Centre keeps corporatisation hopes ‘alive’ in new port Bill

There is enough wiggle room in a new Central Bill to help facilitate port corporatisation, with workers’ unions of the opinion that the ‘agenda’ could be implemented at a later stage.

The Major Port Authorities Bill, introduced in Parliament, seeks to convert 11 of the 12 ports owned by the Centre from trusts into authorities, as part of a compromise plan drafted by the Nitin Gadkari-led Shipping Ministry. This was after unions opposed their conversion into companies, the preferred choice of the ministry for modernising the institutional structure of these ports.

The Bill, when signed into law, would give greater autonomy to major ports and professionalise their governance for speedier decision-making to help them compete with private ports.

Unless the ports are converted into companies, the government cannot list them on the stock exchanges and potentially disinvest or privatise them.

“The Board of each port authority shall, in the discharge of its functions under the Act, be bound by the directions on questions of policy as the Central government may give in writing from time to time,” according to Clause 50 of the Bill. It further states that while the Board shall be given an opportunity to express its views, the decision of the Centre on whether a question is one of policy or not shall be final and binding on the Board.

When the port trusts are converted into authorities as envisaged in the new Act, the power of the Centre to issue directions to the directors of the Board may finally lead to converting the port authorities into companies through an executive order, workers’ unions said while deposing before the Standing Committee.

In fact, the ministry had explicitly attempted this plan in an earlier version of the draft Bill. “The port authority of each major port may change its structure and become a company subject to prior approval of the central government and passing of special resolution through its board in that behalf,” a previous version of the Bill had said.

This clause, however, was excluded from the final draft bill after workers said it was unacceptable to them.

What changed To be sure, successive governments did not use the power vested in it under Section 111 of the Major Port Trusts Act,1963 to issue directions to major port trusts on matters such as corporatisation. This could be partly because of the composition of the board of trustees that comprise political appointees and labour unions, making the task difficult.

But, with political appointees not being considered for board seats and labour representation cut from two to one under the authorities set-up, and the government holding sway over labour nomination, unions fear that there exists a strong possibility of the government issuing an order using Clause 50.

“Thousands of acres of land were handed over by the State governments while building these ports. A port is a national property and meant for public and social benefits; to change them into companies’ and then hand it over to private investors would not be in public interest,” says T Narendra Rao, General Secretary of the Water Transport Workers’ Federation of India.

The Shipping Ministry, though, has assured the agitated unions that it would not misuse Clause 50. “There is no such provision in the MPA Bill which provides for corporatisation or privatisation of major ports,” the ministry said in a written submission to the Standing Committee.

But, the unions don’t buy this assurance. The standing committee has also backed them, arguing that “retaining Section 111 of the MPT Act in the new Bill may be intentional to use it at the appropriate time by the government and may endanger the very interest of the major ports, particularly when the ongoing policy of privatisation is aggressively pursued by the central government”.

COMMENT NOW