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Business News/ Politics / Policy/  Stevedores, shore-handling agents to be hired on revenue-share basis at major ports

Stevedores, shore-handling agents to be hired on revenue-share basis at major ports

New policy based on scheme introduced by Haldia Dock System of Kolkata Port Trust for on-shore handling of dry bulk cargo from non-mechanized berths


Bengaluru: The shipping ministry has decided to sell permits to so-called stevedores and shore-handling agents to undertake cargo handling operations from the non-mechanized berths of government-owned ports through auctions on a revenue-share basis, according to a new policy for such entities announced on Thursday.

“The government has introduced a revised policy for stevedoring and shore-handling activities in major ports (a term used to describe ports owned by the Union government)," Pon Radhakrishnan, junior shipping minister, told Parliament in a written statement on Thursday.

“The major ports shall go for an open and transparent auction system, based on the Tariff Authority for Major Ports (TAMP) notified tariff, to give licences for stevedoring and shore-handling on revenue-sharing basis for a period of three years. All eligible applicants who are ready to match the highest revenue share shall be given licences. The stevedoring and shore-handling agents have to charge the rates from their principals (exporters and importers), not exceeding the ceiling tariffs notified by TAMP," Radhakrishnan said.

The new policy is modelled on the scheme introduced by the Haldia Dock System of Kolkata Port Trust for on-shore handling of dry bulk cargo from non-mechanized berths on a revenue-share basis from 1 April this year. “Based on the Haldia model, the ministry has now decided to implement the scheme across all major ports," a spokesman for the ministry said.

Stevedores load and unload cargo to and from ships while shore-handling agents undertake carting, storing and delivering of the consignments to customers in the case of imports and receiving the cargo, storing, feeding and loading them onto a ship for exports.

More than 90% of shore-handling agents also undertake stevedoring.

This had led to demands for appointing stevedores and shore handling agents in major ports by auction-cum-tender on a revenue share basis as in the case of public-private-partnership (PPP) projects, to increase competition and bring revenue to the ports.

Stevedoring firms have so far bought annual licences from the port authorities after paying an annual fee which ranges from 4,000 to 1 lakh, depending on the port. On an average, there are at least 50-80 licenced stevedores operating at each of these ports.

After issuing licences, the port authorities have no role to play in their functioning because the stevedores are engaged directly by the exporters and importers based on competitive rate quotations to load and unload cargo from non-mechanized berths. They are paid by the exporters and importers who hire them but none of this money is shared with the port (that has invested money in constructing the berths) by way of royalty or revenue share as in PPP projects, triggering complaints that the ports are losing money because of the way licences are sold.

These service providers handle about 124 million tonnes (mt) of cargo a year out of the combined 581 mt handled by all the 12 ports.

The shipping ministry issued a stevedoring policy in June 2009, allowing stevedores to collect charges directly from exporters and importers and leaving such charges to be decided by the parties based on market forces.

“This needs to be rectified as it (rate setting by TAMP) is a statutory necessity under the Major Port Trusts Act," a five-member committee of port chairmen appointed by the ministry last year wrote in its report.

However, demanding a revenue share from the conventional cargo handling agents, the committee felt, could result in an increase in the transaction cost at the major ports and lead to further diversion of cargo to the non-major ports which are already growing at almost five times the rate of the major ports.

“The committee is therefore unable to agree with the suggestion that ports must appoint stevedores and shore handling agents by tender-cum-auction with the bidding parameter being royalty/revenue share. Instead, it favours the statutory solution of getting TAMP to notify ceiling rates within which competition can be brought in among the different agents as a more sustainable solution", the five-member panel headed by Paul Antony, chairman of Cochin Port Trust, wrote in its 21 July report on regulating stevedores and shore handling agents, submitted to the ministry. Mint has reviewed a copy.

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Published: 14 Aug 2015, 01:16 AM IST
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