NEW DELHI, May 22: In order to facilitate private sector investments, the ministry of surface transport (MoST) has decided to permit major ports to forge joint ventures with such firms to develop ports and related facilities. The fund requirement in the sector is over Rs 40,000 crore in the Ninth Plan period (1997-2002).

MoST sources said the joint venture proposal had the "in-principle" clearance from the committee of secretaries (COS). The panel agreed on the need for an enabling provision for the major ports to forge joint ventures at the March 12 meeting. The meeting was attended by Cabinet Secretary TSR Subramanian, Secretary (coordination) Ajit Kumar and senior officials from the ministries of surface transport, coal, environment and forests, fertilisers and finance.

With plans to issue detailed norms for joint ventures in the next 2-3 months, the transport ministry is presently working on issues related to selection of joint venture partners, equity participation and bidding process. It has already written to the Port Trusts of all the 11 major ports, seeking their suggestions on the joint venture proposal.

``In fact, the authorities at Jawaharlal Neru Port Trust (JNPT), Kandla, Madras, Tuticoran and New Mangalore have shown interest in joining hands with the private sector for development of port facilties,'' according to MoST officials.

Though the ministry is yet to make up its mind about equity structure of the joint ventures, it is considering several options such as 30 % equity participation by major ports. However, it plans to provide for built-in safeguards ``against the port authority cornering all the prime projects''.

A final decision will be taken only after consultations with the port trusts. For identification of the joint venture partners, the secretaries' panel has directed the ministry to spell-out procedures ``which need not necessarily provide for only a competitive bidding process''.

Most sources said the joint ventures will help meet the fast-expanding capacity requirement of 430 million tonnes of traffic by the end of Ninth Plan (2002). In fact, the traffic level is estimated to be about 800 million tonnes by 2007, thereby creating a requirement of 300-400 addtional berths to handle cargo of different types. MoST estimates put the requirement of funds for the creation of additional port capacity at Rs 40,000 crore. Of this, the government hopes to provide only about Rs 10,000 crore by way of budgetary support and internal resources of the ports for investment in port development. ``Therefore, the balance will have to come from private sector or capital market,'' according to transport officials.

In the next 3-4 years, the transport ministry plans to offer a number of prime projects, with total indicative costs of $ 6595 million, for private sector participation.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.