Project award picks up pace in port sector after PM push

Last Updated: Sun, Nov 18, 2012 03:13 hrs

After Prime Minister Manmohan Singh set high targets for the port sector earlier this year, the Union shipping ministry fast tracked the award of public private partnership projects (PPP). Till October 2012, the ministry awarded nine projects, out of which four were PPP projects.

Last year, it could only award three out of the targeted 23 projects. However, one out of these was the ambitious Rs 8,000-crore fourth container terminal at the Jawaharlal Nehru Port, which will soon be up for re-bid. The project alone made up for more than half of last year's achievements.

The Cabinet Committee on Infrastructure had in September 2012 approved a proposal to give enhanced financial powers to the shipping ministry for awarding port projects that cost less than Rs 500 crore. "The Cabinet decision has removed a major roadblock and has proven helpful in speeding up the process for awarding projects. We are closely monitoring the progress in this matter," said Shipping Secretary P K Sinha.

Earlier, for instance, all projects up to Rs 250 crore had to be approved at three stages; first by the Standing Finance Committee, second by the Committee of Economic Affairs and shipping secretary and then by the shipping minister and the finance minister. For projects above Rs 300 crore, a Cabinet note had to be prepared. For all projects that fell in between (Rs 250 crore and Rs 300 crore), a PPP appraisal committee had to look into them.

For 2012-13, shipping ministry aims to award 42 projects, of which 29 are through the PPP route. The target given by the Prime Minister to shipping ministry for 2012-13 involves a total investment of Rs 35,000 crore and a capacity addition of 244 million tonne. Interestingly, the shipping ministry is making all its efforts count this year.

Hence, the non-PPP projects such as mobile harbour cranes project at Mormugao Port with a 0.25 million tonne per annum (MTPA) capacity is also one of the nine projects awarded thus far. "Since elections are close by, some window dressing could be done to showcase the achievements of the government.

Many of these projects were pending from last year and a lot of ground work had already been done for it," said a senior port trust executive who did not wish to be named.

The four PPP projects awarded till October 2012 include the 330-metre container handling berth at Jawaharlal Nehru Port, development of ship repair facility at Kochi, berth number 14 at Kandla Port Trust and a container terminal at Tuticorin. The latter has been awarded to ABG Container Handling Private Limited and is already under litigation by Indian Port Terminals, which contested the award of the project to ABG. The Rs 3,600-crore Chennai mega container terminal project will also be awarded this year.

However, industry executives are not amused. "Even if the projects are awarded, there are so many hurdles to cross like long procedures and multiplicity of clearances which make the project risky for the private players," said Hemant Bhattbhatt, senior director, Deloitte India.

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