Govt May Allow Coys to Set Up Captive Cargo Handling Berths

The government may allow private companies to set up captive cargo handling berths at the existing 12 major ports in the country. The move will benefit steel, mining, oil and cement companies such as Tata Steel, Sesa Goa, Ispat Industries, JSW and Essar group which extensively use port facilities for importing raw materials and exporting finished products.

"A policy allowing captive berthing facilities is being finalized by ministry of shipping and port. It will help in attracting private investments in the port sector," an official in the ministry of shipping, road transport and highways said. The existing policy does not allow private firms to have captive berths. This facility is extended only to government-owned companies. Private firms can only participate in port development projects under the public-private-partnership (PPP) route and avail preferential berth allocation by paying a hiring charge.

The new policy will allow the port authority to invite applications from companies interested in developing and availing captive berths, jetties, platforms or other infrastructure. Under the policy, captive berth will be given on the basis of minimum guaranteed cargo and after payment of royalty on per tonne basis, the official, who didn’t wish to be named.

Companies will also have to pay marine charges to the port authority for using some common port infrastructure. The usual concession period for this facility is expected to be for 30 years with annual revision in royalty payments.
While the captive berth will be exclusive used by its operator, companies would also be given the freedom to offer the infrastructure for use by a third party after getting permission from the authority. In this case, the operator will have to pay certain charges to the port authority.