Finance minister Arun Jaitley’s budget proposal to work towards converting 12 public port trusts in India into corporations under the Companies Act is expected to bring in greater efficienies in operations, raise funds for growth and compete better with their private sector counterparts. But the concerns of workers at these ports will have to be allayed before going ahead with the proposal.
The details of how the government will implement this change is still awaited, but port officials say this is a step in the right direction.
NN Kumar, chairman of Jawaharlal Nehru Port Trust said that public sector ports need huge capacity additions and investments to remain vibrant and competitive against private ports.
“It will be a good move as it will bring more autonomy to the ports, help them increase efficiency and attract domestic and foreign funds which can be used for capacity additions,” Kumar said.
The move gains significance especially in light of the fact that major ports had a 90% market share of cargo handling in 1996. This has fallen to 57% in 2014. According to a Citi Research report, major ports’ share of cargo handling may slip to 50% if corrective steps are not taken.
“This step (to convert the trusts into companies) will bring in accountability, open ports to more scrutiny and will aid in using the resources of the ports effectively,” says SS Mishra, who recently retired as the chairman of the Paradip Port Trust in Odisha.
However, there have been reports that port workers are opposing this move and have called an indefinite strike beginning March 9. The workers are upset that the government has not taken them into confidence while deciding to make, what they are calling, radical changes in the organisational structure of the ports and the consequences arising out of it.
But Kumar and Mishra cautioned that the concerns of port workers need to be allayed before implementating this proposal, and the current management of ports have to play a key role in the process.
One of the concerns that workers may have is the fact that under the current structure, their representatives often function as trustees of the port, Kumar said. Whether these trusteeships will be converted to directorships in the company remains to be seen.
Legal experts and analysts rule out the possibility of job losses arising out of the decision to convert these ports to companies. They say corporations are simply a more transparent form of running a business, where decisions are made with a view to making profits, while a trust structure is generally opaque and cumbersome.