By March next year Sagarmala Development Company Ltd, an enterprise incorporated under the Ministry of Ports, Shipping and Waterways, to look after the formulation and development of projects under the Sagarmala Programme, will cease to exist in its current form and morph into a nonbanking financial company whose mandate would be to solely look after the financing needs of India’s ports and shipping sector.
According to a senior official, the approval from the government has been given and the registration process for Sagarmala Development Company to turn into a non-banking financial company has already commenced and the process is expected to be completed in six or seven months.
“The Sagarmala Programme-related project undertakings of the company will be hived off into a separate entity and the company will transform into a full-time NBFC on the similar lines as PFC (Power Finance Corporation), which undertakes dedicated financing for the power sector,” the official said.
The NBFC will function via borrowings from the market and then lend to the companies and entities engaged in the ports and shipping.
“It is not clear right now whether the upcoming NBFC can also benefit from the proposed Maritime Development Fund. The broad contours of the same are not yet final,” said the official.
For arranging long-term capital for the ports and shipping sector, the government under the Maritime Amrit Kaal Vision 2047, had envisaged the setting up a Maritime Development Fund as a mother fund along with the establishment of a sector-focused NBFC, Investment vehicle/Alternate Investment fund and Asset Reconstruction Company (ARC)/Distress Fund.
The Sagarmala Programme was launched in 2016. It aims to promote port-led development in the country by using its 7,500-km long coastline and about 21,000-km navigable inland waterways to reduce logistics costs.
As outlined in the Maritime Amrit Kaal Vision 2047, the government wants India to emerge as a global player in shipbuilding, repair and recycling as well as undertake port-led industrialization in the country. Over the decades the government has supported the shipping and ports sector through measures such as pricing policy and shipbuilding subsidy policy.