JNPT's plan nixed

The Public Investment Board (PIB) today turned down the shipping ministry's proposal to allow the Jawaharlal Nehru Port Trust (JNPT) to use part of the Rs 727 crore it owes to the Centre, as interest for deepening its channel.

The project is estimated to cost Rs 600 crore.

This decision does not augur well for the shipping ministry's maritime policy proposal of government funding for dredging projects at various ports.

It is, however, consistent with the finance ministry's stand on the issue that private investment should be invited to dredging, though the shipping ministry has been pointing at the lack of private interest.

It asked the port to finance the project through its internal resources. The PIB, which met today, decided in favour of a liberal repayment schedule for the interest payment.

"'This is being done so that JNPT does not face any problem in servicing the loan needed for the channel deepening project," a government official told Business Standard.

JNPT owes Rs 727 crore as interest to the government for the World Bank loan the port took, when it was set up in the early 1980s.

The principal debt was paid in December 2003.

Sources indicated that JNPT would now resort to market borrowings to fund the project.

This is not the first time that JNPT would be going to the market.

It has already raised around Rs 300 crore through market borrowing, to pay the principal amount of the World Bank loan taken to build the port.

In the first phase, the port planned to increase the draft by 2 metres to 14.5 metres. This would have allowed the port to entertain vessels in range of 4000-5000 20 foot equivalent units (FEU). At present, it can handle only upto 4000 FEUs.