MUMBAI: The country’s largest container handling port Jawaharlal Nehru Port Trust has signed an agreement to raise a dollar-denominated loan of $400 million, or about Rs 2,660 crore, at close to a tenth of prevailing domestic borrowing rates. This is the first dollar-denominated loan for JNPT that is also known as Nhava Sheva.
“The agreement was signed last night. The loan is raised at 2.36% rate compared to 12% which is the prevailing domestic rate,” shipping minister Nitin Gadkari told ET at the ongoing Maritime India Summit here on Friday. “This was my brainchild. ICICI BankBSE 5.40 % was lending at 12%. I said why? Raise dollar loans. Now viability of the project won’t be a problem,” the minister said.
Industry experts said this will lead to other major ports also taking the external commercial borrowing (ECB) route as this would work out cheaper despite the fact that the rupee has been falling against US dollar.
“This is a proof of concept which can be implemented by the ministry of shipping in six other major ports with surplus dollar revenues towards raising cheaper financing in dollar terms,” said Vinod Bahety, senior president for corporate finance at Yes Bank.
JNPT deputy chairman Neeraj Bansal said the port will raise $300 million from State Bank of IndiaBSE 2.16 % and the rest from DBS Bank. “DBS and SBI had both come up with very attractive rates with a few decimal points worth of difference. So we gave the mandate to both,” he told ET. JNPT handled 4.49 million TEUs (twenty foot equivalent units) of container cargo in 2015-16 and aims to scale this up to 10 million TEUs by 2020-21.
