Port Finance
Total Investment in Port sector is estimated at Rs. 57,000crores. Out of which the bulk of it 58% is for berth development at Container terminals. POL terminals and dry bulk terminals. It comes via PPP model mode. Estimated at Rs 13,000 croes annually. It is due to strong pressure rom port users and industry on Government to improve port services for larger flow of sea borne trade. It may be noted that the Global port investments are PPP driven estimated at 60 billion USS. In India tangible failure in Major Ports have led PPP model mode.
Sources for financing “Non-Major PORT PROJECTS and PPP (Public Private Participation) projects in Major Pots.
a) Aga Khan Foundation b) Abillis Foundation. c) Action aid Inda. d) FDI policy route (Foreign Direct Investment 100% under automatic rules or construction and capital investments)
India ranks 35 in 160 maritime nations. As per WB report in 2022.
Statutory frame work regulating such financing.
- Major Port Authorities Act 2019(replacing MPT act (1963).
- It gives more authority for Governance and Autonomy.
- Leasing of land for port related use is extended to 40yrs. (30yrsin Major Ports and 20 yrs. in non-major ports.)
- Direct Appointment of Consultants.
- Raise loans
- Issue security bonds for manging expenditure.
- Ability to set basic tariffs to reduce litigations. For ports
CONCESSIONS IN MCA (model concession agreement.)
- It was done in 2016 by a notification from Shipping Mnisry.
- Provision for stipulating minimum guaranteed cargo.
- Provision for minimum guaranteed revenue.
- Right to Revision of Tariff
- Right of private players to exit port project after 6yrs and give them the power to issue bonds to refinance debt. Fiscal Incentives
- 10yrs Tax holiday for port projects.
- Financial assistance from the Government to the tune of 50% of the project cost or to the maximum of Rs. 25crores Statutory Frame work regulating Shipping Finances
Labour Acts applicable to port financing
- Money laundering Act 2002
- Self-financing Insurances Scheme for Indian waters earning below Rs. 15000 PM.
- Workmen Compensation Act 1923.
- Trade Unions Act 1926
- Human Resources payroll /tax burden
- Payments of Wages Act 1936
- Industrial Employment Standing Order Act 1946.
- Industrial dispute Act 1946
- Employees Insurance Act. 1948.
- Minimum wages Act 948
- Factories Act. 1948
- Provident Fund act. 1952
- Employment Exchange Act. 1959.
- Apprentice Act 1961.
- Bonus Act 1965.
- Contract Labour Act. 1970
- Equal renumeration Act1976
- State Migrant workers Act 1979.
- Child labour Act 1956, 1986 amended.
- Gratuity Ac1972.