Major ports cannot avail of the R5,000-crore borrowing window opened by the finance ministry for the current financial year as the shipping ministry has yet to decide on who would be raising the sum. With less than five months remaining to complete the fiscal, the shipping ministry has a lot to do before it can actually reach the markets for funds.
Till now, the shipping ministry was pursuing the case of Jawaharlal Nehru Port Trust and Ennore Port for borrowing from markets to meet their development needs. However, the finance ministry had reservations on the proposals saying the ports already had cash surpluses and did not need any debt.
The shipping ministry had also thought of setting up an overseas port investment arm called Indian Ports Global with a mandate to utilise the borrowing window. However, the very purpose of setting up the new institution ? that of investing in ports overseas ? came in the way of the proposal as there were concerns of the money borrowed in India being used outside the country.
Finance minster Pranab Mukherjee had allowed borrowing of R5,000 crore this year for development of major ports in the country. This was part of an overall window of R30,000 crore for infrastructure development, including roads, railways, urban utilities and ports. Indian Railway Finance Corporation was to borrow R10,000 crore, National Highway Authority of India R10,000 crore, Housing and Urban Development Corporation R5,000 crore and ports R5,000 crore.
Now the shipping ministry has returned to a proposal of setting up Maritime Finance Corporation that was put on the back burner early this year. ?We had thought Indian Ports Global would fit the bill but that could not happen. Neither did the finance ministry allow JNPT and Ennore Port to borrow funds. So we have restarted work on setting Maritime Finance Corporation that could do the job of raising money and lend that to major ports,? a senior official in shipping ministry said, asking not to be named.
Even if the ministry finalises the plan to form the proposed financing body, it has a long route to cover before any money is borrowed. First of all, the proposal would need Cabinet nod. If approved, the corporation could draw up a strategy for going to the markets only after selection of a chairperson and a team of officials. Ongoing weak market conditions is another factor that could delay the borrowing decision.
Meanwhile, ports are working on to award up to 23 projects worth R16,750 crore this year. Till now, only one terminal development project has been bid out to the private sector. Last week, shipping secretary K Mohandas said he expected major ports would award at least 22 projects despite problems in environmental clearances and other procedural issues.