Stevedores at major ports face fee regulation

The Union Government is evaluating a policy option to regulate the rates being charged by stevedores and other cargo handling agencies at major ports.

The move follows the recent controversies over the alleged irregularities in appointing stevedores at Kolkata port.

The Ministry of Shipping has reportedly sought an explanation from the port authorities on the allegations of high rates being charged by cargo handling agencies.

Stevedoring charges are fees paid for loading and unloading ships and there are firms that specialise in this service.

The Ministry has now constituted a committee headed by Paul Antony, Chairman of Indian Ports Association, to study the issue in detail and to suggest whether the private cargo handling agencies at ports can be regulated.

One of the options is said to be to auction stevedoring services on the basis of a revenue sharing arrangement with the port. Like in the case of public private partnership projects in ports, the parties offering the highest revenue share will get the contract to offer cargo handling services.

The committee is required to submit its report in two weeks and, based on its recommendations, the government is expected to come out with a policy on engaging the service of private stevedores at all the major ports, said a government official.

Currently, the government ports appoint stevedores after accepting a licence fee approved by its board of trustees.

There is no limit on the number of stevedores a port can appoint. Stevedores and other cargo handling agencies are free to charge any rates for the service they render.

Following allegations of revenue loss to ports on account of private stevedoring, the UPA Government had appointed a committee headed by the Development Advisor on Ports to Shipping Ministry to study the issues.

That committee had recommended against the appointment of stevedores on the basis of revenue share as, it felt, such an arrangement will increase the transaction cost at ports.

The committee was also said to be against regulation of the rates charged by cargo handling agencies as there is enough competition among them and that forces market to determine the rates.

Though the Tariff Authority for Major Ports (TAMP) regulates port charges at government ports, stevedoring and cargo handling services on board ships were left unregulated.

Stevedores are hired by shippers and historically these services are not regulated by ports.

The government is weighing the option of regulating stevedores at a time when there is a demand to abolish even TAMP and de-regulate port charges at the government ports, said an official with a stevedoring firm.