New Delhi: The Indian government has rejected the country's largest container port Jawaharlal Nehru Port Trust's (JNPT) proposal to garner Rs 15 billion via infrastructure tax-free bonds in the current financial year 2011-12, to finance the first phase of dredging at the port, saying it has enough reserves for the propose.
In August, the port had said that it would raise the fund through infrastructure bonds this year to develop dredging projects.
The port now plans to resort to borrowings via loans at higher interest rates to finance the project.
"The project will go as scheduled. We will now go for a massive borrowing and finance a deal," Chiraman L Radhakrishnan said on the sidelines of the Confederation of Indian Industry's (CII) logistics summit.
The port trust has "substantial cash reserves", but it will utilize the money to finance land acquisition for a fourth terminal at Mumbai, he added.
"We had kept the reserves for the acquisition of land. We cannot raise money from outside only for the acquisition of land," Radhakrishnan said.
However, the shipping ministry stated that it is still in discussion with the Finance Ministry over the bond issue.
"The Finance Ministry had rejected the bond issue, citing adequate reserves with the port trust. But we are still pushing for the issue of bonds," Secretary of Ministry of Shipping K Mohandas said.
In the Union Budget in March, the Indian government had allowed the issue of Rs 50 billion tax-free infrastructure bonds in the current financial year 2011-12 for the port sector.
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