The Hindu Business Line : Water transport workers want maritime policy re-charted

THE Water Transport Workers Federation of India (WTWFI), representing port and dockworkers in the country, has suggested a major overhaul of the proposed Maritime Policy so as to address the various challenges faced by the port sector in India.

The Federation was of the view that both the shipping and ports sector in India were under the control of foreign shipping interests and that the Maritime Policy should endeavour to change this situation with policy responses.

The policy should be set in the background of current realities and clearly set the goals and specify the means by which they sought to be achieved, Mr K. V. A. Iyer, Vice-President, WTWFI said.

Airing the views of the Association on the draft policy, he pointed out that the advent of globalisation had opened up Indian ports to foreign shipping interests, which in a large way acquired interests in all major and minor ports in the country. With the operating rights thus secured in ports in the sub-continent, most lines have secured a captive market for its shipping service.

However, the Indian companies started losing in the globally changed shipping environment on account of cut- throat competition and reduction in freight rates.

Moreover, lack of support to secure cargo from the Government side to Indian companies in accordance with UNCTAD (United Nations Conference on Trade and Development) norms has also worsened the situation. As per the UNCTAD norms, 40 per cent of the cargo had to be moved by domestic carriers, he said.

Finding that the going in the overseas trade was tough, certain Indian companies turned to coastal trade. Though there was limited scope and hardly any market for pure coastal trade, coastal shipping offered protection from competition to Indian shipping companies.

However, the Government relaxed the Cabotage Law allowing foreign companies to move containers in overseas trade between the Indian ports. It might be recalled that the coastal trade is recognised all over the world as a preserve for domestic shipping companies by enacting the Cabotage Law, he added.

According to the Federation, most maritime nations heavily subsidise shipping service and seaports. Citing an example, Mr Iyer said providing largesse to shipping and port sector is the accepted norm in the US. For countries in the European Union, subsidies have to be in conformity with the competition policy that member-governments are required to pursue under the Maastricht Treaty, which is the basis of the formation of the EU.

Though maritime transport operates in the global environment, the US regime did not allow globalisation in maritime transport sector. In view of the opposition from the US, maritime transport was kept outside the purview of the Uruguay Round trade negotiation of GATT, which concluded with the WTO agreement signed at Marrakesh in 1994.

The agreement had provided for a sub-committee to look into maritime transport. After many sittings, the subcommittee merely recorded the member-Governments' views and let maritime services remain in the realm of bilateralism. Moreover, most countries provide market access for shipping and ports on a reciprocal basis.

The Federation pointed out that India lost the status of a maritime nation since the 16th century. Apart from naval capability, the essential ingredients of a maritime nation are a large modern merchant fleet, ports with good infrastructure and a vibrant, efficient and self-reliant shipbuilding industry.

Availability of technical personnel being engaged in the related activities in the sector is also equally essential.

The Federation had also offered some specific suggestions and remarks on the draft policy document for the overall benefit of the shipping industry.

Regarding port projects to be awarded through tender route incorporated in the draft Policy, the WTWFI said that the tender process and award of concession to highest bidder would cause to inflate costs.

Hence, the tender process would be for award of concession to the bidder who offers to provide specific port services at the lowest price. Bids for a range of activities of a terminal would be evaluated by assigning weight to each activity based on traffic trends.

The port trusts may also fix nominal lease rent for Greenfield land and fair lease rent for developed land.

On major ports entering into sister port relationships with ports in other countries, the Union suggested that the port's function would be just to serve domestic users to facilitate overseas trade.

The Federation demanded deletion of many controversial aspects in the ISPS code, including the audit of foreign port facilities by the US Coast Guard, saying that its implementation aspects involve the national interest and sovereignty of countries.

It also wanted to delete the paragraph on corporatisation of all ports by changing the Major Port Trusts Act, saying it is inconsistent with the recommendations of Standing Committee on Transport and Tourism.

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