The financial assistance will support maintenance dredging along the Hooghly River, including the 232-km navigational channel leading to the Kolkata Dock System (KDS) and the 125-km stretch serving Haldia Dock Complex (HDC). Persistent siltation makes extensive dredging essential to maintain navigable depths and ensure safe vessel movement.    The Centre has supported SMPA’s dredging costs since 1968-69, but the subsidy was progressively reduced from 100% to 61% between FY2013 and FY2024. Under a Public Investment Board-approved plan, financial assistance will continue until FY2030-31, with the Centre’s contribution declining from 58% in FY2024-25 to 40% in FY2030-31. Thereafter, the port will have to fund dredging entirely from its internal resources.    From FY2026-27, subsidy disbursement will be linked to annual performance targets, including cargo handling by public-private partnership (PPP) operators, berth mechanisation, traffic growth and net surplus before tax excluding dredging subsidy. SMPA has stated that it achieved the prescribed annual targets for FY2025-26.    The subsidy is crucial for sustaining the operations of India’s only riverine major port, which serves eastern and northeastern India, as well as landlocked Nepal and Bhutan, and supports key industrial and energy facilities at Haldia.

The Centre has also directed SMPA to expand PPP operations, monetise vacant land, address encroachments and optimise manpower to improve efficiency and achieve long-term financial self-sustainability.