| Date: |
09-01-2015 |
| Subject: |
Nitin Gadkari seeks finance ministry help to revive shipping industry |
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MUMBAI: The shipping ministry is talking with the finance ministry for help to restructure stressed shipping industry loans and tax exemptions to the debt-laden sector, Union Transport Minister Nitin Gadkari said on Thursday.
Indian shipping companies are still reeling from the global downturn in the sector started five years back. Overcapacity since then has hindered any meaningful recovery in freight rates. The worst-hit are shipbuilding companies like Bharati Shipyard and ABG Shipyard whose clients backed out of payments midway, leaving unfinished ships in Indian yards.
The shipping ministry's demand comes at a time when the government is getting ready to present the Union budget at end of next month. "I have proposed the finance ministry to talk to banks for more flexibility towards the sector," said Gadkari.
"The industry should get five years of moratorium period followed by 25 years of repayment period." Gadkari was speaking at the India Maritime 2015 conference, organised by the Federation of Indian Chambers of Commerce and Industry and the Ministry of Shipping.
Gadkari said the shipping industry that earns in dollars should take dollar loans, which will help them cut back on interest costs that are higher in India. The industry has long complained about numerous tax levies that make them uncompetitive in the market.
The shipping ministry is in the midst of finalising contours of a plan to implement its flagship Sagar Mala project. The project aims to integrate ports, industrial zones and hinterland. The primary focus is to provide inland connectivity for faster evacuation of cargo. Gadkari put forth the idea of setting up dry ports in Madhya Pradesh, Haryana and Punjab.
In a closed-door meeting before the event, the industry players asked Gadkari for investment, level playing field with government-owned ports, relaxation of tariff rules, corporatisation of government-owned ports and cabotage relaxation, sources said.
The main grouse the top executive present in the room had was against inflexible concession agreements signed between government-owned ports and private players. Adani Ports and SEZ, Jawaharlal Nehru Port Trust, APM Terminals and DP World raised the unviability of keeping up with outdated terms and conditions.
Source : economictimes.indiatimes.com
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