Leasehold land in townships of major ports may soon be freed. Though about 7,000 acres would be eligible for conversion to freehold, properties on Mumbai Port land such as Tatas' Taj Mahal hotel would not be able to take benefit of a new government policy being planned for port real estate.

Shipping ministry is soon planning to move a Cabinet note for converting the 99 year old leases in Gandhidham, near Kandla Port to free hold, but because of a Supreme Court order for leasing of Mumbai Port land no such policy can be applied to over 300 properties waiting for lease renewal.

"Lease agreements in Gandhidham are almost 100 years old. The land was given to refugees who came from Sindh. Now following the example of cities like Chandigarh and Delhi, they can pay a final amount and convert into free hold ownership," a senior shipping ministry official said. The Cabinet nod to the new guidelines has kept nearly 10,000 acre of land out of the purview of the policy since it falls in township areas.

The Union Shipping ministry has also sought the law ministry opinion on the Supreme Court order of 2006 regarding the lease renewal of commercial and residential properties owned by Mumbai Port Trust.

The apex court while opposing Mumbai Port's decision to revise the rentals based on current market prices had suggested a formula to gradually increase rents since most of these leases were as old as 99 years.

"Since there is an order from SC in Mumbai Port Trust matter, we cannot take any independent decision for renewal of leases. This issue will be dealt with separate from the rest of the ports," the senior official added.

As per shipping ministry, the deadline for sticking to SC's formula ended in 2012 and thereafter market rate based rent could be charged, but the competing parties have argued that the SC guideline is applicable till 2024. Shipping ministry is expecting some clarity on this matter from the law ministry to decide its next course of action by next month.

Major ports own 2.65 lakh acre of land of which 2.2 lakh acre belongs to Kandla Port alone. However around 1.98 lakh acre of this land is submerged and unusable. Government's effort to use this land for salt cultivation has also not borne any result.

The government on Thursday approved policy guidelines for 265,000 acres of land belonging to the 12 major ports, paving the way for monetising the plots. The licensing and leasing of these lands would be based on the new guidelines. The tariff authority of major ports would do the valuation of the land after consulting the stakeholders. The rates would be revised in line with market rates.

Port trusts expect the policy to make way for improving storage facilities for dry cargo and liquid cargo. Also, such activities can now be taken up by stevedores and users. In the absence of such guidelines, port trusts were not able to lease land to private players for any such purpose.