MUMBAI's Jawaharlal Nehru Port Trust (JNPT) plans to borrow US$400 million from DBS Bank and State Bank of India (SBI) to widen roads for faster container clearance, reports Live Mint of Delhi's Hindustani Times.
Doubling highway capacity from the existing four-lane to cater to the growing traffic is estimated to cost US$483 million.
While the highway project will be executed by the National Highways Authority of India (NHAI), the project will be funded entirely by JNPT.
The dollar loan plan is an initiative of the shipping ministry under which the 12 ports have been asked to explore external borrowing options, now available at competitive rates in the global market.
JNPT is looking to load over five million TEU, driven by further improvements in productivity and efficiency at its three existing container terminals and the opening of a new terminal in February.
JNPT handled 4.46 million TEU in the year ended March 2015, the highest since it was opened in 1989.
The newest port figures collected by IHS Media show JNPT, which accounts for nearly 60 per cent of India's total containerised ocean cargo, has handled 4.45 million TEU from April 2015 until April 22, 2016, edging up 0.7 per cent from 4.42 million TEU during the corresponding period the prior fiscal year.
That growth trend should allow India's busiest container handler to go past its last fiscal year's all-time throughput high of 4.47 million TEU.
There would have been slightly faster growth and higher cargo volume this fiscal year for the port if it hadn't faced intermittent slowdowns brought on by labour troubles and other infrastructure bottlenecks, especially on the landside.
With another container terminal under construction, the port's container loading capacity will more than double over the next seven years, putting a strain on the port's cargo evacuation infrastructure, necessitating the need to widen the road linking the port to eight lanes.
Repayment will come from port dues, berthage and pilotage fees paid by ships calling at a port, said the report. Vessel-related charges for foreign-going vessels are denominated in dollars but collected in rupees applying the prevailing exchange rate.
Whereas, cargo-related charges at ports such as wharfage, crane hire, storage, warehouse, demurrage and estate rentals are denominated and collected in rupees.
"We are seeking approval for collecting the vessel-related charges in dollars during the period when we have to repay these loans so that we can have a natural hedge against dollar fluctuations," a port spokesman said.