Indian ministry to award 25 projects by March-end
The shipping ministry will award 25 projects worth US$2 billion by the end of the current fiscal, a move that is expected to increase cargo-handling capacity at ports by 250 million tones, reported The Economic Times.
The decision follows Prime Minister Manmohan Singh’s instruction to the ministry a month ago that capacity expansion should be fast-tracked.
Ports in the country have been plagued by capacity shortage largely due to security clearance issues, which discourage private sector participation.
"The ministry has set a target of awarding 42 projects in 2013. We have already awarded 17 and will now complete 25 projects by March, increasing the total capacity across ports by 250 million tonnes," said Pradeep Sinha, secretary in the shipping ministry.
Construction of a mega container terminal in Chennai and a second dock at the Haldia port are among the projects that will be awarded. The ministry has also decided not to pursue the Port Regulatory Authority Bill largely due to opposition from various state governments and minor ports.
The Bill aimed to regulate all ports in the country, including the mushrooming private ports that are currently free to fix tariffs. The ministry, which has not awarded any major projects in the last two years, has also written to the ministry of finance to revive a subsidy given to the shipbuilding industry.
"We have made a recommendation to the ministry of finance to revive the subsidy given to the shipbuilding sector. We have asked the ministry to give 15 percent subsidy and, in addition, we are also seeking infrastructure status for the sector," Sinha said.
The ministry has also given in-principle approval to the deregulation of the tariff mechanism. Currently, port tariffs are fixed by the Tariff Authority for Major Ports (TAMP), a government-controlled body that often finds itself at loggerheads with port operators over rates.
"For future projects, the ministry has decided that the tariff be market regulated and not decided by TAMP," Sinha said. "As far as existing projects where TAMP is involved, the ministry will look at it on an individual basis."
In February last year, TAMP had reduced the tariff at two terminals at the Jawaharlal Nehru Port Trust, quashing a demand for an increase in rates.
"The ministry has also taken measures to reduce the time taken for the projects and has streamlined security clearance procedures and is constantly monitoring various projects," Union Shipping Minister GK Vasan said.
In a follow up, the ministry has forwarded to the home affairs department a request by Adani Ports and Special Economic Zone to revalidate the security clearance it has received earlier for a port project in Chennai.
In a separate development, JNPT has agreed to give a no-objection certificate to the Mumbai Trans-harbour Link. Earlier, it had opposed its construction saying it would come in the way of the proposed fifth container terminal at the port.