Psu Divestment To Hurt Transchart

The chartering wing of the ministry of surface transport, Transchart, may be heading towards redundancy as the government goes ahead with divestment in public sector undertakings (PSU). Transchart is responsible for making shipping arrangements for the central and state governments and for PSUs. Currently, PSUs in the central and state sectors have to go through Transchart for meeting their shipping requirements.

Imports are normally carried out on an f.o.b (free on board) basis and exports are carried out on a c.i.f (cost, insurance and freight) basis by government agencies and PSUs. Transchart levies a fee of 1 per cent on the value of the shipment as a service charge. Official sources said the guidelines for using Transchart services apply only to undertakings where the government holding is 50 per cent or above.

Accordingly, PSUs where the government holding is below 51 per cent need not necessarily use Transchart for meeting their shipping requirements. These undertakings are free to make their own shipping arrangements, they added. The sources said the trend by PSUs to make alternative arrangements might affect Transchart's incremental business. Currently, all imports of bulk goods like fertilisers, dry bulk goods and petroleum products like liquid petroleum gas are organised by Transchart.

Last year shipments of import and export cargo through Transchart were 244 lakh metric tonnes, of which 119 lakh tonnes was through foreign vessels.

The remaining shipments were carried out through private sector shipping companies chartered by Transchart on a time charter or on a voyage charter basis. In a time charter, the hire period is for a specified period of time at a predetermined tariff. In a voyage charter, the hire is valid only for only one voyage.

In the last budget, Union finance minister Yashwant Sinha had announced that the government's holding in all non-strategic PSUs would be brought below 51 per cent. Some state PSUs are also expected to adopt this policy.

The states with large shipping requirements include Punjab, Maharastra, Andhra Pradesh, Karnataka and Kerala.