The government’s ambitious asset monetisation campaign for ports has had a difficult start, with the Ministry of Ports, Shipping and Waterways (MoPSW) only able to grant projects worth 14% of the target amount in 2021-22. The ministry was only able to make money on three projects worth around Rs 1000 crore this fiscal year, falling far short of the target of Rs 6924 crore from 13 projects. The national monetisation pipeline (NMP) for the sector, according to NITI Aayog, includes nine of India’s 12 main ports.
“All 13 projects have been processed and MoPSW is ready to award them, but the projects are yet to get security clearance. While three projects have been awarded, the remaining ten will be awarded once they’re cleared by the concerned ministries,” a senior official said.
Awarding of contracts for these projects can only take place after obtaining separate security clearances from the Ministry of Defence, Ministry of External Affairs, and Ministry of Home Affairs, as the projects fall in strategic areas. As per government regulations, the final security clearance accorded to a bidder is typically valid for five years.
Sources in MoPSW indicated that there is active interest in the tenders that have been floated for monetisation of several port operations and the ministry is optimistic about its monetisation drive in the current and upcoming financial years, despite delays in security clearances.
The 13 projects include big-ticket items like development of western dock captive berth at Paradip Port for Rs 3000 crore, leasing out of a container terminal at Jawaharlal Nehru Port Trust (JNPT) for Rs 863 crore, and operations and management (O&M) of Mumbai International Cruise Terminal for Rs 495 crore.
According to the NMP plan released by NITI Aayog, the central government plans to monetise 31 cargo berths valued at Rs 12,828 crore by the end of 2024-25, accounting for 2 per cent of the overarching monetisation target of Rs 6 trillion. The shipping ministry is also understood to have tweaked its monetisation targets for this fiscal year in view of the shortfall in FY22, which will be on the agenda in the upcoming apex committee meeting of the ministry’s flagship Sagarmala plan. The NMP lays out port assets worth Rs 4,680 crore in FY23, Rs 915 crore in FY24, and Rs 1940 crore in FY25 for leasing out to private entities. The contracts will be awarded for a 30-year period and actual capital investment is likely to happen in phases during the initial years in the envisaged concession period.
