Given India's geopolitical realities, one cannot question the need for government agencies to follow procedures or take such actions as are commensurate with the need to keep the country's borders safe. It is also understandable that national security-related information is subject to a certain degree of confidentiality. The problem arises when these procedures and actions are applied in a manner that smacks of arbitrariness or inconsistency. Worse still is that they are vested with an aura of intractability as to be bereft of any norms for timely action. A case in point is the seemingly ambivalent security clearance procedures adopted for port projects. As a news report appearing elsewhere in today's edition demonstrates, the projects of a host of Indian companies are stuck on account of denial or withholding of security clearance by the Home Ministry. In one case, an Indian company operating the country's largest private port terminal at Mundra did not get security clearance for building a container terminal at Jawaharlal Nehru Port (JNP), but was allowed to bid for a similar project at Chennai Port, which is also government-owned. How could a company be a security risk in one State, but a safe bet in another? The trouble is no one can seek reasons for such actions, considering the sensitivity attached to security matters.
In the past, only foreign companies were denied security clearance. But there was some ostensible pattern here: Chinese companies have de facto been prevented from bagging port projects since 1997. At the same time, the Dubai Government-owned DP World today runs four major container terminals, handling more than 40 per cent of India's total container traffic. It also operates the country's only container transhipment terminal at Vallarpadam. The Danish AP Moller-Maersk Group and the Singapore Government-promoted PSA International, likewise, have container terminal operations in India, with the latter recently awarded the largest foreign direct investment project in the port sector at JNP. In the case of Indian companies, security clearance was earlier required only when there was foreign equity participation of more than 15 per cent. This has since been tightened to make security clearances mandatory for all bidders. One cannot, again, quarrel with that: Surely, port security deserves more attention than shore-based installations. Their location, allowing access from the sea and the associated risks involving foreign nationals or illicit goods trafficking, poses special vulnerabilities that cannot be discounted.
While there can be no compromise on security, it still does not do away with the necessity of having a consistent and expeditious system of clearance. It is quite common now for port trusts to invite price bids first and wait for security clearance before opening the bids. The parties denied clearance then go to court, delaying the project further. India desperately needs additional port capacities to handle the growing cargo traffic volumes. The 12th Plan Working Group for Port Sector has projected the private investment component alone in the next five years at well over Rs 50,000 crore. For that to happen, security clearance procedures clearly need streamlining.