Ports not keen on buying cash-strapped DCI

P Manoj Mumbai | Updated on July 12, 2018

Port trusts reckon that instead of buying equity in DCI, they could grant it long-term loans. This file photo shows a DCI dredger   -  The Hindu

Asking cash-rich major port trusts to take over the struggling Dredging Corporation of India (DCI) could be a safe bet for the government with polls less than a year away. But the port trusts aren’t convinced about the benefits of such a deal between two state-owned entities.

“Port trusts are getting out of non-core activities, and dredging is definitely not a core activity,” said an official at one of the major ports on the western coast. For instance, the repair workshops and dry docks at some of the major ports have been given to Cochin Shipyard Ltd on lease. “We are focussing on core activities and even there, new projects are being implemented under the PPP mode, he said. “The aim is to move to the landlord port model followed globally.”

Even some of the core activities are being outsourced. Some, like marine activity, cannot be outsourced. Globally, ship movements are looked after by the ports. In India, even there, some activities such as tug services have already been outsourced.

Some ports also run small dredgers to dig berth pockets where bigger dredgers cannot be used. “We are able to get all other services from outside. To drink tea, you don’t need to buy a tea estate,” said another official at one of the major eastern ports.

Port trusts reckon that instead of buying equity in DCI, it would be better to grant it long-term loans.

“It is always better to give long-term funds to these institutions at 8-9 per cent. It is a win-win situation for both because DCI will not have to pay interest at market rate, whereas port trusts will get returns than from bank deposits,” the second port trust official said.

The issue will be decided by the three-member port trust chairmen panel set up by the Shipping Ministry.

“But, if the Centre directs us to buy DCI, we won’t have a choice but to comply,” the official said.

The idea to reive DCI with the help of major port trusts came up during a meeting held in Delhi to discuss a proposal relating to purchase of the iconic Air India building at Nariman Point in South Mumbai by Jawaharlal Nehru Port Trust (JNPT) to help ease the financial distress facing the national carrier Air India after its botched privatisation plan.

Port workers unions, who favour use of internal resources of port trust to set up new cargo terminals, instead of doing this through private funds, have backed the move to revive DCI with the help of major ports trusts.

“Rather than DCI going into private hands, it is good that port trusts can purchase the shares of DCI,” said T Narendra Rao, general secretary, Water Transport Workers' Federation of India.

Published on July 12, 2018

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