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ICRA: Capital support, finalisation of pending bills needed in port sector

May 2019
The BJP-led NDA government has won a landslide victory in the Lok Sabha elections 2019. The government is expected to step up its game and aggressively pursue various infrastructure projects in roads, power, airports, ports and railways sector, which can jump-start the slowing domestic economy. 

The turnaround time at ports has been reportedly reduced from 94 hours in FY14 to 64 hours in FY18 due to easing of norms, etc. Further, the dedicated freight corridor, likely to be operational within the next few years, is expected to improve railways logistics.

During the the government’s last tenure major policy initiatives were rolled out such as Sagar Mala, reforms on the tariff side for major ports, new model concession agreement (MCA) and several trade facilitation measures such as Direct Port Delivery model and simplification of customs procedures, which have helped the sector participants. 

According to K Ravichandran, Senior Vice President and Group Head-Corporate Ratings, ICRA, “The reelection of NDA will be credit positive for the domestic port sector, as they are expected to continue with their port-led developmental model, which will throw open several business opportunities for the incumbents. Going ahead, adequate budgetary support will be imperative to realise all the goals identified under the Sagar Mala programme. Moreover, finalisation of some of the long pending bills on the governing structure for the major ports will be critical to realise the potential in the sector.”

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