Bill for changes in major ports Act likely in Winter Session

The Government plans to bring in an amendment in the Major Port Trusts Act, 1963, for corporatisation of 12 major ports in the country during the Winter Session of Parliament.

“Work on the corporatisation proposal has been going on for very long. But somehow it could not be taken forward due to various reasons. Now, we hope to take it forward in the next couple of months so that the amendment Bill can be brought in next session of the Parliament,” a senior Government official told Business Line . The Winter Session will take place in December.

Currently, there are 12 major ports, besides 187 minor/intermediate ports along the 7,517-km-long coastline. The major ports are under the Central Government and administered under the Indian Ports Act, 1908 and the Major Port Trust Act, 1963. The Centre has appointed a Board of Trustees of these ports.

The Trusts operate on the basis of policy directives and orders from the Centre and their functions include planning, management and port operations. Port tariffs are fixed by the Tariff Authority for Major Ports. Minor ports are owned and managed by State Governments.

The official said the Trust structure limits the way of fund raising, as only debt can be raised and may some times cost more. With a corporate structure, the entity can leverage its equity to raise funds. This will also allow ports to raise capital from the market for future investments and make them more accountable.

Also, there will be more transparency and accountability with the New Companies Act, as well as greater autonomy and flexibility in decision-making. The proposed structure will also help the ports in improving their efficiency level and adopt global benchmarks of productivity.

However, it will not be easy for the Government, as port unions had strongly resisted such a move in the past and the chances are that they will continue to do so. The official admitted that opposition by unions was one of the key reasons for not taking forward the proposal of corporatisation. In fact, the proposal was originally mooted almost 10 years ago, but could not be brought to its logical end due to opposition within the Government.

Now, the official hoped that work during the previous years will help in improving the proposal. The work has already begun to finalise the proposal, after which it will be taken to the Cabinet.