Shipping min may seek funding support for two major ports

Written by Press Trust of India | New Delhi | Updated: Mar 20 2014, 09:52am hrs
The shipping ministry may seek funding support for two major ports to attract more developers and is likely to approach the Cabinet on the issue.

The government has finalised Sagar (West Bengal) and Dugarajapatnam (Andhra) as two sites for setting up of the ports.

At the Sagar port there is also a proposal to build a rail bridge which means that the rate of return for that port will about 8%. So without VGF (viability gap funding), participation of bidders is an issue, a shipping ministry official told PTI.

Also, at the Dugarajapatnam Port the rate of return is 18% without the cost of land and therefore we are exploring the option of VGF, the official said, adding that we will go to the Cabinet soon with the proposal.

VGF is a form of government support which is extended to those projects that are economically justified but fall short of financial viability due to their longer gestation periods or other factors.

Last month, shipping minister G K Vasan had said that the initial bids for the Sagar Port will be invited in a couple of months, whereas land for the Dugarajapatnam Port has been identified.

The government in 2013-14 fiscal had awarded as many as 30% development projects under the PPP (public private partnership) mode, entailing total investment of R2,07,089 crore.

The total capacity of these projects is 217.57 million tonne per annum.

In the last four years, government had approved 88 new projects, entailing investment of R42,953 crore and a capacity addition of 558 million tonne per annum.