India: Private Investment in Port Sector May Drop, Ministry Says

Shipping ministry has estimated investment to drop to Rs 51,036.56 crore. The shipping ministry has estimated private players would invest Rs 51,036.56 crore in the port sector during the 12th Five Year Plan, six per cent less than the previous plan period.

G K Vasan, Union Minister for Shipping, said, “We have prepared a report on the sector and submitted the same to the Planning Commission for consideration and approval.”

According to the proposal, the total outlay, excluding private investments, is Rs 26,021.64 crore. This includes government-run or major ports’ investment of Rs 22,757.39 crore, while the balance is for Dredging Corporation of India, Andaman Lakshadweep Harbour Works and Sethusamudram Corporation.

Vasan said the report was under consideration. “Hence, details on investments and allocations can be stated only after the Commission’s approval.”

During the 11th Five Year Plan, the total investment in the sector stood at Rs 87,995 crore, four per cent of the total infrastructure investment during the period. Of this, Rs 54,479 crore, or 61.91 per cent, was from the private sector.

These investments were to create new capacity of 485 mmt in major ports and 345 mmt in minor ports. During the 10th Five Year Plan, the total investment was Rs 14,071 crore. Of this, private players accounted for Rs 10,356 crore.

According to a report by ICRA, cargo growth at Indian ports was around four per cent last year. While growth in cargo volumes at major ports was 1.6 per cent, non-major ports reported nine per cent rise. In terms of market share, non-major ports increased their share to 35 per cent, from 34 per cent.

Indian ports are expected to handle one billion tonnes of cargo in 2011-12, two billion tonnes by 2016-17 and 2.4 billion tonnes by 2019-20.

Growth at non-major ports is expected to outpace that at major ports, with the former commanding a 51 per cent share of the total cargo in a decade. By composition, coal and containers are expected to drive much of the growth, according to ICRA.