New Laws Likely To Facilitate Ports Corporatisation

The surface transport ministry will introduce legal amendments or new laws to facilitate corporatisation of ports, ensuring a smooth transformation of port trusts into companies.

Director of ministry of shipping and transport (operations) Kamlesh Kumar said corporatisation of major ports was aimed at providing independent decision-making, promoting investments, speedy execution of projects and professionalising management.

For this, the viability of each port had to be studied and the Major Port Trusts Act, 1963 needed to be amended, Kumar said.

Kumar said private sector participation in ports would be carried out under a build-operate-transfer scheme with a concession period of 30 years.

 

Kumar ruled out total private funding and laid stress on a mix of public-private funding. The development should be regulated in nature with the infrastructure being supported by the public sector and cargo handling and commercial service by private.

This is necessary as the assets of the port trusts are being transferred to newly-formed corporates, ministry officials told Business Standard at the sidelines of a seminar on `Financing and Restructuring of Airports and Seaports' organised by the ministry of finance.

Speaking on the occasion, chairman of the Tariff Authority for Major Ports S Sathyam said it was necessary to regulate ports and private terminals to ensure a fair competition.

He further said the three-year tariff cycle for ports has been already brought down to two years but needed to go down further.

For fixing tariff, the marginal cost pricing method would be preferred though it was not very practical, Sathyam said Ex-director of port development D Sirkar said there was an urgent need to enhance the productivity of port workers, with one in every four workers being in surplus.

There are 90,000 workers employed in the 11 major ports of India, out of which 40 per cent are cargo handling workers.

The total traffic in major ports is expected to increase from 271.30 million tonne in 1999-2000 to 424 million tonne in 2001-02 and to 1,273.2 million tonne by 2019-20.