Private ports more efficient than major ports

Experts feel that the performance of private ports is more efficient than the 12 major ports, which are owned by the central government.

The superior performance of private ports is attributed to their ability to capture the entire value in the chain—right from the time cargo enters a port till it is loaded onto a ship or from the time it is unloaded from a ship till it leaves a port. Private ports carry out all the cargo-handling activities once cargo enters their premises.

However, major ports outsource many of the cargo-handling activities to private cargo handlers, who share a percentage of their revenue with the government-owned ports every year.

In order to set up cargo-handling activities, state-owned ports seek private funds, in line with the governmentÂ’s policy on privatization to promote efficiency and productivity.

While private ports pay dividends to their shareholders, the dozen state-owned ports (with the exception of Ennore port in Tamil Nadu) donÂ’t pay any dividend to their owner, the central government.

This is because the 11 ports are run as trusts under the Major Port Trusts Act while Ennore port operates as a company under the Companies Act.

From a share of just 5 percent about a decade ago, private ports now control a 42 percent share of IndiaÂ’s cargo shipped through its ports.