The state maritime board had earlier carried out a study on the possibility of a joint venture. Following this, discussions were held among the New Mangalore Port Trust, the state government and the Union ministry. Karwar port is being developed for handling of petroleum, oil and lubricants (POL) and iron ore.

Under the guidelines for joint venture in the sector, three types of partnerships are possible-between major and minor ports, major and foreign ports, and major ports and private or foreign companies. However, in these partnerships, the major ports are required to have a minimum of 26 per cent stake.

The Union government is encouraging partnerships in the port sector in order to ease congestion at major ports and also to develop more capacity. At present, major ports have a capacity of 217 mt butlast year they handled 252 mt.

The ministry of surface transport has already introduced a Bill in Parliament enabling major ports to invest their surplus funds in minor ports by forming joint ventures.

The other two proposals for joint ventures which have come up recently are for developing ports at Vadinar and Gangavaram.

While the Gujarat government has been demanding that Vadinar oil terminal should be reverted back to its control, it is at the same time keen on a joint venture between Kandla Port Trusts and Gujarat Maritime Board to develop it into an all cargo port.

The ministry of surface transport has viewed the joint venture proposal favourably since there has been no serious proposals from the private sector for developing the port.

The Kandla Port Trust has a surplus of Rs 700 to 800 crore which can be invested into Vadinar port after the Bill is passed by Parliament.

Vadinar is a minor port in the Gulf of Kutch which was taken over by the Central government for developing an oilterminal. In case of Gangavaram, the ministry of surface transport asked the Andhra Pradesh government to develop a port there as a joint venture with Visakhapatnam Port Trust.

Gangavaram port is planned to be developed as a satellite port since Visakhapatnam port, which handles petroleum and oil products, iron ore, thermal and coking coal, liquefied petroleum gas and minerals, has reached a saturation.

Besides, a minor port at Gangavaram will help check competition from ports at Paradip and Chennai. All the proposals for joint ventures were discussed at the recent meeting of Maritime State Development Council.