JNPT, Ennore Port, DCI get nod to raise Rs 3,500 crore via bonds

The Finance Ministry has given its nod to three Shipping Ministry-controlled entities - JNPT, Dredging Corporation of India (DCI) and Ennore Port – to collectively raise Rs 3,500 crore from tax-free bonds.

"For the first time, the Finance Ministry has approved selling bonds by our organisations," Shipping Secretary P K Sinha told reporters at the 14th Maritime States Development Council meeting. All these three entities will be hitting the market either in February or March, he added.

The Jawaharlal Nehru Port Trust (JNPT), the country's largest container port, will be raising Rs 2,000 crore for its expansion plan, while DCI will net Rs 500 crore to purchase a dredger. Ennore Port will raise Rs 1,000 crore for its expansion activities, Mr Sinha said.

In the FY’12 budget, the Finance Ministry had said the Shipping Ministry could raise up to Rs 5,000 crore in bonds but bad market conditions forced them to defer the plans.

A senior official from JNPT said the port will be using the money for its land reclamation activities for the upcoming fourth terminal.

Meanwhile, the Shipping Secretary announced that the JNPT's much-delayed fourth terminal will now be bifurcated and work will be carried out simultaneously by two players.

The fourth terminal, originally awarded to a consortium comprising the Port of Singapore and ABG Infra, has been stuck after the successful bidders developed differences over project execution.

The JNPT forfeited a bank guarantee of Rs 67 crore, but a senior port official today said it is too small considering the loss of time on the project.

Mr Sinha said the Port of Singapore and ABG have not been blacklisted and will be allowed to re-bid for the project, if they so desired.

The newly conceived bifurcated project will result in curbing costs (efforts are on to contain it at Rs 8,000 crore) and also increase the capacity (to up to 5.2 million TEUs), the senior JNPT official said.

It was originally planned as a Rs 6,700-crore project, which will add up to 4.6 million TEUs to the port.