Parliament Gives Approval For Port Privatisation

Parliament yesterday approved amendments to the Major Port Trusts Act 1963 to enable major ports to enter into joint ventures with the minor ports. With the amendments, major ports will also be able to ink joint ventures with foreign ports and domestic or foreign companies.

In case of joint ventures with domestic or foreign companies, tender route will be followed.

A senior ministry of surface transport official told Business Standard that in any joint venture a major port will hold a minimum of 26 per cent equity to block any special resolution.

The joint ventures with foreign ports and domestic or foreign companies will enable major ports to access better technology and have operational freedom, and increase traffic handling capacity.

 

A tieup between a major port and foreign port will be through government-to-government agreement and equity participation will be decided by mutual discussion, the official said. However, in case a foreign port is functioning under a company, the tender route will be followed, he added.

With JVs with major ports, minor ports can be developed with enhanced traffic-handling capacity. The traffic handled by major ports can be diverted to the minor ports as the former have hit the saturation level. The Major Port Trust Bill was passed by the Lok Sabha yesterday. It was earlier cleared by the Rajya Sabha.

THE PROVISIONS

* Enables major ports to enter into JVs with the minor ports, foreign ports and domestic or foreign companies

* Major ports to hold a minimum 26% equity to block any special resolution

* Tieup between a major port and foreign port will be through government-to-government agreement

* Equity participation will be decided by mutual discussions