New Delhi, Jan 5 (IANS): The state-run ports sector needs to be overhauled and moved towards privatisation, Finance Minister Arun Jaitley said on Tuesday.

"The structure of state sector ports needs a rethink, moving towards privatisation of state-run trust ports," Jaitley said at an event jointly organised by India Infrastructure Finance Company and industry chamber FICCI here.

"If major ports don't overhaul their structures, they will seriously fall behind in competition with minor ports," the minister said.

Noting that policy changes in civil aviation sector had allowed for major improvement of small- and medium-sized airports in the country, he said the private sector had shown interest in development of ports too.

He said the National Investment and Infrastructure Fund (NIIF) was already in place, and it was in touch with many sovereign and pension funds that had shown interest in investing in the sector.

Following the first meeting of the NIIF here last week, Jaitley, who heads the NIIF Governing Council, told reporters that the progress with regard to the proposals of sovereign funds from the United Arab Emirates, Britain, Russia and Singapore were particularly discussed.

While the government will contribute Rs.20,000 crore to the fund, another Rs.20,000 crore is expected to come from private investors.

The union cabinet in July approved the creation of the NIIF with a corpus of Rs.20,000 crore for development of infrastructure projects, including the stalled ones.