Setting up of Major Ports Update: Sagar in West Bengal + Dugarajapatnam Port in AP

The Government has decided to set up two new major ports – one each at Sagar in West Bengal and the other at Dugarajapatnam in Andhra Pradesh. In respect of the Sagar Port, RITES has estimated capital cost (including connectivity project) at Rs. 7820 crores. The tentative cost for Dugarajapatnam has been estimated at Rs. 7988 crore by the Technical Committee set up by Ministry of Shipping. However, the feasibility study of the proposed location is also being carried out by RITES. In respect of Ports at Sagar and Dugarajapatnam, the concessions are targeted to be awarded in the financial year 2014-15.

The Government has initiated a series of measures to modernise Major Ports in the country. As part of the endeavour, in 2012-13, 32 projects were awarded involving an estimated cost of Rs. 6765 crores with capacity addition of 136.75 Million Tonnes Per Annum (MTPA). During the current financial year (till date) total number of projects awarded is 5 involving a capacity addition of 48.59 MTPA with an investment of Rs. 2045.25 crores.

This information was given by Minister of Shipping Shri G.K. Vasan in a written reply in the Lok Sabha on August 5th, 2013

Will Dugarajapatnam Port be taken up by the SPV Model?

Shipping min may commit Rs. 5,000 cr for two upcoming major ports

Wednesday, Jul 3, 2013, 6:42 IST | Place: Mumbai | Agency: DNA

“We are looking at an SPV model wherein the Centre would pitch in with 74% and the balance 26% would be the contribution from the state government,” said a shipping ministry official.

The Union shipping ministry is toying with the idea of adopting the special purpose vehicle (SPV) based model for the two major ports it is planning in Andhra Pradesh and West Bengal.

This would be in deviation from the trust based model, mandated by  Major Port Trust Act, 1963, and require the government to shell out Rs5,000 crore as equity for the two projects.

“We are looking at an SPV model wherein the Centre would pitch in with 74% and the balance 26% would be the contribution from the state government,” said a shipping ministry official. One port would be located at the Sagar island in West Bengal and the other most likely at Durgarajapatnam in Andhra Pradesh. There are 12 major ports in the country, which are under the direct control of the central government.

“The projects are likely to cost around Rs7,500 crore. The Sagar port would cost around Rs5,500 crore as there has to be a rail link connecting the port from the island. That link only will involve an investment of about Rs3,000 crore. With these projections the government will have to shell out equity worth Rs5,000 crore in both these projects. The state government will have to pitch in with the balance amount,” said the official.

The feasibility study for the projects is currently on and would be completed in the next two months. After the study is over, the ministry will circulate a Cabinet note for the SPV-based funding model for the projects. The two ports are high on the radar of the Prime Minister’s Office. The PMO, in its last week’s infrastructure sector review, has committed that the two projects will be awarded in the current fiscal.

The ministry of shipping has set up a target to award 25 projects worth Rs25,000 crore in a mix of public-private partnership and government spending in the current fiscal.

(Source: DNA)

Andhra Pradesh could be a Port Hub if it weren’t for political uncertainity: FICCI Study

Andhra-Ports-Dugarajapatnam port

Andhra Pradesh commands a share of over 46 % with three projects worth Rs 20,000 crore under construction in the ports sector under the public-private partnership (PPP) model as of April 2013, according to an Associated Chambers of Commerce and Industry of India (Assocham) study.

Of the total, 31 PPP port projects worth over Rs 24,700 crore are operational, with Gujarat having 12 completed projects worth Rs 12,400 crore. The XI Plan experiences of states reveal that barring Gujarat and Odisha, the seven other states – AP, Goa, Karnataka, Kerala, Maharashtra, Pondicherry and Tamil Nadu -could create much lesser capacities than was envisaged in the Plan.

“There is an urgent need to modernize India’s ports as the existing ports are plagued with a plethora of problems like congestion, poor connectivity, accessibility and lack of adequate facilities,” highlighted the ASSOCHAM study. “There is a huge scope for investments in development of port infrastructure which needs to develop fast and the capacity utilization must also be improved.”

The XII Plan objective of attracting more than one lakh crore private investments for developing non-major ports turns out to be an ambitious target unless and otherwise their XI Plan performances are evaluated in proper spirit. The concerned states must seriously consider incorporating the success strategies of others for better fulfillment of the plan objectives, suggested the apex chamber.

India’s merchandise trade has increasingly been affected by its deficient port infrastructure, ASSOCHAM has thus suggested the government to quickly revamp its ports development strategy to attract maximum private resources into the country.

“Political uncertainty over the issue of division of Andhra Pradesh and bad governance in Karnataka have hurt the development of ports, while Gujarat, which has not fared too well in implementation of projects, has succeeded in garnering 50 per cent of the investments for its ports,” said D S Rawat, national secretary general of the Associated Chambers of Commerce and Industry of India (Assocham).

Hope our politicians stop unnecessary squabbling in at least Dugarajapatnam port case and be united in creating this infrastructural marvel.