NEW DELHI: India’s major ports urgently need thorough organisational restructuring with a view to transforming them into viable business entities.
India’s 7,500-km coastline is served by a dozen major ports, about 200 notified non-major ports in nine maritime States and Union Territories out of which only 61 non-major ports including those in the Andaman and Nicobar Islands are reported to have handled cargo traffic.
While the major ports fall under the administrative control of the Ministry of Shipping, the non-major ports come under the administrative jurisdiction of the respective State maritime boards or governments.
Of the major ports, only Ennore has been constituted under the Companies Act, while the rest are administered and governed by the provisions of the Major Port Trusts Act 1963. The administration of non-major ports differs from State to State.
In maritime States such as Gujarat, Maharashtra and Tamil Nadu, the port assets are transferred to the respective Maritime Boards. Individual port facilities are either controlled by the board or leased out to port operating companies for terms ranging from 20 to 99 years.
The major ports have functioned under the trust system for periods varying from 25 to 144 years. They have not been able to function as vibrant commercial enterprises.
The boards of port trusts do not seem to have succeeded in taking timely decisions and making investments in infrastructure due to administrative and bureaucratic delays. Therefore, the ports have failed to develop into major infrastructure entities to promote international trade.
To cite an example, the private operator Adani Ports at Mundra in Gujarat crossed the cargo mark of 100 million tonnes in 2013-2014 within a span of 20 years, whereas Kolkata, Mumbai and Chennai which were declared major ports in 1870, 1873 and 1881 respectively, could handle only 41, 59 and 51 million tonnes respectively in the same year. Kandla, declared a major port in 1954, could handle only 87 million tonnes in 2013-2014.
Ennore, which was declared a major port in 1992, handled 27 million tonnes in 2013-2014.
The performance of this port suggests that major ports will be able to perform better if they are corporatised.
Provisions in the new Companies Act 2013 will enable Indian major ports to evolve into good organisational outfits and make them commercially productive and operationally efficient. They should also be given greater financial autonomy.
