 "Demonetisation effect: Ports working without speed money")
Demonetisation might have initiated pain for trade activity across the country but it is also correcting business practices in the shipping sector — like the practice of speed money offered to port and Customs officials for consignments to go through without glitches.
Currently, the domestic shipping sector has two transaction lines running parallel — one is the large contract-based deal where an invoice is raised and the other is known as ‘speed money’. “Speed money is offered to port and Custom officials for doing their job. They do not provide any additional services for it,” said an executive associated with the sector. For the past month, after-demonetisation, port and custom officials have lost their share of ‘speed money’. Though executives in the sector expect the practice to resume once new currency notes enter the system, shipping agents, companies and freighters pledge they would not offer ‘speed money’ to discourage unwarranted cash dealing in the system. “Several organisations are pledging not to take this practice forward. We need to see if it works,” said an executive with a shipping company.
Mumbai And NhavaSheva Ship-Agents (MANSA), for the first time since its inception in 1977, has formed an anti-corruption cell, comprising member companies where industry officials can lodge complain against authorities holding back consignments for want of speed money. “We will be the raising issue with the relevant department, be it port or Customs, and see to it that this practice is clamped down,” said Vivek Singh Anand, president, Association of Shipping Agents at these two ports.
The speed money practice which perhaps started in the British era, was then termed as ‘Baksheesh’. It was given as a tip to port and Custom officials for doing their job. Over the years, this practice has strengthened grip to the extent that running trade becomes difficult if speed money is not plugged into the system. “Authorities interpret rules differently and that leads to delay,” added C S Murthy, secretary-general, MANSA. Anand added the association would approach chairmen of ports across country to seek their support for this move.
Analysts, however, were of the view that formation of the anti-corruption cell may not help the industry to a great extent. “People will find their way out, sooner or later, to continue the practice. In terms of business, it is not a significant move for the overall industry. These transactions are not accounted for and are petty cash, so we do not see the shipping industry benefiting in terms of savings,” said Hitesh Avachat, analyst at CARE Ratings.