Cap on investment in infra by ports to be hiked 10 times

Aiming at the speedy implementation of the UPA government?s flagship programme for ports and shipping sector?National Maritime Development Programme (NMDP) worth around

Rs 55,000 crore?the ministry of shipping plans to hike the cap on new infrastructure investments that major ports can make from their own reserves.

?In order to help the major ports implement their infrastructure projects, we are planning to increase the investment a major port can make on its own by 10 times to Rs 500 crore. As of now, the ports can invest not more than Rs 50 crore from their reserves. The proposal is under consideration of the ministry and is expected to be approved soon,? said a top ministry official.

?The initiative, aiming at delegating more powers to the ports to take up their infrastructure projects, will help speedy implementation of the mega ports infrastructure projects like NMDP,? he added.

Welcoming the move, M Ramachandran, chairman, Cochin Port, said, ?Ports have their own capital reserves. This will certainly provide the ports more freedom in using their reserves to build infrastructure, take up modernization and acquire equipments. So the ports having large reserves will certainly benefit from the plan as they will get more operational freedom. However, smaller ports will have to look up to the government to fund their infrastructure upgrade plans.?

However, Neeta Ramnath from Feedback Ventures said, ?The move will not make any difference as far as the speedy implementation of the projects is concerned. There are other issues like security clearance and bottlenecks in hinterland connectivity, which are delaying the projects. The government should first of all focus on this.?

?Ministry of shipping needs to co-ordinate with ministry of railways and National Highways Authority of India to ensure better hinterland connectivity to develop complete logistics channel. This will have a better impact,? she added.

As per the annual investment plan for the ports sector in the year 2008-09, the total investment that the sector is likely to see is worth Rs 3,660 crore. This includes mega investment by the Dredging Corporation of India and Sethusamudram Corporation at Rs 494 crore and Rs 1,581 crore, respectively.

To meet the projected traffic of 615.70 million tonnes by 2011-12 likely to be handled at major ports, it is estimated that capacity of around 800.41 million tonnes would be required. This means creation of an additional capacity of around 403 million tonne by 2011-12, compared with the present capacity of 397 million tonnes.