Shipping Ministry In India Changes VGF Scheme To Increase Operational Expenditure
The Indian Shipping Ministry has determined that a potential of 340 million tons of cargo movement via coastal shipping is feasible each year and consequently has requested the Finance Ministry to consider adjusting the Viability Gap Funding (VGF) arrangement as a means to cover operational expenditure (OPEX).
An official noted that, at present, VGF is only offered for capital investments in projects such as metro and road construction, food grain silos, and transmission lines.
The Shipping Ministry is thus hoping for a revision of these regulations, given that companies such as the Shipping Corporation of India (SCI) that work along Indian coastlines may also require VGF aid.
Finance Minister Smt Nirmala Sitharaman indicated in her Budget address that PPPs with VGF financing would be implemented to boost coastal shipping about energy efficiency and cost-effectiveness for passengers and cargo transportation.
Once again, the method, which sees loaded trucks and rail wagons being transported to harbours just so commodities can be unloaded and loaded onto ships, necessitates opex assistance through VGF.
Source: India Shipping News, Economic Times