Cabinet approves incorporation of a company for Sagarmala project


In a major push to port-led development, Union Cabinet today approved incorporation of Sagarmala Development Company under the Companies Act, 2013, with an initial authorised share capital of Rs 1,000 crore and a subscribed share capital of Rs 90 crore.

The prime objective of Sagarmala project is to promote port-led direct and indirect development and to provide infrastructure totransport goods to and from ports quickly, efficiently and cost-effectively.The company will be under the administrative control of theMinistry of Shipping. It will provide equity support to the project Special Purpose Vehicles (SPVs) and funding support to the residual projects under the Sagarmala Programme.

Implementation of the identified projects will be taken upby the relevant ports, state governments or maritime boards, central ministries,mainly through private or PPP mode, provide equity support for the project SPVsset up by the ports, state or central ministries and implement those residual projects that cannot be funded by any other means. Sagarmala Development Company will identify port-led development projects and assist the project SPVs in project development and structuring activities, bidding out projects for private sector participation, putting in place suitable risk management measures for strategic projects cutting across multiple states and regions and obtaining requisite approvals and clearances.

It will also work as the nodal agency for coordination and monitoring of all the currently identified projects as well as other projectsemerging from the master plans or other sources. The company would prepare detailed masterplans for the Coastal Economic Zones (CEZs) identified as part of the National Perspective Plan (NPP) and provide a framework for ensuring the integrated development of Indian maritime sector.

The company will raise funds depending on the project requirements or by leveraging resources provided by the government and from multi-lateral and bilateral funding agencies. It would also aim to increase the scope of private sector participation in project development. More than 150 projects across the areas of port modernisation and new port development, port connectivity enhancement, port-led industrialisation and coastal community development have been identified under the Sagarmala project.

Meanwhile, the Cabinet Committee on Economic Affairs today approved construction of a new dry dock within the existing premises of Cochin Shipyard Limited at an estimated cost of Rs 1,799 crore to augment the shipbuilding and repair capacity of the country. The expenditure of Rs 1,799 crore will be funded through Internal and Extra Budgetary resources (IEBR) of Cochin Shipyard and the funding requirements are fully tied up. 

There would be no financial outgo from the government on account of the construction of new dry dock, an official statement said. Augmentation of shipbuilding and ship repair capacity is essentiallyrequired to tap the market potential of building specialised and technologically advanced large vessels such as Liquefied Natural Gas (LNG) vessels, Indigenous Aircraft Carriers of higher capacity, jack up rigs, drillships, large dredgers and repairing of offshore platforms and larger vessels. This big sized dry dock is a critical requirement of Cochin Shipyard to promoteship building and is a step in the direction of government's Make in Indiainitiative, an official statement said.

Shipbuilding and ship repair is a labour intensive industryand apart from direct employment of 300 personnel, about 2,000 personnel wouldbe indirectly employed when the project becomes fully operational.

Source: Business Standard 

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