BackGovt-owned ports may form company to build rail links
Under the plan, all 12 Union government-owned ports will contribute equity capital of Rs2-3 crore each in the company
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Bangalore: The shipping ministry is weighing a plan to set up a company exclusively to implement rail connectivity projects to ports owned by the Union government, at least two people familiar with the plan said.
Under the plan, all these 12 ports will contribute equity capital of 2-3 crore each in the company, the chairman of such a port located on India’s western coast and one of the two people mentioned said. The company will have an authorized capital of 100 crore and a paid-up capital of 55 crore.
Shipping minister Nitin Gadkari discussed the plan with chairmen of all the 12 ports at a meeting in Mumbai on 28 July, the chairman of an eastern coast port who attended the meeting said. Both the people declined to be named.
Currently, port connectivity projects are being undertaken through special purpose vehicles (SPVs) set up for each project where the port concerned and Indian Railways are equity partners. “We are facing problems in implementing rail connectivity to ports due to procedural delays," the chairman of the eastern coast port said.
The new company, once it is set up, will implement all planned rail links to the 12 ports. “The new company will be involved with all aspects of the rail link right from the drawing board stage to preparation of detailed project report, raising funds and executing the project," the chairman of the western coast port mentioned earlier said. It may also induct port users as equity partners in the proposed company.
A spokesman for the shipping ministry confirmed the development.
“Development of ports is also critical for boosting trade. Sixteen new port projects (at the 12 ports ) are proposed to be awarded this year with a focus on port connectivity," finance minister Arun Jaitley said in his budget speech on 10 July.
However, experts say that providing rail linkage to state-owned ports is the job of Indian Railways and not that of ports. “As ports, our primary job is to provide cargo handling services to port users. If we are to get involved in building rail links, what is the role of the Indian Railways which is the federal agency tasked with building rail lines," the former chairman of a western coast port who superannuated in January said. “It is also not clear who will operate and maintain the rail lines," he said.
Besides, Indian Railways already runs a wholly-owned government company—Rail Vikas Nigam Ltd—to undertake project development, mobilization of finances and implement projects pertaining to strengthening of golden quadrilateral (national highways) and port connectivity, he added.
Among the projects to be implemented by the new company includes rail link to a planned new port at Sagar Island in district South 24 Parganas, West Bengal.
A 27 km-long rail link-cum road bridge will be part of the Sagar Island port which is estimated to cost 13,576 crore.
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