Govt allows major ports to lease and license surplus land

The union government has announced new policy guidelines, which allow major ports in the country to leverage their land resources for commercial advantage, including leasing and licensing of port land.

Addressing the 'Ports in India' annual conference in Mumbai, shipping secretary Vishwapati Trivedi said the new guidelines provide necessary regulatory framework for land allotment by major ports.

He, however, said these guidelines have been drawn to help the ports to carry out leasing and licensing of port land in a transparent manner and for this, the guidelines provide for reduced discretionary powers.

The shipping ministry has prescribed tender-cum-auction as the most preferred method of allotment of port land, he added.

Major ports in India have between them over a lakh hectares (2.64 lakh acres) of land. He said the ports have not so far made optimum utilisation of land in their possession and the land utilisation has often yielded lesser returns.

The thrust of the new policy has been on linking the value of land with prevailing market rates, he said.

Under the new policy guidelines, land can be allotted only through licensing in custom bond areas by inviting competitive bidding, while land outside the custom bond areas can be leased through tender-cum-auction. There is also a provision to license land outside custom bond areas, but it should be only for port related activities.

The boards of respective ports can approve leasing of land for a period up to 30 years. For leasing of land beyond 30 years and up to 99 years, approval of the government has to be obtained through the mechanism of empowered committee.

All the 12 major ports of the country are required to draw land use plan covering all land owned or managed by them. The new guidelines are applicable to all major ports in India except for the land relating to township areas in Mumbai, Kolkata and Kandla, Trivedi said.

The new policy guidelines for land management are part of the ongoing process of port reforms and liberalisation.

While major ports, owned by the centre, operate in a comparatively more regulated environment, the smaller ports, comprising state ports and private ports enjoy substantial degree of flexibility. The government has been working towards creating a level playing field for major and non-major ports.

Earlier, in 2013, as a part of reform process, the government had liberalised tariff setting for the ports sector and allowed indexing port tariffs to inflation. The government had also prescribed minimum efficiency standards for cargo terminals.

The 12 major ports in India that include Kandla, Mumbai, JNPT, Marmugao, New Managlore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) handle approximately 61 per cent of cargo traffic. The government proposes to further augment port capacity in the major ports sector.

During 2013-14 it is planned to augment port capacity by 220 mtpa through 30 port projects. Out of these 20 port projects, with a capacity of approximately 100 mtpa have already been approved.

The remaining port projects, including the ambitious Rs8,000 crore JNPT Terminal-4, are likely to be approved during the fourth quarter of the current fiscal, Trivedi said.