JNPT issues notice to Gateway Terminals as cargo piles up
Talks to resolve a nearly month-long labour dispute over wages at one private terminal at JNPT remains inconclusive
Bangalore/Mumbai: Cargo continued to pile up at all the three terminals of state-run Jawaharlal Nehru Port Trust (JNPT), near Mumbai, as talks to resolve a nearly month-long labour dispute over wages at one of its private terminals remained inconclusive.
Workers operating trailers that cart containers from the wharf to the storage yard and vice versa at Gateway Terminals India Pvt. Ltd (GTI) resorted to a go slow in late October, seeking more wages, highlighting the inability of the concession agreement to deal with such situations, said shipping experts. A concession agreement spells out the terms and conditions of a port contract.
The three JNPT terminals in Mumbai handle nearly 50% of India’s container traffic, GTI being the largest. Run by a joint venture between Denmark’s APM Terminals Management BV and Container Corp. of India Ltd (Concor), GTI has shut the gates through which export containers are brought to the terminal for the last 25 days.
With the terminals not accepting export boxes, vehicles have begun queuing up to 17km to the port gate. A truck now takes nearly a whole day to reach the gate instead of one hour earlier, say freight forwarders.
GTI says the dispute essentially involved trailer owners and the drivers because it has outsourced these key operations to four transport contractors that bring their own trailers and hire drivers to operate them. In return, the transport contractors are paid by GTI on a per container basis.
“Outsourcing of trailer operations to third parties is common in the container terminal industry. The issue is between the trailer owners and the drivers. We have no role to play in this," said an official at GTI, requesting anonymity.
“I have no comments to offer," said Rajieve Krishnan, chief operating officer at GTI, when asked about the losses due to the go-slow. He claimed the port is able to clear the cargo that is discharged and able to load ships on time. “We are in constant dialogue with transporters and we are hopeful that we will resolve the issue by week’s end," he said.
JNPT, on its part, issued a show-cause notice to GTI on 15 November, seeking reasons for not running the concession agreement properly, said N.N. Kumar, acting chairman of the port. JNPT does not have a full-time chairman after the previous incumbent demitted office in May. GTI has seven days to respond to the notice.
Kumar said he did not subscribe to the view that GTI had no control over the issue. “How can Gateway say it has no control? It is a commercial contract between the terminal operator and the transport contractors. The terminal operator has to cancel the contract with the transporters and hire somebody else if they are not performing. It’s the full responsibility of the terminal operator," he said.
“It is surprising, unbelievable and unacceptable that a company of the stature of APM Terminals is not able to sort out a simple issue of salaries and wages to drivers," Kumar said, adding that Concor being a state-owned firm with a 26% stake in GTI should call an emergency board meeting of GTI to resolve the impasse. Concor was not immediately available for comment.
This is the second disruption in less than two months. Last month, another private terminal at JNPT—Nhava Sheva International Container Terminal Pvt. Ltd, run by DP World Pvt. Ltd—faced work stoppages over a wage contract dispute, disrupting operations for more than two weeks.
Meanwhile, much of the cargo is now being re-routed via Pipavav and Mundra ports in Gujarat at an additional cost, according to Dinesh Gautama, a maritime consultant. “Over 95% of northern cargo generating from dry ports of Delhi and other parts are now re-routed to Gujarat ports," he added.
While giving the contract, JNPT should have insisted on ensuring that the key functions are not allowed to be outsourced and only those bidders having their own arrangements for these functions should be allowed, said C.R. Nambiar, an executive with a Mumbai-based ship agency.
In the year ended 31 March, GTI loaded a little over 2 million standard containers, or half of the total containers handled by all the three facilities at JNPT. Whereas it is contractually mandated to handle only 1.3 million standard containers a year. Between April and October this year, it loaded 1.12 million standard containers, against the target of 1.11 million standard containers.
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