Big ports need huge outlays on dredging

An investment of about Rs 5,812 crore is expected to go towards meeting the capital dredging requirement of the country's major ports in the country over the next five years. Out of this, while Rs 2,568 crore is likely to accrue from Government grants, Rs 2,275 crore of expenditure would be met through internal resources, Rs 866 crore through extra budgetary resources and the rest through public private partnerships. Major ports are those ports that are under the jurisdiction of Central Government.

These projections are according to a report titled "Financing Plan for Ports" prepared by a task force comprising officials from some of the major ports, the Shipping Ministry, the Power Ministry, the Finance Ministry and Planning Commission, amongst others. Over and above the existing capacity of about 456 million tonnes in major ports, the ports need to add a 546 million tonne capacity during 2006-07 and 2011-12, taking the total capacity to 1,002 million tonnes, says the report.

Activity-wise

A total investment of Rs 57,452 crore is required in major ports during 2007-12, it says, adding that the investments would go towards upgradation and construction of berths; deepening of channels; and procuring, replacing and upgrading equipment at the ports.

From the total investment, Rs 32,875 crore would be used for berth development (Rs 11,502 crore towards container terminals; Rs 10,314 crore towards berths for petroleum oil and lubricants; Rs 11,059 crore towards other cargo berths) and Rs 5812 crore for capital dredging.

In procuring equipment that would increase the efficiency of ports, Rs 3,604 crore would be spent during the period; while Rs 12,207 crore would be spent on other activities like creating various infrastructures within ports, ship/container repair facilities, breakwaters and shipbuilding facilities.

For improving road and rail connectivity to the ports, the major ports together are likely to put in about Rs 2955 crore - while the rest of the investments would accrue through various projects of the Surface Transport Road and Railway Ministries.

Sources of finance

From the total investment requirement of Rs 57,452 crore, the task force has estimates that Rs 38,079 crore would be mobilised through public-private partnership projects; Rs 2,174 crore through extra budgetary resources (market borrowings); Rs 14,175 crore from internal resources and Rs 3,024 crore through Government grants.

While specifying that ports may be required to raise Rs 2,174 crore through market borrowings to meet the shortfall between inflows from all sources and projected outflows, the task force has suggested that the borrowings would be capped by the ability of Port Trusts to repay these borrowings. "Where necessary, the feasibility of loans from one Port Trust to another would also be explored," said the report.