The Hindu Business Line : Port sector in need of more autonomy

Globalisation aims at capturing the foreign market for Indian goods. Ports and shipping help in achieving this objective. However, it is essential that Indian ports be under the control of the government and not under multi-national shipping conglomerates.

THE decision of the Union Government to privatise all major ports by inviting foreign investment has evoked sharp protest from leading trade unions in the Kochi Port.

The five major federations in the port sector are gearing up for a nation-wide agitation in all the major ports against the government's proposal.

Expressing serious concern over the move, Mr K. V. A. Iyer Vice-President of the Water Transport Workers Federation of India, said that the decision was against the conditions set by the government that all new port facilities would be created solely with private sector.

The new policy, he said, would end up with multinational shipping conglomerates gaining total control of the entire maritime sector in India.

Mr Iyer pointed out that under globalisation norms set by the WTO, no country is bound to open maritime services and construction services to global competition.

The exemptions for these sectors were secured by the US to protect their market from foreign competition.

He recalled that maritime services in India were opened to foreign interests in 1999 when the first P&O operated container terminal started operations at JNPT. Several other ports followed suit by entrusting CT operations to private parties, which resulted in port services being monopolised by leading shipping conglomerates.

Globalisation, in the Indian context, aims at capturing the foreign market for Indian goods. Ports and shipping help in achieving this objective. India's exports still remain traditional items such as semi-processed agro products, ores and minerals. However, India is not yet considered a manufacturing base that can cater to global demands in large way.

If ever, India becomes a global leader in manufacturing, it is essential that Indian ports be under the control of the government and not multi-national shipping conglomerates.

According to Mr Iyer the share of Indian carriers in overseas trade in 1982-83 was 40.7 per cent. Since then, there has been steady erosion of the share of Indian carriers in overseas and it presently stands at a mere 15.14 per cent.

Expressing resentment over the move, Mr P. M. Mohammed Haneef, Secretary of the All India Port and Dock Workers Federation, said that the government was going ahead with its decision to privatise ports, against the recommendations of the Parliamentary Committee on Transport.

He said that the committee had accepted the views of the five major federations on the issue and recommended to the government to amend the Major Port Trust Act and grant more autonomy to port trust boards instead of just corporatising major ports.

Though, under the MPT Act, ports function autonomously, the government intervenes in their day-to-day working in the name of guidelines, which have no validity under section 111 of the MPT Act. Responding to the government's contention that the internal resources of the 12 major ports were hardly Rs 5,000 crore, Mr Haneef said that internal resources were inadequate because of the low port charges — barely 2 per cent of the value of cargoes passing through them.

In other words, Indian ports have actually subsidised the huge profits earned by international shipping cartels, he added.

According to Mr Iyer, ports all over the world were under the control of public port authorities or local municipalities.

For investment purposes, public authorities in Europe and the US did not rely on the private sector. But they did include the private sector in port operations to improve efficiency.

India needs a healthy maritime policy to support its shipping and ports sectors.

As regards shipping, Mr Iyer said that the policy direction foresees a fall in the excising level of cargo support that depends on Transchart for dry bulk and preferential allocation of cargo support for Indian crude carriers.

These arrangements are to be disbanded. Similarly, dredging, which forms part of maritime services had to be opened for all, he added.

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