Indian Ports Bill, Attack on Federalism and Loss of Jobs

Tamil Nadu: Last year the Major Port Authorities Act, 2021 (MPA) paved the way to privatise the 13 major ports in India as part of the national monetisation pipeline (NMP). Now, the BJP-led union government is increasing the Centre’s powers over the 187 minor ports in the nine coastal districts.

At present, the minor ports in the country are under the State Maritime Boards under the respective State governments. The Revised Indian Ports Bill, 2022 (IP) proposes to bring them under the Maritime State Development Council (MSDC), appointed by the Centre.

If the Bill is enacted, the States would lose out on revenue from minor ports.

Tamil Nadu Chief Minister MK Stalin wrote to Prime Minister Narendra Modi objecting to the “centralising” provisions of the revised draft of the Bill. His counterpart Pinarayi Vijayan of Kerala backed his objection.

Earlier, Odisha and Gujarat had also written to the then shipping minister Mansukh Mandaviya echoing similar concerns against the draft law.

POWERFUL MSDC

After three versions of the draft IP Bill, the Ministry of Ports, Shipping and Waterways released the revised version in August 2022.

While releasing it, Union Minister of Ports Sarbananda Sonowaly said the MSDC will ensure cooperative federalism where the Centre and State/UT Governments will work together towards preparing a progressive road map for the country.

However, Stalin said, “Currently, it is only an advisory body and converting it into a regulatory body with permanent staff will surely encroach upon the powers of States.”

Stalin argued that the proposed composition of the MSDC, with five secretaries and one joint secretary to the government of India, as members is inappropriate as it excludes the secretaries in charge of ports in the maritime States/UTs.

Speaking to NewsClick T Narendra Rao, General Secretary of Water Transport Workers' Federation of India said the apex decision-making MSDC “has 14 members representing the union government and seven from the states. The Union minister of ports is the chairperson of the council.”

All final binding powers of the MSDC rest in the hands of the chairperson.

Like the Goods and Services Tax (GST) Council, the MSDC must continue only as an advisory body, demanded Stalin.

FEDERAL POWERS USURPED

The draft IP Bill says the proposal to make amendments to the powers of the maritime States/Maritime State Boards by State Legislatures is based only on the recommendations of the Centre or MSDC.

Also, currently, the appellate powers against the orders of the State Maritime Boards lie with the respective States. However, as per the draft Bill, this power will go to the Appellate Tribunal which has been constituted by the Centre for the major ports.

This would affect the powers of the States to deal with disputes on their own.

Considering the above reasons, Stalin demanded Chapters II and III of the draft Bill relating to MSDC should be deleted entirely. He also requested the scrapping of Chapter V relating to the State Maritime Boards.

GROWTH TRAJECTORY OF MINOR PORTS

The growth trajectory of India’s port sector shows that non-major ports managed by maritime states have grown faster than the major ports under the union government. Experts say this was because the maritime states facilitated the growth of non-major ports through private investments and business-friendly policies.

Thereby, the shift of power to the Centre “may end up choking the future development of minor ports” said Stalin. 

Jose Paul, former Acting Chairman of J N Port, Mumbai writes that in 2000-01 the share of the major ports in handling traffic was 76% and that of non-major ports, 24%. In 2020-2021 the share of major ports declined to 54% while that of non-major ports increased to 46%. 

In the Business Line article, Paul notes that by 2030 non-major ports in India would overtake the major ports in cargo handling.

He also cited how in many coastal countries - the US, Canada, Japan and Germany - no central co-ordinating body undertakes planning and coordination of ports. It is largely the local bodies that vest power over ports.

Whereas, the IP Bill empowers the Indian government to make any port or part thereof non-operational for any other reason it deems fit.

The Bill also provides a definitive regulatory blueprint for the creation of new ports.

THREAT TO EMPLOYMENT

Major Port Authorities Act, 2021 increased the private sector participation in the operation and management of the ports while the ownership of the assets remains with the government/concerned port authorities.

Rao noted that the national monetisation pipeline has become a threat to employment in ports and docks, and the centralisation of minor ports would take the same path.

“Through the MPA Act, the import-export of cargo in major ports (the core activity) was outsourced to private parties. The Act ensured the shift from the service model to the landlord model, whereby someone sitting far away reaped all the profits,” said Rao.

“The JNP (Jawaharlal Nehru Port) with an annual earning of Rs 2,500 crore hardly employs 700 workers. All the container operation is handled by the private party,” he added.

The Federation urged the government to resume hiring for entry-level posts in major ports and opposed attempts to fill up posts through human resource supply agencies.

On September 13, around 3,000 kilograms of heroin was seized from two containers at Gujarat's Mundra port, run by a private group. The consignment had come from Afghanistan, one of the largest illegal producers of opium.

Stating that this is directly due to the privatisation of ports, the Water Transport Workers' Federation of India, one of the five recognised unions at major ports, held agitations on September 15.

India has a 7,500 km long coastline and 14,500 km of potentially navigable and strategic waterways. About 95% of India's trade by volume and 65% by value is done through maritime transport facilitated by ports.