. During this time, they are not eligible for credit rating.