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  • DAILY CURRENT AFFAIRS:Jawaharlal Nehru Port becomes first 100% Landlord Major Port of India

Jawaharlal Nehru Port becomes first 100% Landlord Major Port of India

Tags: Economy/Finance

Jawaharlal Nehru Port (JNP), Mumbai has become the first major port of the country to become a 100% Landlord port having all its berths being operated on public private partnership (PPP) model.

JNP is one of the leading container ports of the country and is ranked 26th among the top 100 global ports (as per Lloyd's List Top 100 Ports 2021 Report).

Currently, five container terminals are operated at JNP, of which only one is port owned.

Presently Jawaharlal Nehru Port Container Terminal (JNPCT) has the capability to handle   9000 TEUs (twenty-foot equivalent units) capacity vessels and it plans to increase it to 12200 TEU capacity vessels.

Investment for this new project will be carried out by the concessionaire at a total cost of Rs. 872 crores. The concessionaire has to upgrade, operate, maintain and transfer this terminal on PPP basis. This project will be implemented in 2 phases.

Public Private Partnership (PPP) 

It is a model of infrastructure development where the government through the public sector and the private sector collaborate to develop a project like highways, airports, railroads, bridges, and tunnels or services which were traditionally provided by the public sector.

The advantage of a PPP is that the management skills and financial acumen of private businesses could create better value for money for taxpayers when proper cooperative arrangements between the public and private sectors are used.

Concessioning and Concessionaire 

In the PPP model there are two parties; concessioning authority and concessionaire.

Here concessioning authority is normally the government or government owned Public Sector Company or authority.   

A concessionaire is the private sector which is developing or operating the project under the PPP model.

Some of the models of PPP are as follows 

Build Operate Transfer (BOT)

In this model the private sector develops the project and keeps it for a certain time period (usually 10 years or more). After the completion of the period the private sector transfers back the project to the government. 

Build Operate Own (BOO):  It is similar to the BOT but here the private sector does not transfer the project back to the government. The same as a BOT, but the private entity is not required to ever transfer the project to the government.

Design-Build-Operate (DBO) 

In the Design-Build-Operate project the public sector owns and finances the construction of new assets. The private sector designs, builds and operates the assets to meet certain agreed outputs.

Buy Build Operate (BBO): 

It is a type of privatisation of public sector assets. Here the government sells a pre-existing project that has already been completed and may have been operated by the government for some time to a private party, who will take it over fully. The private party may need to invest in rehabilitating or expanding the project.

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