Port majors to get rebate

Discount on revenue share for big employers of labour from mojor ports

Companies that absorb higher labour force from a major port terminal are likely to get a better discount on the annual revenue share they pay to the government after taking over the terminal operations.

To simplify labour problems arising out of privatisation of port terminals, the shipping ministry has proposed a rebate in return for labour absorbed by the private operator.

Contracts for privatisation of major port terminals are awarded on the basis of annual revenue share quoted, so a rebate means a lower payout per year for the company.

The provision is part of the draft guidelines made for private participation in major ports under the jurisdiction of the central government. The draft has been circulated for comments from stakeholders.

The proposal is expected to help ports with a large labour force like Mumbai, to make the terminals attractive to private players, port officials said.

The draft has suggested a fixed annual rebate rate that correlates with the cost that the port would have to incur on labour if the terminal is not taken over by the private operator, should taper gradually.

This would also smoothen the transition of labour from the port trust to the private operator. Privatisation of terminals is generally preceeded by labour unrest due to uncertainity over redeployment.

The case in point is strikes by port workers in Chennai and JNPT when the terminals were privatised. In fact, privatisation of the third container terminal at the port was met with resistance from the labour force.

This is despite the fact that the present private sector guidelines require the terminal operators to take over labour as decided by the port.

For additional security of the port employees absorbed, the draft has also recommended that they be able to retain their job with the port trust for upto five years.

The present guidelines specify that the port should clearly bring out the private operator's commitment to labour in the tender document. While identifying labour that is to be absorbed, the ports should give preference to those willing to be transferred irrespective of whether they were deployed in the particular facility or not.

Smoother sail

• Rebate will mean a lower payout per year for the company
• Provision is part of draft guidelines made for private participation in major ports
• Move to help ports with a large labour force like Mumbai, make the terminals attractive to private players
• May smoothen the transition of labour from port trust to private operator