The Mumbai Port Trust (MbPT), which until a few years ago was the pride of the Indian maritime industry, is planning to sell about 350 hectares of prime real estate in south Mumbai.
The board of trustees of MbPT have already taken a decision to this effect. However, the proposal is yet to be cleared by the Union surface transport ministry.
"We are yet to hear from the central government. We can go ahead with the sale only after their permission is received," a senior MbPT official said.
The port trust, whose fortunes are flagging, has decided to go for the sale in an attempt to get out of non-core areas.
It has proposed a two-pronged approach for the sale. The real estate could either be sold to the existing tenants, or through the competitive bidding route at market driven rates.
The land has been leased to corporates, including big names like Hindustan Lever, Britannia Industries, Bombay Dyeing and the Tata group. The lease period ranges form 30 years to over 120 years. The earliest lease was in 1879.
Attempts by the port trust to raise the rent has been stiffly opposed by tenants resulting in legal battles in the Mumbai High Court and the Supreme Court.
"The only consequence of trying to raise the rent has been court cases. It makes sense to sell to tenants. If we are unable to go through with the sale through this route, tenders will be floated. In either case, prices will be market driven. Also, the price at which the real estate will be sold will factor in the unpaid rent. There will be no distress sale," the official added.
Interestingly, the move comes at a time when MbPT is steadily losing cargo to the Jawaharlal Nehru Port in Navi Mumbai. MbPT handled 2.54 lakh TEUs (twenty feet equivalent units) in 2001-02, as against 3.21 lakh TEUs in 2000-01.
Although the port has been making profits (operating surplus), it ended the last two years with a deficit. Last year's deficit stood at Rs 236 crore.
