JNPT for Rs 727 cr interest deferment

The Jawaharlal Nehru Port Trust (JNPT) wants the Rs 727 crore-interest liability on a World Bank loan deferred.

The interest restructuring is expected to help the port raise fresh loan for its Rs 700 crore-channel-deepening project.

"The port has to finance the project through commercial borrowings. We have asked for a moratorium of up to 10 years for the repayment of the interest liability to help the port debt service arrange for new loans," a port official said.

He added that the port had also asked for concessions in the rate of interest it was paying on the loan.

"At present, the port is paying interest at the rate of 10.25 to 10.75 per cent, while the reigning rates were much lower," he said. Ministry officials said the ministry was still negotiating with the finance ministry on the terms and conditions of the restructured loan.

Earlier the port had asked that interest liability be used to fund the channel-deepening project. The proposal, however, was turned down by the Public Investment Board.

This forced the port to look at other options like market borrowings. Sources said port had already approached financial institutions like IDFC.

JNPT had taken a loan in 1986 from the World Bank for part-financing of the port construction. It had raised Rs 300 crore from markets and pre-paid the principal amount in December 2003.

In the first phase, the port planned to increase the draft to 14.5 metres, up 2 metres. This would have allowed the port to entertain vessels from 4000 to 5000 twenty foot equivalent units (TEUs).

At present, it can handle only up to 4000 TEUs. The proposal for channel-deepening has been pending for about a year now. Earlier, opinion differed between the shipping and the finance ministry over the project funding, with the former suggesting that a budgetary support be given for the project.

The finance ministry, however, insisted that the project be done through private investment or through internal accruals.