To boost inland waterways, Union Minister for Shipping and Ports Nitin Gadkari on Monday said all major ports have been asked to set up subsidiaries, which will leverage dollar-denominated billing to raise low-cost funds.
“My ministry’s total budget is Rs 1,800 crore. It is not possible to undertake the inland waterways projects in that,” Gadkari told reporters on the sidelines of the annual Indo-American Chamber of Commerce meeting here. The new initiative would start with the largest container port in the country, Jawaharlal Nehru Port (JNPT).
He added: “Inland waterways do not have financial credential now. We want to use JNPT’s financial credential for raising foreign loans”
The sector needs Rs 70,000-80,000 crore to develop 20,000 km of inland waterways, said Gadkari. Nearly Rs 50,000 crore in low-cost borrowings can be raised by JNPT alone through receivables, he said, adding the ministry has taken a policy decision to ask other ports to start similar subsidiaries. The ministry has also written to Union finance ministry to get five per cent of the corpus coming from a cess on petrol and diesel for inland waterways, he saidý.
At present, the cess is being utilised for railway and road development (both at Centre and state government levels). Gadkari said it should also be used for the inland waterways.
The government is also mulling a hybrid model of undertaking inland waterway projects. “A private party could undertake development and charge a user fee,” Gadkari said.
Asked about his wishlist from new Reserve Bank of India Governor Urjit Patel, Gadkari said there was a need to reduce borrowing cost by at least 2 percentage points as the current cost of up to 12 per cent for infrastructure loans makes a project unviable. Gadkari said he would be meeting Finance Minister Arun Jaitley on 26 August to present a “car scrapping policy”ý as part of the port-led development initiatives.
The policy is aimed to take advantage of the mandate to switch to Euro-VI vehicles by April 2020, which will result in large scale scrapping of vehicles, he said. The minister claimed the automobile industry’s revenue can zoom to Rs 20 trillion from the present Rs 4.5 trillion as a result of such a policy implementation. Gadkari said the government is very sensitive about the shipping sector which is passing through difficulties, and added that the government is finalising orders ýof up to Rs 50,000 crore to be given to 27 ailing ship building yards.
The ministry will also be introducing a Bill in the next session of the Parliament that shall be abolishing the Tariff Authority for Major Ports, he said.
Source: Business StandardPrevious Next