Shipping ministry overrules port trusts to offer sops to users, PPP operators stung by the pandemic

P Manoj Mumbai | Updated on April 22, 2020 Published on April 22, 2020

Workers’ union demand scrapping of concessions

The Shipping Ministry on Tuesday cleared a package to ease the burden on port users, public-private-partnership (PPP) operators and shipping lines caused by the pandemic and lockdown restrictions. The Ministry’s decision overlooked the concerns raised by the chairmen of many state-run major ports who cited their dire financial position to oppose the plan, at least two people said.

Major port trusts such as Cochin, Kolkata, Chennai, Mumbai, Goa, Visakhapatnam, and VO Chidambaranar either have wafer-thin operating profit or are running at a loss.

This explains why Mumbai Port Trust and Mormugao Port Trust were excluded from the package approved by the Ministry, directing the 12 major ports to offer free storage time to port users during the lockdown period and to defer the annual lease rentals/license fee payable by lessee/licensee for April, May and June, an official briefed on the development said.

Defer charges

The other sops offered by the Ministry includes waiver of penal charges, demurrages, detention charges, dwell time charges, anchorage charges, penal berth hire charges, as well as of performance-related penalties on port users (traders, importers, exporters, shipping lines, concessionaires, licensees, CFS) for any delay in berthing, loading/unloading operations or evacuation/arrival of cargo during the lockdown period.

Ports will also allow interest-free 60 days deferment of marine dues/vessel-related charges to Indian coastal vessels.

Similarly, the major ports were directed to defer the April, May and June months’ revenue share, royalty and equipment hire charges payable by PPP operators and to waive their lease rentals/license fees for three months till June.

Financial repercussions

The port workers’ unions, meanwhile, have urged the Shipping Ministry to scrap the relief package, saying that the concessions would adversely affect the financial health of all major ports given their huge financial liability towards payment of wages/salaries to 30,000 officers and employees and some 1,25,000 pensioners.

“The concession being offered does not have any justification and will have serious repercussions on the financial health of major ports,” said T Narendra Rao, general secretary, Water Transport Workers Federation of India.

The implementation of concessions to port users would dilute their revenue stream on the pretext of Covid-19 pandemic and further endanger the financial viability of major ports, affecting their exchequer.

The effect of the Covid-19 pandemic, according to Rao, is a worldwide phenomenon and its impact has to be shared by all the stakeholders.

“Therefore, it is unfair and illogical to thrust the entire financial burden only on the major ports, which in turn provides all the necessary infrastructure such as equipment, installations, deep draught, storage yards etc to port users for round the clock cargo handling operation even during the period of lockdown as shipping and water transport industry has been declared as an essential service,” Rao said.

The concessions granted to port users, PPP operators and other stakeholders would accelerate the financial crisis facing major ports with a cascading impact on port employees and pensioners, he added.

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Published on April 22, 2020
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