Key Details
The policy replaces the earlier captive-facility guidelines and applies to new facilities, unused port assets, capacity expansions and existing concessions seeking renewal.
Provision | New Framework |
|---|---|
Initial concession | Up to 30 years |
Renewal | Up to another 30 years, subject to performance and revised commercial terms |
Eligibility | Captive cargo requirement of at least 70% of designed capacity |
Minimum net worth | At least 30% of estimated project cost |
Minimum Guaranteed Cargo | At least 70% of designed capacity |
Third-party cargo | Normally capped at 30%, with temporary relaxation up to 40% |
Approval timeline | Concession agreement targeted within nine months of proposal submission |
Government bodies | Eligible entities may receive facilities at the reserve price without competitive bidding |
A Captive Port Facility is a berth, jetty, waterfront area or associated land developed primarily to handle cargo belonging to a particular port-dependent industry. Unlike a common-user terminal, its first purpose is to serve that industry, although the new policy allows limited use by other cargo owners.
Port-Dependent Industries Must Anchor Capacity in Captive Cargo
A Port-Dependent Industry (PDI) must demonstrate that captive cargo will account for at least 70% of the facility’s designed capacity. Eligibility will generally be based on the previous three years of cargo, including traffic proposed to be shifted from another port.
New businesses may qualify through independently assessed projections, while SEZs and Free Trade Warehousing Zones are also eligible.
Private PDIs will normally compete through bidding, with royalty per tonne or container determining the successful bidder above the port’s reserve price. Government entities in specified sectors may receive facilities at a market-linked reserve price without competitive bidding.
Renewals and Expansion Follow Performance Tests
Existing concessions may be renewed for up to 30 years without fresh bidding, subject to performance and compliance. The applicable payment will be the higher of the market-linked reserve price or the escalated existing payment.
Operators may seek additional capacity after maintaining at least 75% utilisation for three years. Expansion will ordinarily be competitively bid, but the existing concessionaire receives a Right of First Refusal to match the highest qualifying offer.
Cargo Commitments Protect Revenue While Allowing Spare Capacity
Projects must maintain Minimum Guaranteed Cargo of at least 70% of designed capacity, with royalty payable on the higher of actual or guaranteed cargo. Failure to meet the commitment for three consecutive years can constitute default.
Captive facilities may use up to 30% of capacity for other cargo, rising temporarily to 40% where the port lacks common-user capacity. Captive cargo retains priority and other users must receive non-discriminatory access.
Viability Shocks Can Trigger Limited Relief
A change in law or qualifying unforeseen event can trigger relief where it causes a 25%+ fall in Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA), 20%+ increase in capital expenditure or makes construction unviable.
A Conciliation and Settlement Committee may recommend measures such as changing permitted cargo or extending the concession by up to ten years. Direct financial compensation from the port authority is excluded.
Policy Relevance
Longer tenure can improve project viability. A possible 30-year renewal provides additional time to recover investment in specialised terminals and handling systems.
Utilisation safeguards protect scarce waterfront. Minimum cargo commitments and limited third-party access reduce the risk of valuable port capacity remaining idle.
Renewals trade competition for continuity. Non-tender renewal can prevent disruption to integrated industrial facilities, but reserve-price determination will be essential to protect public revenue.
Government allocations require strong disclosure. Publishing valuations, capacity assessments and reasons for priority decisions would strengthen confidence in the non-tender route.
Flexibility can preserve stranded facilities. Cargo changes and temporary third-party access may keep infrastructure productive when laws or markets change.
Port master plans remain critical. Expansion decisions must account for future common-user capacity, environmental limits and competing demands for waterfront land.
Follow the Full Policy Here: The Policy for Award of Waterfront and Associated Land to Port Dependent Industries in Major Ports (Captive Policy 2026)