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The Jawaharlal Nehru Port Trust (JNPT) has agreed to extend financial assistance of Rs 200 crore to the loss-making Mormugao Port.
JNPT has cash reserves of over Rs 3,500 crore. While much of its reserves are deposited in a bank, around Rs 1,900 crore has been set aside for dredging the 30-km-long channel between Mumbai and JNPT.
The government asked the port trust, in its recent board meeting, to financially support its neighbouring port in a financial crisis. The port trust would get 10 per cent interest from Mormugao Port for the loan it has sanctioned. Besides JNPT, New Mangalore Port Trust too has extended a loan of Rs 100 crore to the port to tide over its current crisis.
Between April and October 2013, the cargo at the port declined by 52.65 per cent with just 6.3 million tonnes as against 13 mt for the corresponding period last year.
The port incurred a loss of Rs 140 crore last year and all its efforts are going towards not increasing its losses this financial year.
“We will use the money that JNPT is giving us to fund the voluntary retirement scheme. The government has asked some people to go,” said a senior official of Mormugao Port. Around 25 of 2,515 employees of the port trust are taking a VRS this financial year.
At the time of its inception, JNPT had received a loan of Rs 700 crore as part of a seed fund. Over time, JNPT has returned the loan with full interest to Mumbai Port.
Currently, of the 12 major ports, three -- Kochi, Chennai and Mormugao -- are making losses due to fall in cargo. While the government has not extended any help to Kochi and Chennai, for Mormugao it has made an exception, since the port has suffered due to ban in iron ore cargo.
“The port has started handling alternative cargo. We are hoping that the Supreme Court will soon give a breather for iron ore cargo that can ease things for Mormugao,” the shipping ministry official said.
