Infrastructure Corporation of AP expresses inability to raise loans from banks

Amaravati: As the banks are not coming forward to sanction loans depending on government guarantee, it has become a difficult task to raise revenue to acquire lands for Machilipatnam port. To give loans, banks  insist on   mortgage of lands acquired from the people. 

The Infrastructure Corporation of AP (INCAP), which had been entrusted the task of raising a loan amount of Rs 1,092 crore in the past from the public sector banks or financial institutions towards land acquisition, rail connectivity and other developmental activities of Machilipatnam Deep Water Port and setting of Integrated Logistics and Manufacturing Zone (ILMZ) by Container Corporation of India (CONCOR) at Machilipatnam, has clearly reported to the state government recently that  the banks expressed their apprehensions about the capacity of the proposed borrower (INCAP) to repay the loan and expressed their inability to fund this project owing to certain reasons.

The state government approved the proposal of the CMD of INCAP in May through a G.O towards extending government guarantee for raising of loans for an amount of Rs 1092 crore  from the public sector banks or financial institutions towards land acquisition and other developmental activities of Machilipatnam Deep Water Port.

Director of Ports (AP) Koya Praveen told The Hans India that the banks initially had agreed  to sanction loans for land acquisition for Machilipatnam port based on mere guarantee from government. But  later they put several conditions. ``As the INCAP does not possess any legal rights on port lands, the government has to explore other ways to procure loans from banks,” he said.

Meanwhile, in a meeting held at Secretariat under chairmanship of Minister Kollu Ravindra a few days ago, the government has decided to entrust the responsibility of raising loans from financial institutes to the Machilipatnam Urban Development Authority (MUDA) as the MUDA  was entrusted the task of land acquisition for port.

A senior officer of Ports department said that it has been proposed to set up port in 4,800 acres, including 2,600 acres of government lands. ``As the government lands are with MUDA, it will be easier to it to secure loan from banks by mortgaging the lands. Due to this, the government asked the MUDA to take up the task of raising loans from banks for deep water port,” he said.

The MUDA also requested the government recently to issue necessary orders for transfer of all government lands specified, to the MUDA, pending finalisation of alienation for asset based development in generating the revenue for raising of the loans and to meet major capital investments.

The state government wants to lay foundation stone for the Machilipatnam port as soon as possible keeping early elections in mind   and instructed the officials to speed up the land acquisition process. Though the Chief Minister planned to lay foundation stone for the Machilipatnam port, it was not possible as the several villages opposed the proposed land acquisition.

The deep water port proposed to be developed in Machilipatnam has immense potential for regional development and overall socio-economic development of the region. State government entered into concession agreement with Machilipatnam Port Ltd on June 7, 2010 for development of Machilipatnam Deep Water Port at Gilakaladinne.