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Shipping ministry to sign pact with IIFCL for projects at 12 major ports on PPP model

The Economic Times:  May, 2015

New Delhi: India Infrastructure Finance Company has agreed to provide long-term finance for developing port infrastructure in the public-private partnership mode, a senior government official said.

The shipping ministry will soon sign an agreement with IIFCL that will secure funds for important projects at the country's 12 major ports, the official said.

The ministry aims to develop port projects worth Rs 15,000 crore through public-private partnership. "It will be an enabling factor for projects. Compared to commercial banks, IIFCL will be in a position to provide longer-term loans even at the same interest rates," the official said, requesting anonymity. The agreement will also give the ministry access to IIFCL's advisory services for infrastructure projects. The ministry had awarded 26 projects under the PPP mode, entailing an investment of Rs 15,483 crore, in 2012-13 and 2013-14.

As on December 2014, the 12 major ports had a capacity to handle 838.68 million tonne of cargo. In 2014, the capacity went up by 7% over the previous year.

Out of the 276 projects identified under the National Maritime Development Programme (NMDP), 82 have been completed. Another 56 projects are in progress and 30 have been dropped as they were found unfeasible by the port trusts. The remaining projects are now part of the Maritime Agenda 2020.

Port projects have been delayed for a variety of reasons, from the time taken for completion of detailed project reports, delay in grant of security clearance to shortlisted bidders. Litigations and held up environment clearance have also contributed to the tardy implementation of the projects. In order to improve the functioning of port trusts, the government recently rationalised their financial powers. They can now execute contracts and deposit works, take temporary loans, overdrafts, incur capital expenditure, sanction works, compound or compromise claims and write off losses among other things. Besides, the new projects at the existing ports, the shipping ministry wants to add five new ports to its list. Two of these have been finalised in Sagar Island, West Bengal and Durgarajapatnam in Andhra Pradesh.