Corporatisation of major port trusts may cull new port law

P Manoj Mumbai | Updated on February 01, 2020

Once the new law is enacted, the Shipping Ministry could attempt corporatisation and disinvestment at a later date by invoking Section 50 of the proposed Major Port Authorities Bill   -  Sanjit Das

The Central government will pursue corporatisation of State-owned major ports directly either by invoking a clause in the Major Port Trusts Act or by amending the law itself which could make a Shipping Ministry plan to facilitate the long-pending structural reform of these ports through a new law redundant.

“This government would consider corporatising at least one major port and subsequently its listing on the stock exchanges,” Finance Minister Nirmala Sitharaman said in her Budget speech to Parliament on Saturday.

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

The announcement “shocked” the influential port workers unions whose strident opposition to the corporatisation plan had forced the Shipping Ministry to opt for the conversion of the 11 port trusts into port authorities through a new law. The aim is to grant greater autonomy and flexibility to the major ports and to professionalise their governance for speedier decision-making to help them compete with private ports.

Once the new law is enacted, the Ministry could attempt corporatisation and disinvestment at a later date by invoking Section 50 of the proposed Major Port Authorities Bill.

This Section is an exact replica of Section 111 of the Major Port Trusts Act, 1963,which reads: “Without prejudice to the foregoing provisions of this Chapter, the Authority and every Board shall, in the discharge of its functions under this Act be bound by such directions on questions of policy as the Central government may give in writing from time to time. Provided that the Authority or the Board, as the case may be, shall be given an opportunity to express its views before any direction is given under this sub-section. The decision of the Central government whether a question is one of policy or not shall be final”.

Shipping Secretary Gopal Krishna said that there was “no confusion” over the Budget announcement and details will follow. “Whenever it is to be done, the details will be out and then you will come to know of it,” he told BusinessLine.

The top bureaucrat in the Shipping Ministry did not concur with a view whether the budget announcement can be implemented in the absence of an enabling legal provision. “The MPT Act can be amended”, he quipped, adding that the FM’s announcement “doesn’t talk about the Major Port Authorities Bill at all”.

Port workers’ unions apprehend that the government may not pursue the proposed new port law at all and instead invoke Section 111 of the MPT Act to convert port trusts into companies, said T Narendra Rao, General Secretary, Water Transport Worker’s Federation of India.

“Any policy decision taken by the government will be imposed; that is what Section 111 of the MPT Act means. This clause will be enough to convert the port trusts into companies. They can do it without any revolt from the workers unions,” says Rao.

“The announcement is a sheer violation of the assurance given by the Shipping Ministry that the Major Port Authorities Bill will not be used for back door corporatisation of ports which would be retained as autonomous bodies. The national coordination committee of port workers federation will plunge into industrial action against this move,” Rao stated.

Published on February 01, 2020

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