CAG finds PPP in­ef­fec­tive in mar­itime sec­tor

Project Monitor - - FRONT PAGE - PM RE­SEARCH BUREAU re­port by the Comptroller Au­di­tor Gen­eral (CAG) re­cently tabled in Par­lia­ment made a scathing ob­ser­va­tion about the fail­ure of the PPP model in the mar­itime sec­tor. The re­port ob­served that only 33 per cent of new ca­pac­ity added to majo

Sta­tus

Com­pleted

Un­der Con­struc­tion

Pipe­line

Ter­mi­nated

Dropped

To­tal

PPP PROJECTS IN MA­JOR PORTS PPP projects propos­ing a to­tal ca­pac­ity of 751.71 mil­lion tpa (see ta­ble) to ma­jor ports. Ca­pac­ity of 264.69 mil­lion tpa was achieved from 35 projects com­pleted by March 2014. An­other 27 projects with ca­pac­ity ad­di­tion of 221.94 mil­lion tpa were un­der con­struc­tion while 27 oth­ers with pro­posed ca­pac­ity ad­di­tion 257.97 mil­lion tpa were in the bid­ding stages. Two projects ag­gre­gat­ing 6.11 mil­lion tpa were dropped.

The CAG re­port also quotes a num­ber of in­stances where poli­cies re­lat­ing to PPP were found to be weak. In one such case, the grantor of con­ces­sion, JNPT, en­tered into an

No. of projects

35

27

27

1

1

91

Cost (` crore)

17,106.08

19,910.55

26,213.38

204.04

278.90

63,712.95 Ca­pac­ity (mln tpa)

264.69

221.94

257.97

2.00

5.11

751.71 agree­ment with Nhava Sheva In­ter­na­tional Con­tainer Ter­mi­nal (NSICT) in July 1997 wherein roy­alty was fixed on per TEU ba­sis which pro­gres­sively in­creased from ` 47 per TEU to ` 2,670 per TEU in 2014-15. Due to high roy­alty rate, the pro­ject be­came pro­gres­sively less re­mu­ner­a­tive to the op­er­a­tor and even threat­ened the vi­a­bil­ity of the pro­ject. It is only now, af­ter 18 years of op­er­a­tion, that JNPT pro­poses to mi­grate from roy­alty to rev­enue shar­ing mode. NSICT, owned by DP World, rep­re­sents In­dia’s first pri­vate con­tainer ter­mi­nal.

Mean­while, un­der the Na­tional Mar­itime De­velop-

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