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Govt may convert 12 major ports into corporates

business Updated: Jun 01, 2010 16:39 IST

PTI
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The government is considering to provide greater autonomy to 12 top state-owned ports by converting them into corporates to help them compete better with international players.

"About ports, there have been some proposals for corporatisation, but it is not disinvestment. It is conversion of the legal entity structure to corporate structure," Shipping Secretary K Mohandas told reporters in New Delhi today.

Experts have unanimously recommended that corporate structure is much better for decision-making and performance, Mohandas said. He, however, added that a final decision on this is yet to be taken.

India has 12 state-owned ports -- Kolkata (with Haldia), Paradip, Visakhapatanam, Ennore, Chennai, Tuticorin, Cochin, New Mangalore, Mormugao, Mumbai, Jawaharlal Nehru Port Trust and Kandla -- which handle over 500 million tonnes (MT)of cargo annually.

He said the government would prefer a "landlord" pattern for corporatisation, under which the corporate body will own the port, while the services will be leased out.

"Ideally, a landlord structure has been recommended... the corporate entity will own the port property and the actual operations would be leased out," Mohandas added.

Once the structure is changed, the ports will have the freedom to set tariffs that will help them compete with foreign and Indian private ports better. Under the current practice, tariffs for major ports are set by the Tariff Authority for Major Ports (MTPA).