Port monetisation drive hits security clearance hurdle

CENTRE COULD AWARD PROJECTS ONLY WORTH ~1,000 CRORE IN FY22, FALLING SHORT OF ITS TARGET OF ~6,924 CRORE

The government’s ambitious asset monetisation drive for ports has got off to a rocky start. This is because the ministry of ports, shipping, and waterways (MOPSW) has been able to award projects worth only 14 per cent of the target in 2021-22.

The ministry has been able to monetise three projects worth approximately ~1,000 crore, falling significantly short of the target of ~6,924 crore from 13 projects for this fiscal year.

According to NITI Aayog, the national monetisation pipeline (NMP) for the sector encompasses nine of India’s 12 major ports.

“All 13 projects have been processed and MOPSW is ready to award them, but the projects are yet to get security clearance. While three projects have been awarded, the remaining 10 will be granted once they’re cleared by the concerned ministries,” a senior official told Business Standard.

Awarding of contracts for these projects can only take place after obtaining separate security clearances from the ministry of defence, ministry of external affairs, and the ministry of home affairs, as these projects fall in strategic areas. According to government regulations, the final security clearance accorded to a bidder is typically valid for five years.

Sources in MOPSW indicated that there is active interest in the tenders that have been floated for monetisation of several port operations.

The ministry is optimistic about its monetisation drive in the current and upcoming fiscal years, despite delays in security clearances.

The 13 projects include big-ticket ones like development of western dock captive berth at Paradip Port for ~3,000 crore and leasing out of a container terminal at Jawaharlal Nehru Port Trust (JNPT) for ~863 crore. They also include operations and management (O&M) of Mumbai International Cruise Terminal for ~495 crore. According to the NMP plan released by NITI Aayog, the central government plans to monetise 31 cargo berths valued at ~12,828 crore by the end of 2024-25. This is 2 per cent of the overarching monetisation target of ~6 trillion.

The ministry is also understood to have tweaked its monetisation targets for this fiscal year in view of the shortfall in FY22. This will be on agenda in the upcoming apex committee meeting of the ministry’s flagship Sagarmala plan.