You are here: Home » Budget » Reactions » Industry
Business Standard

JNPT indicates it will be first to get corporatised

Official says certain legislative changes will also be required for ports to get corporatised

Press Trust of India  |  Mumbai 

Largest container port JNPT has welcomed the proposal on corporatisation of the large 12 state-run ports, and exuded confidence that it will be the first to get incorporated as a company.

"The proposals are welcome...We will be the first one to get corporatised as and when the government moves on the reform," Jawaharlal Nehru Port Trust (JNPT) chairman NN Kumar told PTI after presentation of the ..

Read our full coverage on Union Budget

With the employee unions calling for an indefinite strike starting from next Sunday, Kumar acknowledged that there will be "challenges" in this process.

He said certain legislative changes will also be required for the ports to get corporatised, which will entail an incorporation under the Companies Act.

"As the success of so-called minor ports has shown, ports can be an attractive investment possibility for the private sector. 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, public sector ports will be encouraged, to corporatise, and become companies under the Companies Act," Jaitley had said in his speech yesterday.

The port sector is witnessing increasing interest from private players and even ports like JNPT already operate terminals under the public private partnership route wherein private entities have been given concession rights over a terminal after building it.

In FY14, the port handled 55% of the container traffic in the country.

Kumar also hailed announcements to improve the PPP model as well as the thrust on infrastructure, saying this will help the port, which recently awarded a contract to PSA of Singapore to double its capacity by building a fourth terminal.

The unions say the move to corporatise is an "enabling provision" to privatise them, saying once a company is incorporated the government share will gradually go down to minority, which will give a private party majority or full control over a port.

"Corporatisation of ports will lead to privatisation and thereby, allow private players to leverage on the existing unutilised land resources as well as improve efficiency in operations," consultancy firm EY's tax partner Samir Kanabar said in a statement.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, March 01 2015. 12:37 IST