50,000 acres with ports may be diverted to realty

Cabinet to draft policy on surplus land soon

Some 50,000 acres of land, worth several thousand crores, locked up with ports in major cities could soon be available for commercial development in what could give an impetus to the real estate sector.

The Cabinet will shortly consider a draft policy on commercial development of surplus land owned by major port trusts in India by leasing of these plots to developers. The note on ?Policy directives for land management by major ports, 2012?, prepared by the shipping ministry, explains how ?land alienation? by major port trusts could be done in a transparent manner.

An important feature of the policy is that when it comes to leasing of land lying with the 12 major ports, the final decision will be taken by the Cabinet. Discretionary powers of individual port authorities, including the respective port trust?s chairman, will go. This could weed out corrupt practices apart from boosting land supply for housing and commercial spaces in cities like Mumbai, Kolkata and Kochi.

Excluding Port Blair, for which records are not available, the 12 major port trusts in India own a total land area of 258,000 acres. Out of this, 15-20% is not in use and could be termed surplus.

As far as leasing of the surplus land is concerned, an empowered committee comprising the shipping secretary will make recommendations and the Cabinet will take the final call. The proposed policy for development of port land prescribes a transparent tender-cum-auction method for leasing. It also clearly prescribes procedures to bring pricing of port land in tune with market rates to realise the optimum value.

Further, there would also be a special dispensation for the development of educational institutions, which could get land at cheaper rates.

The proposed policy directives will be implemented by all major ports including Ennore Port, which is a company under the Companies Act. The policy directives will be made effective within seven days of getting Cabinet approval.

As per conservative estimates, an acre of Mumbai Port Trust land could command around Rs 500 crore, while in the Kolkata Port Trust area the same area could fetch around Rs 50 crore. Kolkata Port has got around 4,576 acres of land. Similarly, the Cochin Port Trust, which has around 2,352 acres, could lease out the surplus land at an estimated price of Rs 35 crore per acre at current rates.

Around 95% of India?s foreign trade by volume and 70% by value is transported by sea. Major ports account for 75% of the total cargo by volume handled at Indian ports. This underlines the importance of the development of major ports for their contribution to the Indian economy.