Shipping ministry to exceed 4-yr asset monetization aim
1 min read . Updated: 07 Apr 2023, 09:27 PM IST
PremiumThe goal is to raise ₹ 6,760 crore this fiscal year through the development of berths and terminals at major ports under the PPP initiative.
NEW DELHI : The union ministry of ports, shipping and waterways is set to widely surpass its four-year asset monetization target of ₹12,828 crore ahead of the deadline thanks to robust awarding of projects under the public-private partnership (PPP) model.
In an interview, union minister for ports, shipping and waterways, Sarbananda Sonowal said the aim is to raise ₹ 6,760 crore this fiscal year through the development of berths and terminals at major ports under the PPP initiative.
He said 20 projects worth close to ₹7,000 crore would be put on the block for monetization this fiscal. This would help the ministry exceed the monetization target set for the sector under the National Monetisation Pipeline (NMP) of ₹6 trillion finalized by the finance ministry in 2021, he added.
Most of the current year’s monetization would involve developing a new berth at the Deendayal Port (Kandla, Gujarat), setting up a container terminal at Haldia Dock Complex of Shyama Prasad Mookerjee Port (Kolkata, West Bengal), and plan for a dry dock in Vadinar (Gujarat).
In the first two years of monetization (FY22 and FY23), the ministry of ports had monetized ₹10,519 crore of assets, involving a dozen projects, as against a target of ₹4,936 crore. This was more than two times the target for the two-year period.
Sonowal noted the strong performance of his ministry in terms of asset monetization in the past two fiscal years. In FY22, the Centre approved 13 projects worth ₹6,944 crore, and according to a year-end review report released by the ministry for 2022, seven projects worth ₹ 5,278 crore were awarded and others were in various stages of bidding. Finally, monetization achieved ₹ 975 crore in terms of value that year.
In FY23, about 24 projects valued at ₹12,550 crore were scheduled for award, out of which approval was accorded to seven projects by the government by December. The latest report shows that assets worth ₹9,544 crore were monetized under nine projects awarded under the PPP mode last fiscal.
The ministry has a pipeline of 81 projects totalling more than ₹42,400 crore, to be awarded on PPP mode till FY25 even though the target under the NMP is just over ₹ 12,000 crore.
According to the NMP, assets put under the monetization process, including additional berths, mechanisation, development of oil jetty, container jetties, operation and maintenance of container terminal, operation and maintenance of international cruise terminal and development of marina. The primary model for monetization of ports and shipping assets is through grant of PPP concessions.
Shipping has been among the few departments along with coal and mines ministries, which have exceeded their monetization targets last fiscal. For FY23, the Centre had set a target of ₹ 1.62 trillion, and till FY25, the government seeks to monetize assets worth ₹6 trillion under the NMP.
In FY22, transactions worth ₹ 96,000 crore under the NMP were completed, largely backed by shipping, coal and mining assets, exceeding the target of ₹ 88,000 crore. The NMP has been designed for a dozen infrastructure line ministries and are spread across 20 asset classes. The announcement was made in the FY22 budget with Niti Aayog given the mandate to develop it. The ambitious asset monetization plan was announced to boost financial resources for the National Infrastructure Pipeline.
India’s maritime sector offers significant scope to the government for asset monetization. India has 12 major and over 200 non-major ports situated along its 7500 km long coastline and a vast network of navigable waterways. Collections from asset monetization is also important for India as part of its fiscal consolidation as it helps to keep deficit under check while providing more funds to the Centre to undertake expenditure important support economic recovery and growth.