Private
players say that the government and port trusts dont appear to
appreciate the potential contribution of private investors and lenders
whose commitments, are perceived to be suspect. They feel that ports
do not know how to attract private capital and are going about it in a
ham-handed manner.
They point out that this is partly the reason why the Ministry of
Surface Transport (MoST) gave IDFC the mandate to attract private
capital into commercially viable infrastructure projects. IDFC finally
drafted the bid evaluation criteria for private projects in the major
ports, standardised the bid documents and drew up the model license
agreement after months of protracted discussions with port authorities
and private investors.
Reassured that they would not be given the short end of the stick,
private players put forward a number of proposals. However, a lot
still needs to be done, for instance, the corporatisation of port
trusts. After Ennore Port was set up, others ports like JNPT, Goa,
Tuticorin and Mangalore have also declared their intentions of
corporatising their operations. JNPT has taken some concrete steps
towards that goal with the preparation of a final evaluation report
for its assets.
Says a financial institution official: Corporatisation has several
advantages. For instance, the ports can hive off their poor performing
berths as a `special purpose vehicle' (SPV) in a joint venture
partnership with any interested private investor who has the required
strengths to turn around the berth.
In addition, corporate ports do not come under the purview of Tariff
Authority for Major Ports (Tamp) and hence private ports have
flexibility in fixing their service charges. Private investors are
also chary of absorbing the existing workforce working in the
terminals being privatised. At Chennai Ports container terminal,
P&O is required to take over all the 570 workers working there.
PSA Sical also has similar obligations at Tuticorin Port. "Labour-related
conflicts are a major constraint in attracting private
investors," says Mumbai Port Trusts Mago. The port estimates
that it has an additional workforce of about 23,000 workers. This is
after it introduced a voluntary retirement scheme and cut 6,000 jobs.
Mumbai Port is also saddled with the problem of increasing costs and
declining traffic, which is pushing it deeper into the red. Says Mago,
"Last year, we suffered a deficit of Rs 480 crore and losses for
this year are estimated to be around Rs 200 crore. Pinto admits to
the problem, We have inherited a bad legacy of over staffed
infrastructure projects. Nevertheless we are negotiating with labour
unions to have the gang size uniform in all the ports, he says
Unused to competition, older ports are now grappling with issued like
a bloated labour force, old equipment, a low draft to catch up fast
with newer, privately owned or managed ports . "Our gantry crane
can handle just 700 tonne per day (tpd) whereas cranes at Nhava Sheva
can handle 2, 000 tpd. Furthermore, our draft is just 9 metres
compared to Nhava Shevas 12 metres, Mago says.
While the sailing has been largely smooth for most private investors,
some projects, however, are on choppy waters. P&O is one example.
The company said good-bye
to
its plan to develop the Wadhavan port in Maharashtra due to protests
by the local community. Similarly, the Cocanada Port Company at
Kakinada Port and the Dhamra Port Company Private Ltd, Orissa are
mired in problems and may take time to finally settle down to
business.
also see :
The road ahead
A skewed equation
Swimming
with their hands tied
Are
our ports ship-shape?
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