TN ports to benefit from new land management policy

Port managements say guidelines remove several bottlenecks

The new land policy guidelines for major ports are expected to increase the business performance of the two major ports in Tamil Nadu - the Chennai Port and the Ennore Port. The top management officials of both the ports said that the new policy removes several bottlenecks in land allotment.

So far, the ports were not allowed to make long or medium term lease arrangement for their lands. Hence, they had to stick to agreements of up to 11 months, which discouraged companies from making long term investments.

The Chennai Port Trust, which currently gets Rs 66 crore of its Rs 650 turnover from leasing of its land, is expecting the new policy to compensate for the loss it made when it lost the coal and iron ore business earlier, after the court banned handling of these materials in the Port.

“The new land policy has cleared a major bottleneck which was preventing the companies from investing in the land. We have lost around Rs 226 crore in terms of iron and coal business and 50% of the available land with us is vacant now. We expect around Rs 200-250 crore to come from leasing, combining the through put, with the new policy,” said Atulya Misra, chairman, Chennai Port Trust.

The Port has around 800 acres of land, of which around 300-400 acres is water front and around 400 acres is land area. Of the land area, leaving the infrastructure facilities like the road and railways, around 30-50% of the land is vacant at present, said company officials.

The Port Trust expects interest to come from industries who are looking for covered areas, like warehouses and covered car parking spaces, in the case of car exporters. The Trust would also look at offering concessions to attract the customers. The customers, in turn, can set up storage spaces since the lease agreement can extend for a long term, such as 30 years.

M A Bhaskarachar, chairman cum managing director of Ennore Port said that while the port currently doesn't have any vacant land, it is in the process of acquiring around 730 acre of land from the Salt Department. The procedures are expected to completed within a month or two.  The policy would then help it  lease out the space.

“At present we have 2,000 acres of land and almost all are either allotted or earmarked for future projects. We are acquiring 730 acres of land and once we complete that, we can offer it to the firms which are using the port,” he said. The company is expected to invest around Rs 500 crore to add the 730 acre land into its capacity.

The new policy would also boost public-public partnership, with collaboration of Port Trusts with other government organisations or Public Sector Undertakings such as oil distribution firms or electricity boards, said Misra.

“So far there was a confusion over whether we should treat the PSUs or other government organisations as equal to any private company or to give some preferences. The new policy has clarified such things and it will boost the Public-Public Partnership,” he said.