Govt forms panel to increase capacity addition in ports sector

Concerned about the slow pace of capacity addition in the ports sector,the government has set up a committee to look into the financing plans for ports projects in the remaining part of the current five year plan....

Concerned about the slow pace of capacity addition in the ports sector,the government has set up a committee to look into the financing plans for ports projects in the remaining part of the current five year plan. The committee,to be headed by Planning Commission member B K Chaturvedi,will have the mandate to suggest capacity addition targets for the twelfth five year plan along with financing models for the ports sector in the next plan.

The move comes on the back of concerns over the tardy progress in the sector compared with the targets set for the current five year plan. The shipping ministry had been given a target of adding 500 million tonnes of capacity during the eleventh plan at major ports but has managed only 70 million tonnes so far.

We have set up a committee to look for alternate modes of financing for the ports sector and see whether the budgetary allocations are adequate. We want the ministry to do far more projects than they are awarding currently to quicken the pace of development in this sector, Montek Singh Ahluwalia,deputy chairman Planning Commission said.

The ministry had set a target for awarding 17 port projects in this fiscal but has not awarded a single project so far. It has,however,managed to push five projects carried over from last years unrealised target. Four more from last year are yet to be bid out, said a government official. The projects involve development of iron ore berths,container terminals,bulk cargo handling berths,among others at some of the major ports such as Paradip,Vishkhapatnam and Ennore.

The ministry maintains that it will be able to award these 17 projects bringing in investment to the tune of Rs 20,000 crore by March 31,2010. It is likely to complete the process of inviting requests for proposal for these 17 projects by November-end. We should be able to add a capacity of 60 million tonnes by the end of the current fiscal,taking the total to about 130 million tonnes, a senior government official said.

Even as projects that are in the process of being bid out have received as many as seven to eight bids from different players and a consortia of international standing,the government wants to work out innovative methods of financing within the PPP framework to speed up the entire process.