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Gadkari says JNPT,SCI can raise Rs 1 tln in cheap foreign debt

Nitin Gadkari

Mumbai:  State-run firms Shipping Corporation, JNPT and Mumbai Port Trust can raise dollar- equivalent of Rs 1 lakh crore from overseas markets, Shipping Minister Nitin Gadkari has said.

“There is something special about the JNPT, Shipping Corporation of India and the Mumbai Port Trust. They have dollar-equivalent of Rs 4,000 crore revenue per year.

“The same dollar revenue can be used to raise up Rs 1 trillion worth of dollar funds in borrowings for up to 20-25 years at low interest rates,” Gadkari told an industry event here over the weekend.

According to government data, the annual fund inflows through external commercial borrowings (ECB), which refers to commercial loans in foreign currencies, is around USD 30 billion.

Companies use this mechanism to raise low cost funds from abroad.

Corporates which regularly tap the foreign market to raise debt claim almost 6 percentage points gain on the interest front alone vis-à-vis rupee funds.

The minister said the money raised through this route will result in huge savings on interest outgoes, and can be utilised for long-term finance needs in the sector like works on inland waterways, port development and ship building.

The minister cited an experience with regard to widening of a road project by the country’s largest container port JNPT, where the ministry has opted for an ECB money which comes at 2.5-3 per cent per annum as against a high 12 per cent quoted by a domestic private sector lender.

The switch to ECB “will change the economic viability of the road”, Gadkari said, underscoring the need to raise money from such an avenue.

The minister added that he will be on a five-day trip to Japan next month, where various proposals regarding infrastructure financing are expected to be discussed.

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