Government keen on upgrading ports, eyes at $2 Billion in foreign funding.
2015-02-18 Posted By:Infra Bazaar
In a bid to upgrade the major seaports in the country, Government is planning to raise $2 billion in funding from the overseas sources. The government uses the funds to upgrade the ports’ infrastructure and improve the road and rail connectivity to the major ports.
The shipping ministry is said to have finalized a proposal to develop 12 major ports in the country that are combinedly generating $400 million in income, in a year. The plan, however, needs a nod from finance ministry and the Reserve Bank of India as well.
The shipping ministry is looking to explore the cheap funding sources, banking on its own big numbered income as a security. Officials in the ministry believe that majority of an expected three lakh crore investments in the major and minor ports will come from the private sector.
Shipping ministry is said to be exploring all the opportunities to raise funds, particularly overseas. It is also learned that the ministry hasn’t finalized any fund raising source or mechanism at this moment. As per the sources, officials are in talks with some foreign banks.
"Ports are not hard pressed for money but we want access to cheaper funds. We can use our dollar denominated earnings as a security to raise more finance and it will be hedging for our funds as well," media quoted a senior official as saying.
Apart from the private funds, Government also needs public funds to further strengthen the top ports by improving road and rail connectivity to the ports, and for deepening of the port channels etc.
Government needs about 27,000 crore rupees to execute the road and the rail connectivity projects. It also needs some funds to finance “Rail Corporation”, which is being set up by the 12 major sea ports in India, particularly to oversee the rail related port projects.
Given the fact that the country has 7,500 KM long sea coast, government has its prime focus on shipping industry, as it has the potential to attract huge investments. In the last couple of years, government has added an additional 159.65 MT capacity, with 18,000 crore worth completed projects under public-private partnership mode.