Hindustan Times ST (Mumbai)

Raise dollar loans

- Jyotika Sood and Utpal Bhaskar

ports Jawaharlal Nehru Port Trust (JNPT, Navi Mumbai), V.O. Chidambara­nar (Tuticorin), Kamarajar (Ennore), Paradip and Kandla plan to raise close to three-quarters of a billion dollars in external commercial borrowings.

After raising $400 million last year, JNPT is going for another dollar-denominate­d loan, said Rajive Kumar, shipping secretary. While the Ennore port is looking to raise around $100 million, JNPT and Tuticorin ports require around $300 million and $230 million, respective­ly, for dredging work, Kumar added. Kandla port is planning to raise $150 million.

This comes at a time when dollar loans are available at a low rate as compared to recent years. In addition, dollar-denominate­d borrowings bear a lower interest rate as compared to those on rupee loans.

Also, it makes sense for the Indian ports to leverage their dollar-denominate­d receivable­s from vessel-related charges such as port dues, berth hire and pilotage which can be utilized to provide a natural hedge against the dollar-denominate­d long-term funding.

The fund-raise plans come in the wake of the ₹8 trillion investment envisaged under Sagarmala until 2035. The Sagarmala programme involves the constructi­on of new ports to harness the country’s 7,517km coastline and setting up of as many as 142 cargo terminals at major ports.

According to Kumar, the ports are working on pre-requisites before they can raise these loans “The quantum (of loan) will vary port to port,” he said.

Ravi M. Parmar, chairman of Kandla Port Trust, said, “We plan to raise around ₹1,000 crore or $150 million and have appointed SBI Cap as our con sultant. Kandla will be the third port in the country that will be raising external commercial borrowing after JNPT and Ennore.”

He added that SBI Cap, which is preparing the detailed project report for the port, will also iden tify the potential of various pro jects.

JNPT, which ships more than half the containeri­zed cargo passing through India’s ports raised $400 million from a con sortium of Singapore’s DBS Bank Ltd and State Bank of India last year.

Vessel-related charges for for eign-going vessels are denomi nated in dollars but collected in rupees after applying the pre vailing exchange rate, according to a practice followed since 1991

Experts believe this may be a good time for the ports to go for dollar-denominate­d loans. “Peo ple are expecting that dollar wil not appreciate. That’s the reason why dollar denominate­d bor rowing rates are at a significan­t low,” said A.B.L. Srivastava chairman, Almondz Globa Infrastruc­ture Consultant­s.

Queries emailed to the spokes persons of V.O. Chidambara­nar Kamarajar, Paradip and JNPT ports remained unanswered.

The government allotted ₹2.4 trillion for roads, railways and ports in 2017-18.

Newspapers in English

Newspapers from India