Ports may get Rs 1.8 lakh crore investment in 12th plan

New Delhi: The government is looking at an investment of over Rs 1,83,000 crore in ports in the 12th Five-Year Plan, most of which will come from the private sector, for a capacity addition of 1,440 million tonnes. According to the shipping ministry, the country's 13 major ports will require about Rs 77,000 crore to raise capacity by 527 million tonnes.

The requirement of minor ports is estimated atRs 1,04,808 crore for a capacity addition of 913 million tonnes. The investment plan, which is double the funds the sector received in the 11th Plan period, is likely to be approved by the Planning Commission in a few weeks, an official told ET. Of the envisaged investment in major ports, Rs 15,000 crore is likely to be generated through internal resources, Rs 6,294 crore through extra budgetary resources and Rs 4,338 crore through government funding.

The private sector is expected to pump inRs 51,000 crore. The capacity of Indian ports at the end of fiscal 2011-12 stood at 1,247 million tonnes, which is likely to go up to 2,686 million tonnes by 2017, the end of current Five-year Plan period. Experts say that if policy and clearance issues do not play spoilsport, as was the case in the first three years of the 11th Plan, the government will be on track to add 3.2 billion tonnes in capacity by 2020, a target set under its Maritime Agenda 2020.

"The proportion of investment in 10th Plan was only 50% of the target, as compared to 125% capacity addition. Given the delay in implementation of projects, capacity addition and investment is likely to be in the range of 70-80% of the target for next Plan," said Samir Kanabar, partner at Ernst and Young. Essar Ports, one of the biggest private players in the sector, plans to raise capacity by 70 million tonnes over the next two years with an investment of over Rs 4,000 crore.

"Government has to play a major role in materialisation of these planned investments, as its role will be more as a facilitator for formulating investment-friendly policies and in expediting process of clearances and approvals for port development," Essar Ports managing director Rajiv Agarwal said. He said that 80% of the funds required for capacity expansion in both major and minor ports is expected from the private sector.