The ministry of ports, shipping and waterways has prepared a list of seven operational cargo berths run by government-owned major ports that will be privatised this fiscal through the public-private-partnership (PPP) route as the State-run ports move from a ‘trustee’ set up to an ‘authority’ model of governance under a new law passed by Parliament in February.
The seven projects identified for monetisation/privatisation are estimated to draw investments worth ₹2,551 crore for modernisation and upgradation, according to the ministry.
The plan follows an announcement made by Finance Minister Nirmala Sitharaman in her Budget speech to Parliament on February 1.
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“Major ports (those owned by the Centre) will be moving from managing their operational services on their own to a model where a private partner will manage it for them. For the purpose, seven projects worth more than ₹2,000 crores will be offered by the major ports on public-private-partnership mode in FY21-22,” Sitharaman said.
Projects to be privatised
The projects being lined up for privatisation include a container terminal run by Jawaharlal Nehru Port Trust (JNPT) with a capacity to load 1.8 million twenty-foot equivalent units (TEUs) estimated to cost ₹863 crore.
Berth No. 14, a mechanised fertiliser handling facility at Deendayal Port Trust in Kandla, Gujarat, with a capacity to handle 5.3 million tonnes (mt) of cargo is also in the list of projects to be privatised, involving an investment of ₹300 crore.
Berth No. 9, a bulk cargo terminal at VO Chidambaranar Port Trust will be converted into a container terminal to handle 1.2 million TEUs with an investment of ₹435 crore.
The North Cargo Berth-III, also at VOC Port Trust, with a capacity to handle 8.9 mt, will be auctioned to a private operator, with an investment of ₹420 crore.
A dedicated berth run by JNPT to handle ships that ply only on local routes, will be bid out to a private operator who will invest ₹170 crore. The terminal has a capacity to handle 2.5 mt.
The South Quay Berth (SQB) at Paradip Port Trust will be mechanised through the PPP route with an investment of ₹75 crore to handle 1.5 mt of cargo.
The West Quay Berths 7 and 8 at Visakhapatnam Port Trust with a capacity to load 5.8 mt of cargo will be given to a private investor who will invest ₹288 crore.
Privatisation of State-run cargo berths has become necessary as the ‘port authority’ formed for each of the 11 ports under the Major Port Authorities Act 2021 will play the role of a landlord —a model widely followed globally wherein the publicly governed port authority acts as a regulatory body and as landlord while private firms carry out port operations, mainly cargo handling activities.
The landlord port, in return, gets a share of the revenue from the private entity.