The Major Ports Authorities Bill 2016, when passed, will pave the way for governance reform in the management of 11 out of 12 major ports in India now run as trusts (the Ennore port is a company), with the Centre acting as both regulator and service provider. With ‘authority’ status, ports will have a smaller management board, enabling expedient decisions on modernisation and use of port trust lands in the public interest. It is the first step towards moving to a ‘landlord model’ in the management of ports as is the practice worldwide; the government would regulate the services provided by private players, while not being a service provider itself — hence, avoiding conflict of interest. The unions, which have protested the Bill, are not off the mark in saying that the management of ports as authorities is the first step towards their eventual corporatisation. A transition from authority to company status may not require the consent of Parliament. However, there can be no denying that the management of ports as trusts over the decades has done little to commend itself. Trust boards have turned into fiefdoms of bureaucrats and politicians. Apart from cronyism in the parcelling out of port land, the development of ports has suffered, with decisions not being taken in an objective, transparent manner.

With India’s major and non-major ports (over 200 of them) accounting for over 70 per cent of India’s international trade by value, it was necessary to address inefficiencies such as high turnaround time of ships by stepping up modernisation and grappling with shoddy management. The new Bill marks an effort to promote ease of doing business. The Cabinet recently accepted some of the recommendations of the Standing Committee on the Bill, such as increasing the representation of labour on the board to protect their interests. Reforms have been under way since 1996, when ports were opened to private investment. Of the 240 cargo berths operating in the major ports, 66 berths or 28 per cent are run on a PPP basis. Of the 174 state-owned berths, 102 load general or multiple cargo. Specialised cargo handling berths have a higher scope for PPP, mechanisation and improved efficiencies. While major ports have been losing share to non-major ones (some of them privately run) over the last decade, accounting for about 57.2 per cent of the total cargo handled of 1,133 million tonnes in 2016-17, there have been recent improvements in performance. Cargo handled by major ports increased by 6.8 per cent in 2016-17, against 4.2 per cent in the case of non-major ports.

The focus should also be on re-skilling the workforce, rather than cutting down on their numbers, already down to about 37,000 in the major ports from about a lakh a decade ago. Reforms can usher in efficiency benefits rising out of the landlord model, without compromising the public interest.

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