Centre to pick 10-15% in port upgrade projects

The Union government is planning to pick up a stake of 10 to 15 per cent in projects across the country for upgradation and expansion of ports as part of the ambitious Rs 100,000 crore (Rs 1 trillion) Sagar Mala project announced by Prime Minister A B Vajpayee on Independence Day.

The government is also looking at picking a up a stake of about 20 to 25 per cent in the port linkage projects.

"Things are at a nascent stage and are still being worked out. The thinking is however along these lines," Union Minister for Shipping Shatrughan Sinha said.

He was speaking to newsmen on the sidelines of a function organised by the Shipping Corporation of India to give away the fleet safety awards to its employees.

The Sagar Mala project envisages expansion and upgradation of existing ports, setting up of new ports, and connecting all major ports with the Golden Quadrilateral, and the north-south and east-west road corridors.

The project is to be implemented in the next 8 to 10 years and the first stage entailing a Rs 7,500 crore (Rs 75 billion) plan for modernization and expansion of Kochi and Jawaharlal Nehru Ports is likely to be kicked off in March, 2004.

The government had already made an allocation of Rs 7,500 crore (Rs 75 billion) in the Union Budget for 2003-04 for two ports , Sinha pointed out. These will now be brought under the ambit of the Sagar Mala scheme.

Earlier, while speaking at the awards function Sinha strongly hinted at the introduction of a tonnage tax regime, for which the shipping industry has been clamouring for.

"Next time I am here, I hope to give you some strong, very positive and sound news on the tonnage tax front," he said.

The Indian shipping industry through its representative body the Indian National Shipowners Association has been demanding the introduction of tonnage tax arguing that this will enable it to compete better with global shipping lines.

The industry at present pays corporate tax at about 35 to 37 per cent levels. The migration to a tonnage tax -which is computed on the basis of notional earnings_will result in a tax outgo of only zero to 5 per cent. About 80 per cent of the world fleet is under this regime.