Indian Ports to Set Sail on Corporatization

 

In an attempt to professionalize Indian ports, which have been reeling under infrastructure bottlenecks, leading to massive delays in cargo movement, the government will encourage the 12 major ports run by the government to get corporatized.  

 

“Ports in the public sector need to both attract such investment as well as leverage the huge land resources lying unused with them. To enable us to do so, ports in public sector will be encouraged to corporatize and become companies under the Companies Act,” the Minister said.

 

He said the exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port is being withdrawn. India has 12 major ports - Kandla, Mumbai, JNPT (Jawaharlal Nehru Port Trust), Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar (formerly Tuticorin Port), Visakhapatnam, Paradip and Kolkata (including Haldia) which handle approximately 61 percent of the country's total cargo traffic.

 

The announcement to corporatize major ports has evoked mixed reaction with the managements welcoming it and trade unions apprehending loss of jobs under alibi of rightsizing and downsizing.

 

It will certainly lead to increase in efficiency parameters as the process of involving BOT players under PPP mode in a big way is in advance stage of implementation, says government officials.

 

But, terming the Minister's budget proposal to corporatize major ports as an "enabling provision" to privatize them, port workers unions said they will go ahead with the planned indefinite strike from March 9 to protest the move. 

 

"This is an enabling provision for privatizing the ports... We had anyways given a call for an indefinite strike from March 9 and will go ahead with it in a strong way," All-India Ports & Docks Workers Association secretary Uday Choudhary said.

 

While this is a necessary first step to help Indian major-ports reach global standards, the government needs to work on areas like acquisition and creation of land banks to allow faster development of port-based industries.

 

Incidentally, the State government had been toying with the idea of developing minor ports by private players. Minister for Ports Baburao Chinchansur had said that private players evinced interest to develop four of the 12 minor ports in the State.

 

India has 13 major ports and about 200 non-major ports. Cargo traffic, which was 976 million metric tonnes (MMT) in 2012 is expected to reach 1,758 MMT by 2017. The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce. India currently ranks 16th among maritime countries, with a coastline of about 7,517 km. Around 95 per cent of India's trade by volume and 70 per cent by value takes place through maritime transport, according to the Ministry of Shipping.