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India Drops Plans Granting Ports Increased Autonomy

India

By Reuters 2015-09-23 16:06:12

India will change existing laws governing ports to make them more profitable and efficient, the shipping minister said on Wednesday, putting on hold a plan to turn them into corporate entities under pressure from trade unions and political parties.

Finance Minister Arun Jaitley earlier this year announced a plan to corporatize ports, widely seen as an attempt to raise revenues by listing them.

Nitin Gadkari said the government has moved to amend existing laws to make the ports' management more independent and professional so that they can be efficient and bring down turnaround times of ships at the 12 major ports in the country.

The government's failure to move forward on the port corporatisation plan follows a similar retreat on efforts to ease land acquisition laws to build roads and ports.

A longstanding plan to harmonise taxes across all of India's 29 states by April 2016 is also now in question as opposition groups seeks to block the reform agenda.

"When we tried to implement corporatization of ports, the trade unions raised objections. Some political parties tried to make mileage out of it, disregarding national interest and development," said Gadkari, a businessman-turned politician who is spearheading reforms in infrastructure.

"We have decided that instead of making them corporate bodies, we will change existing laws, and see what else we can do in other areas to improve efficiency," he said.

Under the plan unveiled in February, the government planned to convert the trusts which manage the ports into companies under the Companies Act, giving them greater operational autonomy including pricing and raising of funds.

Some of the trusts date back centuries such as the Bombay Port Trust established in 1873 as the main gateway to India. In 2014 the World Bank said that India's ports faced a challenge to meet the needs of one of the world's fastest growing major economies and have been slow to embrace modernisation of management structures.

Gadkari said his administration aimed to reduce the turnaround time of ships at Indian ports from four days to two days in line with international standards. Some ports such as Hong Kong turned around ships in 10 hours.

India aims to expand annual capacity of its ports to 2,000 million tonnes by 2018 from 1,450 million tonnes now, shipping secretary Rajive Kumar said.