- DNA
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.
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.
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