Guidelines for works that allow ports to extend leases beyond 30 years

The Center is preparing a policy that will allow port terminal contracts to be extended beyond the 30-year lease term under certain conditions.

“The policy applies to major ports and allows them to offer lease extensions to existing terminal operators under certain conditions,” said a senior Shipping Ministry official.

The country’s main ports are under the administration of the Ministry of Ports, Shipping and Waterways

There are currently no rules allowing an extension of these agreements signed in the late 1990s and early 2000s. This has become a sore point for port terminal operators who want reassurance that they can keep their assets for a longer period of time.

“As investors in the Indian port sector, companies are strongly committed to a consistent and stable policy on port concessions,” said officials from a private port terminal operator whose lease expires in a decade.

Port stakeholders say further investment in capacity expansion could stall if there is no clarity on the contract renewal scheme. “Because these are large investments, the private sector wants transparency over time to know if the amount spent can be recovered,” said officials from another private sector port actor.

“Existing terminal operators want first refusal and priority on bids,” said a Shipping Department official, noting concerns about flawed actors who could manipulate bids to crowd out legitimate port operators also need to be addressed.

“The policy will be finalized soon,” the official quoted earlier said.

Related Articles

Back to top button