Waterfront Woes

As President of, perhaps, the largest collective of workers in our Ports, I have a unique ringside view of the travails of an industry, deeply marginalised by policies, rules and acts.

I have spent 10 years as a Trustee on the Boards of Visakhapatnam & Chennai Port Trusts and 2 years as a member of the National Shipping Board. I was also a member of the Dock Safety Committee of DGFASLI and these positions and my 35 years of experience, has me convinced that our work is just beginning.

LINGERING EFFECTS OF COVID
COVID exposed a complete lack of disaster management in our Ports. As per the Act, the NDMA is responsible for “laying down the policies, plans and guidelines for disaster management for ensuring timely and effective response to disaster”.

Let it be known that if 50,000 of us decided to stay home during the lockdowns, our country would have been on her knees. We responded, rose to the occasion, kept the ships working 24 x 7, with nary a thought for our own safety, oftentimes been beaten by the police for allegedly violating curfew, even with permissions and special passes in our hands. With guest workers and staff returning to their homes for safety, on board and yard operations for bulk and break-bulk cargoes were badly affected, leading to increased turnaround times of ships and railway rake and port storage demurrages. Our pleas to declare a Force Majeure situation, post the 2nd wave, which would have prevented penalties on our failure to adhere to contractual obligations, have fallen on deaf ears.

Post the 1st lockdown, despite the Ministry’s orders, no Port refunded excess charge, demurrages or penalties. This prompted our member from Tuticorin to approach the Madurai bench of the Madras High Court by a Writ 6818 & 6217 of 2020. The Honourable Justice presiding took cognizance and directed the Ministry to decide in 6 weeks. The Ministry directed the DG Shipping’s office to meet with the petitioners which was done on 12.01.2021 and the verdict was that since MHA had lifted the lockdown on 25.03.2020, there was no cause for any remission of charges. This order is patently bad in law and has been challenged by the respondents. As President of FAS, I took part in all these deliberations, and I once again urge the authorities to make decisions supporting the trade.

NEED FOR TARIFF STABILITY
Notwithstanding these setbacks, we continue to toil, representing the primary and front-end business development stakeholders of all Indian Ports. We are disturbed to see notifications from the Ports, seeking to increase tariffs, due to indexation by merely stating that an increase in warranted due to having achieved performance standards in the previous year. The Nation is only just recovering after the devastating effects of COVID which caused severe economic hardships. The people of India are looking towards the Government for bail out packages and business friendly initiatives. With every increase, handling costs go up by INR 5-25 PMT. Every increase push Major Port cargo into the hands of the private Ports. Vessel Related charges and estate rentals also go up, making our Ports unviable, resulting in Port lands lying vacant and pushing up unrecoverable expenditure on those who were compelled to rent plots, office/gear storage space. Stevedores, unlike other intermediaries like Agents & Customs brokers, have all in contracts and CANNOT pass on the increase to the trade. It is necessary for Port managements to convey reliability of service by providing tariff stability, without an increase of any tariff whatsoever, whether by indexation or otherwise, for the next 24 months. All tariff increases must be suspended immediately and there must be a roll back of any recent tariff increases. This will give confidence to industry that our Ports means business and are willing to serve as a catalyst to trade.

UNRESONABLE DEMAND BY IPPTA
If, as sought by IPPTA, the Government, acquiesces to their request to permit BOOT operators to handle other cargoes, this can only be at the cost of stevedores, who have also invested substantial time and money in equipment and manpower, to handle bulk and Break-bulk cargoes.

Every tender, that is put out by the Major Ports has specific overriding clauses that state the Concessioning Authority does not guarantee traffic or volumes and that every bidder must undertake a business study and evaluate the risks involved. The downturn due to COVID 19 or any policy shift of GOI cannot be considered as “material adverse effects” or even “conditions precedent”.

This stance, taken by IPPTA is not legally tenable unlike Article 21 of our Constitution, that guarantees a right to livelihood, as decreed by Hon Justice, DA Desai in his judgement in Board of Trustees of the Port of Bombay v. Dilipkumar Raghavendranath Nandkarni, when he held “the right to life” guaranteed by Article 21 includes “the right to livelihood”.
While we do empathize with the members of IPPTA for their travails, the answer to their issues, does not lie in permitting them to handle other cargoes but in an effective and complete overhaul of the MCA, which though undertaken, remains incomplete.

With projects greater than Rs 1000 crores going to the PPPAC, it is recommended that the limit for a Port Board to approve, be increased to Rs 500 crores and projects with higher value be sent to the SFC, where there is a representative of the Ministry of Finance, in any case. This will speed up the process (reduce time & cost overruns) of setting up smaller Port/Port based projects, post COVID 19, where GOI is seeking to attract many investors, currently operating in China.

We are happy that the problems of existing concession agreements are being addressed and rectified by the Conciliation and Settlement Committee. For new projects and for existing ones, a midway reset Clause, permissible and applicable by law, must be introduced.

Private terminal operators at major ports should be given a level playing field with the private operators at minor ports, particularly in setting rates. Taking tariff setting to the Boards of Ports does not settle this issue.

The MCA is presently skewed in favour of the Authority. While the obligations of the Private operator are covered by severe penalties and LD’s, the Port’s obligations, do not have any penalties.

KPI and targets must be assigned to HODs in Port’s responsible for delivering Port’s obligations. Clear responsibilities and targets are to be assigned to officers. Officers who complete targets ahead of time to be rewarded while those who fail to achieve are to be suitably penalized.

The qualification criteria for bidding in PPP projects, excludes stevedores from participating due to setting very high financial parameters such as net worth, turnover etc.

There is no weightage given to experience, particularly when it is the stevedore who has marketed and brought the cargo to the Port, promoted door to door logistics, bonded facilities for stock and sale, invested in cargo handling equipment & systems and established hinterland connectivity. This is a B2B service business, where stevedores work on earnings through calculated performance risks.
In the case of the 1st privatization of a terminal in India, in 1999, this author, as the plaintiff in the Chennai Port Container Terminal, which was stayed for 1 year, the presiding Justice, dismissed the case on the grounds that public interest outweighed private enterprise. What’s good for the goose must be good for the gander!

WHITHER STEVEDORE ON PORT BOARDS?
The Major Port Authorities Act calls for the constitution of the Board, at each Port, within 90 days of enactment.

Section 3 (d) calls for “not less than three and not exceeding four Independent Members;” and Section 4 (2) enumerates that “the Members of the Board as mentioned in clause (c) of sub-section (3) of section 3 shall be appointed by the Board in such manner as may be prescribed from amongst persons having adequate knowledge and professional experience of not less than fifteen years in shipping, marine, management or administration. We call upon the Hon Minister to appoint stevedores to the Boards to fill the pent up demand to assist the Port management in professional decision making, considering the marked absence of such professionals over the past 7/8 years.

REVERSAL OF DETRIMENTAL POLICIES
There are three keys policies that need an urgent visit. The Berthing Policy for Dry Bulk cargo for Major Ports is a document that at best can be described as a figment of the author’s imagination. The FAS met with the author (a big five company!), at the instance of the then Addnl. Shipping Secretary and despite being shown the fallacy of their efforts, this policy remains in effect and hugely detrimental to the entire maritime community.

Certain provisions of Stevedoring & Shore Handling Policy must be altered. FAS has made several representations and we remain hopeful that the Ministry will see reason.

Amendments to the Land policy must be made as the policy in its current form, makes leasing land in Ports, prohibitive.

As a parting shot, it is the stevedore who markets the Port and brings the cargo and retains the customer. In effect, the stevedore acts like the business development arm/marketing agent of the Port, a fact needs to be appreciated and understood.

We call upon the authorities to consult the stevedores, before making policy.

Marex Media

Box
The Author
Ishwar Achanta (photo take from look seward)
President
Stevedore Federation