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TIN news:   The Nitin Gadkari-led shipping ministry’s gameplan on undertaking structural reform of 11 of the 12 ports owned by the union government by enacting a new law reveals a strategy to work around union protest while acknowledging political compulsions in Rajya Sabha where the ruling coalition is in a minority.
While the earlier unsuccessful plan revolved around amending the Major Port Trusts Act framed in 1963, under which these 11 ports function to help convert them into companies, the strategy now is to bring them under a new law which will have provisions to facilitate this task.
Instead of a direct conversion into corporate entities with the risk of attracting the wrath of the workers unions who are not in favour of corporatization, plan to enact a Major Port Authorities Act to operate and manage these harbours is seen as a via media by many in the government-owned ports.
“The port authority of each major port operating as a trust may change its structure and become a company, subject to prior approval of the central government, and passing of special resolution through its board in that behalf,” according to the draft major port authorities law.
Mint has reviewed a copy.
“If you straightaway go for corporatization, it will not work out, as seen in the past,” said a chairman of one of the 11 ports. He declined to be named.
“Once the Major Port Authorities Act comes into force after ratification by Parliament, the board of each of these major ports can convert themselves into companies at any time by a special resolution. The Act empowers the board of each of these ports to change to a company without the need to go back to Parliament. The boards will be empowered by Parliament to do this by itself,” this chairman explained.
If the draft law sails past Parliament, subsequent conversion into companies will be smooth, he added.
Each of these 11 ports will be operated, regulated and administered by a professional board comprising at least nine members including a chairman, functional heads looking after operations, finance, works and business development, two independent members, one government nominee and one representative from labour unions.
“The worker unions will be given a seat on the board of each port to ensure a smooth passage of the Major Port Authorities Act. It’s a lollipop from the government. Even if they oppose a conversion into companies at a later stage at the board level, they will not be able to stop corporatization because they will be outnumbered by the other members,” said the chairman.
According to another chairman of one of the 11 ports, “For the first time, the government is planning to give full powers to the boards of each port authority, which will be independent and professional.” This chairman too requested anonymity.
This will end the existing system where the ports are managed by a large board of trustees comprising representatives from disparate interest groups, including port users, labour and trade associations, which make decision-making cumbersome.
The government will try to win over lawmakers in the Rajya Sabha by arguing the provision to corporatize is just an enabling one that would be used depending upon the performance outcome under the new law.
“The government is saying that whatever the ports want to achieve through corporatization, you can get without corporatizing also. That’s why they have found the via media. Without corporatizing, the government will give the same powers to the board of these ports as a corporate entity has, including powers to raise funds from India and abroad, and it will review the outcome,” the second chairman said. “If it’s okay, well and good. If the government finds that the ports are not functioning properly even under the new law, they may convert them into companies. Government doesn’t have to go back to Parliament for that.”
The boards of these ports will also wield powers to sell stakes in accordance with the government’s disinvestment policy.
Worker unions said they are not willing to play along.
“The government is doing this very cleverly,” says M.L. Bellani, secretary of All India Port and Dock Workers Federation, the largest of the five workers unions at the 12 ports.
“It’s a back-door attempt to corporatize and privatize the 11 ports. It will be detrimental to port employees and workers. Public property and huge tracts of land owned by the ports will go into private hands.”
The five worker unions will meet on 30 November and 1 December to chalk out their strategy. “We will go for agitation to oppose the government plan,” Bellani said. “If they don’t agree, we will even go to the Supreme Court.”

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