Corporatisation will bring Mumbai Port in line with top real estate firms.

Q: Is it right that Corporatisation of ports will offer immense elasticity in terms of fund-raising and expansion???

Devika, Mumbai

3rd March 2015

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Replies (10)

Right Bikram,
Roti, Kapda and Makan are the three basic needs of the people moves to Mumbai. You provide them Makan, they will arrange the rest of the two. He may not have resources to invest in property and he is not sure about how long he is going to stay in the city.

Pallav Singh, Faridabad

24th May 2015

Comment

It is matter of government and as the Mumbai port's luck washed out, its land came under the highlight. There were many plans hanging around for real estate development. This consists of rented accommodation and affordable housing. Thanks to the state govt. for this efforts. We can hope for the best.

Arushisha, Mumbai

24th May 2015

Comment

Well Arushisha,
Opening up large portions of land in Mumbai also has political effects and Mr. Gadkari is aware of that. He has said at many public forums that not a single inch of the 1000 acres of land will be given to private builders and it will be used to build roads, railway corridors and public parks.

Bikram, Mumbai

24th May 2015

Right BIkram,
We have already seen the result last year in June when the Port Trust proposed a real estate development plan for all of its land in a bid to get back its luck and proposed to give 1000 acres of land for the city's development and submitted the plan to the minister but still pending.

Arushisha, Mumbai

24th May 2015

@Arushisha,
Government should first make public what affordable housing means in terms of size, price and location. Then only we can say government seems to have the right purposet because The first need of any person who steps to Mumbai or any other metro from villages and small towns is a rented accommodation.

Bikram, Mumbai

24th May 2015

Hey Devika & Roshini,
Good news for Mumbaikers as the city's hunt for more land to decongest and expand has got support from the centre as Union shipping minister Nitin Gadkari promising to hand over 350 acres of land owned by the Mumbai Port Trust to the state government.

Bikram, Mumbai

24th May 2015

Comment

Ohh really,
That's great move by the Centre. I read that they submitted a proposal to release some part of Mumbai port's land to construct rented accommodation and also affordable housing. And if the land transferred, it would be the 2nd largest transfer for land-deprived Mumbai.

Shalini Parikh, Mumbai

24th May 2015

Right Shalini,
Earlier in 1990, nearly 600 acres of mill land was placed for real estate development. As we all know that land has been one of the biggest difficulties for Maharashtra, India's most urbanized state, which is having difficulties to find ways to provide affordable housing and improve the quality of life for its city inhabitants.

Bikram, Mumbai

24th May 2015

As per the report, Mumbai Port Trust has 1800 acres of land in south and south-central Mumbai along the eastern seafront. But steps to generate income from the land have often been stuck in paperwork for various approvals, and disputes. The port currently earns only Rs.200 crore from its large area of land.

Shalini Parikh, Mumbai

24th May 2015

@Shalini,
There are other difficulties as well. We are not sure that how much land can be actually used as a large part of Mumbai port land is covered by coastal regulatory zone, so we don't know whether they will get permission from environment ministry or not.

Bikram, Mumbai

24th May 2015

@Shalini,
At the same time raising funds from the market also becomes easier under the Companies Act.
Compared to other government-run ports, the average turnaround time at Kamarajar Port has also been the lowest and consistent at 0.09 days for the past two successive years. This indicates the corporate model is auguring well for the Tamil Nadu-based port. Going ahead, these ports can also look to get listed and raise funds via equity.

Abhinandan Jain, Bangalore

5th March 2015

Comment

Hi Abhinand,
But according to shipping ministry data, in 2013-14, the cargo volume share of India's 12 major ports dropped to 55% from 72% in 2007-08. Being a port under corporate structure is certainly a successful model as the board has not just more powers when it comes to making decisions, but the board members are professionals in their section of work, which is not always the case at the public-sector port trusts.

Shalini Parikh, Mumbai

5th March 2015

Comment

@Shalini,
As per the current news, ports will be able to approach commercial banks for fund-raising and can also explore merger and acquisition options for expansion, which is not possible under the current port trust structure.

The port trust will also be replaced by a board of executives, which will make the entities more autonomous and efficient.

Abhinandan Jain, Bangalore

4th March 2015

Comment

But for me corporatisation seems the best suited option for the government-run ports at the moment, which can solve several issues in one go. Apart from assets getting valued, corporatisation of these ports will also offer immense flexibility in terms of fund-raising and expansion.

Shalini Parikh, Mumbai

4th March 2015

Comment

@Arushisha,
Currently, of the 12 government-run ports, Tamil Nadu-based Kamarajar Port, earlier known as Ennore Port, is the only one with a corporate structure, while the remaining continue to be under the Major Port Trusts Act, 1963.

Roshni Pawal, Mumbai

3rd March 2015

Comment

Right Devika,
In a bid to provide the much-needed boost to India's port sector, finance minister Arun Jaitley had said in the Union Budget 2015-16 that the government would encourage major port trusts to become companies under the Companies Act, in turn paving the way for the entities to become self governing.

Roshni Pawal, Mumbai

3rd March 2015

Comment

It is also heard that about half the total land at Mumbai port is being used for operational purposes and so even if this much portion of the asset gets valued (upon corporatisation), it will be a very substantial amount.

The value of land around Mumbai Port would be about Rs 60-70 crore/acre as a conservative rate, this is if the land is in the government circle, while private land would be about Rs 100 crore/acre.

Arushisha, Mumbai

3rd March 2015

Hi,
The corporatisation of government-run ports might seem an attempt to professionalise the companies to be better equipped to handle the rising cargo. However, the Budget fine print shows a complete transformation for some of these ports, which have so far been looked at as more trading centres for India.

Roshni Pawal, Mumbai

3rd March 2015

Comment

I heard that news. Once under the Companies Act, Mumbai Port for instance, will have its assets valued, making it a company holding one of the costliest real estate assets in the country.

With around 1800 acres of land stretching from Chhatrapati Shivaji Terminus to Wadala, Mumbai Port will have the possible to be valued in line with some of India's top real estate companies such as DLF, Jaypee Infratech, and Oberoi Realty, among others.

Devika, Mumbai

3rd March 2015