Stevedores face crisis as major port trusts-run berths head for privatisation

Facing a threat to their existence, stevedores and shore handling agents have urged the Ministry of ports, shipping and waterways to re-consider the policy to privatise the cargo terminals at Centre-owned port trusts, that are run by the State.

Stevedores and shore handling agents load and unload bulk cargo from and onto ships from the major port trusts run non-mechanised, common user facilities after buying licenses from the port authorities by paying an annual fee of ₹4,000 to ₹1 lakh depending on the port.

These entities are engaged directly by the exporters and importers based on competitive quotations to load and unload cargo.

New rules, new ways

The cargo berths/terminals run by the port trusts would be privatised when they are converted inti authorities under a new law currently awaiting Rajya Sabha approval.

This is because the ‘port authority’ formed under the proposed Major Port Authorities Bill will play the role of a landlord – a model widely followed globally wherein the publicly governed port authority acts as a regulatory body and as landlord while private firms carry out port operations, mainly cargo handling activities.

The landlord port, in return, gets a share of the revenue from the private entity.

“Major ports will be moving from managing their operational services on their own to a model where a private partner will manage it for them,” Finance Minister Nirmala Sitharaman said in her Budget speech on February 1.

“For the purpose, 7 projects worth more than ₹2,000 crores will be offered by the major ports on Public Private Partnership mode in FY21-22,” she added.

“This push appears to provide an easy platform for private port operating companies to make an entry into major ports,” says Ishwar Achanta, President, Federation of Association of Stevedores.

Cause and effect

“This move will ensure loss of livelihood for the licensed stevedores at major ports and leave thousands of workers jobless and hand over precious assets to private companies, who would have no qualms about setting tariffs to suit their commercial interests,” Achanta stated.

“It is the stevedores who have marketed and brought the cargo to the major ports, promoted door to door logistics, bonded facilities for stock and sale, invested in cargo handling equipment and systems and established hinterland connectivity,” he stated.

The stevedores body feels that outdated and antiquated policies and tariff regimes have created inefficiencies at major ports while improper implementation of existing policies have led to higher costs.

“Major ports insist on charging for services which are not provided, leading to unwarranted higher tariffs and escalated last mile costs,” Achanta added.

Separately, most of the major port trusts have notified new regulations on licensing of stevedoring and shore handling agents that sets out the terms for issuing permits including fees and rates for handling different types of cargo.

The stevedores’ body has urged the ministry to “revise” the stevedoring and shore handling regulations arguing that they were “detrimental” to their interests, “impractical and stringent”.

It is understood that the changes suggested by the stevedores’ body are being considered by the ministry.