FPJ Exclusive: Mumbai Port’s privatisation plan sails, ₹150 crore investment required

FPJ Exclusive: Mumbai Port’s privatisation plan sails, ₹150 crore investment required

The Union government and the MbPA want to “upgrade” a few berths at the port for which the four berths – 18-ID to 21-ID – of the Indira Dock will be handled by the private operator.

Ateeq ShaikhUpdated: Thursday, March 16, 2023, 10:36 PM IST
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Mumbai Port Authority - Representative Image | File

The Mumbai Port Authority (MbPA), formerly known as the Mumbai Port Trust, is looking at giving out a portion of the Mumbai Port to a private player for the next 30 years. The area up on the block handles over 40% of Mumbai Port’s cargo.

The Union government and the MbPA want to “upgrade” a few berths at the port for which the four berths – 18-ID to 21-ID – of the Indira Dock will be handled by the private operator. The four berths are also known as ‘harbour wall berths’. Other than 640 metres of four berths, an open storage area spread over 23,700 sqm and three covered storage sheds of 15,300 sqm will also be handed over.

A global request for proposal has been floated by the MbPA for “upgradation, equipping, operation and maintenance” of harbour wall berths at the Indira Dock on a public-private partnership basis.

The private port operator will have to strengthen the jetty, refurbish the storage sheds and upgrade the cargo handling equipment as well as facilities.

₹150 crore investment required at Mumbai Port

In lieu of this, the concessionaire will get the rights to earn revenue for three decades. Approximately ₹150 crore will have to be invested, including the upfront payment of ₹19.45 crore to be paid to the MbPA.

For the operator, the sources of revenue would include from handling cargo, storage facilities, and ancillary facilitation charges. From these revenue streams, a royalty will have to be paid to the MbPA based on per metric ton cargo handled by the concessionaire. The rights will be awarded to the private port operator who will quote the highest royal amount.

Commodities like iron, steel coils, pulses, vehicles, calcite chips, sugar are handled from harbour wall berths. Iron and steel comprises about 65-70% of the total cargo handled here. At present, the MbPA does not have any dedicated equipment installed so the cargo is being handled through geared vessels; shipping agents deploy mobile cranes as per requirement.

Large-scale cargo movement at Port

Between April and November 2022, of the 3.32 metric tonnes of cargo at the Mumbai Port, 1.34 metric tonnes was handled from these four berths, making it 40.36% of the overall handling. In 2021-22, 37.88% of cargo was handled here. In the next 30 years, the projection is that 3.50 metric tonnes of cargo will be handled from these berths alone.

According to port officials, the need to upgrade the berths has arisen as they are over a century old and were constructed between 1904 and 1914. The harbour wall berths are 852 metres in length, but only 640 metres will be handed over for privatisation as the balance 212 metres is on lease with the Indian Coast Guard since 2014 for a duration of 30 years.

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