India expects a $60-billion investment in its ports by 2020 to ease infrastructure bottlenecks. This expenditure would be part of the planned $1-trillion revamp of India’s choked transport and power networks.
“The focus will be on awarding projects under the public-private-partnership mode, with [a] chunk of investments coming from the private sector,” B.K. Chaturvedi, a member of the Planning Commission, told a local newspaper. Currently, 74 projects have been implemented, and 29 projects have yet to be approved. In addition, the National Maritime Development Program has planned two large shipyards and asked the maritime states to identify possible sites—one on the east coast, one on the west coast—for the shipyards, said the minister of shipping, G.K. Vasan, in the country's parliament.
With 600 million tonnes of capacity planned between 2012 and 2017, the Ministry of Shipping has set an agenda that would boost container use, improve equipment, increase road and rail linkages, and deepen the draft at major ports from the present 10 to 14 meters to, for some major vessels, 18 m.
India has 12 major and 176 minor ports. Existing ports will need to augment their capacity, especially as an additional 403 metric tonnes are expected by March 2012, the end of the fiscal year. While the overall capacity of major ports would reach about 616 metric tonnes, a shortfall of 200 metric tonnes would remain.
The Ministry of Shipping also is planning special-purpose vehicles (SPVs) by 2017 at seven major ports in Gujarat, Maharashtra, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Orissa. While the land will be acquired by the respective states, the SPV model is being adopted to help the government raise funds from the market. Each port is expected to cost approximately $1.1 billion.
Ennore Port Ltd., India’s first corporate port owned by the federal government, is now planning to raise money through private equity to partly finance the expansions. The proposed funds would create the infrastructure, which in turn would bring in $1.5 billion, said Vasan. Furthermore, the government-owned Cochin Shipyard is planning to expand its capacity by setting up ship-repair and dry-dock facilities at an alternate location.
The Tariff Authority for Major Ports currently regulates tariffs for vessels and cargo and rates for property leasing. The Ministry of Shipping now has installed an independent tariff regulator. A draft "Ports Regulatory Authority Bill, 2011" has also been formulated, which, if enacted, would establish authorities to monitor performance standards and regulate rates for the facilities and services provided at ports, Vasan said.