Country’s largest container port Jawaharlal Nehru Port Trust (JNPT) reported a 20 per cent increase in its net surplus after tax for financial year 2016-17 at Rs 866.02 crore. Over the next few years, the port plans to utilise these surplus funds on various upcoming projects. However to maintain the cash flow, it has plans of revising port charges as well. JNPT’s Deputy chairman Neeraj Bansal speaks to Jescilia Karayamparambil about the port’s future plan.
Excerpts:
How much per cent growth is JNPT expecting in the next financial year?
In 2015-16, we saw a growth of 10 per cent. This financial year, we saw a growth of 7.5 per cent. We are looking at 8 per cent growth coming from our existing business for next financial year 2017-18. We are quite bullish about this growth. We are confident that next year our operating profit will cross Rs 1,000 crore (after tax), which would be an increase of 10 per cent.
How would recognition of Special Economic Zone (SEZ) help businesses?
It is not a revenue model. Primarily, it is about having synergies with ports. If this kind of industrial sectors comes in place, the logistics cost gets eliminated which will benefit the industry, because the cargo is moved within the port and for export they have to travel less area. In Maharashtra, there is no problem of skilled or non-skilled labour. You can get their service in abundance. You get access to technical labour as well. City/ location advantage is there and then there are other benefits. We are monetising our land for all these purposes. We will be earning money on this but it would be one-time receipt that will come up. This will not be a regular stream of revenue. The payment is upfront for the model that we are pursuing and then they will pay JNPT for the maintenance charges.
Are you planning of revising port charges?
We have to do something because cost is going up. After a stage, when we are having these kind of infrastructure projects we have to upscale revenue also. We cannot keep funding on the old reserves. That decision will be taken in 10-15 days.
It has to be approved by TAMP (Tariff Authority for Major Ports). It is a business decision to be taken by the port management. We have gone through a democratic process that we need to go through. We had a meeting with our shipping clients (main clients), and have taken into consideration their concerns on the raise. Our internal discussions are going on to decide the per cent of raise. But it will be as per the TAMP order, as the ceiling has been decided by TAMP.
As vessel-related charges are common for all terminals but this order is JNPT specific. Other two terminals are not bound by the container handling charges. We have to work out which charges have to be increased and how much. We will take a business discussion.
How much capital would JNPT require to support its upcoming projects?
I think we are sufficiently flushed with funds to fund our present projects. These payments will be made in a phased II manner which will be paid in next two year’s time. Today, JNPT’s fixed deposit is Rs 4,500 crore. Every year, we are making Rs 700-800 crore profit. As the projects are for two years, I would have additional Rs 600-700 crore. Additionally, the projects which JNPT is working on are around Rs 1,600 crore.
Would JNPT borrow or stick to using its surplus funds?
If need comes, we will raise money. It depends on the business decision if we need to raise money or fund from our own resources. It is a complex decision. But we are exploring the possibilities.
How is BOOM model picking up?
It is very fantastic and successful model, especially for JNPT. It has been a glorious success. It does have a teething problem which is an issue that happens in every business. PPP model is a great model as it helps expertise of international market to this place. Investment comes that way and we can leverage the skill that way.
