Centre is looking to hedge Rs 1 lakh crore for the port sector : Nitin Gadkari - RNews1 Network

Centre is looking to hedge Rs 1 lakh crore for the port sector : Nitin Gadkari

Nitin Gadkari, Port development,  Port-sector,  hedging risks,  Ministry of Shipping,  state-run Shipping Corporation of India, Union minister of Road Transport and Highways
Mumbai : The Union minister of Road Transport and Highways of India Nitin Gadkari who also serves for Shipping and Ports, on Sunday said that, Centre is looking at hedging risks as it is planning to raise Rs 1 lakh crore in dollars for the port sector.

While speaking at an industry meet in Mumbai the minister said that, "I am unable to solve one problem, how to do hedging for this money?" He further added, "hedging is necessary as if anything goes wrong in the future, he will be blamed". He also added that there are multiple solutions on the table, without specifying them.

The minister had last month announced the plan to raise money in American currency, against the dollar receivables of the country's largest container port JNPT and the state-run Shipping Corporation of India, which run up to Rs 5,000 crore per year.

At this event, Gadkari said money of up to Rs 1 lakh crore can be raised for 15 years against these receivables.

The money raised will be used for developmental works in the ports and shipping sector, he said, elaborating on the savings in interest.

While raising the finance for a Rs 4,000 crore road widening project, JNPT was mulling to raise money domestically for which it would have had to pay an interest of up to 12 percent.

The minister said he suggested dollarisation as an alternative and called up ICICI Bank's managing director and chief executive Chanda Kochhar, and convinced her to charge a lower rate of Libor plus 0.5 percent. This comes to 3-3.5 percent, which is a lot lower than the 12 percent rupee funding alternative.



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