Mumbai: The Indian government is planning to raise INR124bn ($2bn) in overseas funding for the expansion of the state-run 12 major ports, as also to execute rail and road projects to connect them to the hinterland.
The Shipping Ministry is working on a proposal to approach foreign banks for extra commercial borrowings for expanding the dozen major ports. The plan will require the nod of the Finance Ministry and the Reserve Bank of India.
“The major ports have a combined dollar-denominated annual income of $400m, which can be leveraged and used as security to raise more and cheaper finance,” a senior Ministry official said. “It will be a hedging tool for our funds, as well.”
Most of the INR2.96 trillion investments envisaged in major and non-major ports by 2020 have to come from the private sector. However, public funds will be required for activities such as deepening of port channels and expansion of road and rail connectivity from ports to the land-locked areas.