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Wednesday, January 24, 2001



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To facilitate corporatisation -- Port trusts Act to be amended

P. Manoj

NEW DELHI, Jan. 23

THE Union Cabinet is set to take up a proposal to amend the Major Port Trusts Act, 1963, which will grant legal sanction to the Government to corporatise the major ports that are covered under the Act.

The amendment basically relates to two issues -- one to include an enabling provision in the MPT Act for empowering the Government to denotify major ports from the ambit of the Act before converting them into corporate entities, Government sources told B usiness line.

The second amendment focusses on Section 29 of the Act which will allow the Government to transfer its assets, rights and liabilities in the port from the board of trustees to the new corporate entity.

``The Ministry of Shipping has drafted a note on the proposed amendments and is expecting the Union Cabinet to approve the proposal soon,'' Government sources said.

In February 1999, the Cabinet had given an ``in-principle'' approval for phased corporatisation of major ports starting with the upcoming Ennore port near Chennai, the Jawaharlal Nehru Port Trust (JNPT) and the Haldia Dock Complex.

Since Ennore was a new port under construction, it was notified as a major port under the Indian Ports Act, 1908, and set up as a corporate entity without bringing it under the purview of the MPT Act. So, a denotification was not necessary.

But, the conversion of the JNPT, Haldia and the major ports identified in the next phase of corporatisation such as New Mangalore, Mormugao and Tuticorin would require amendments to the MPT Act.

First, these ports will have to be de-notified from the MPT Act and then corporatised. Besides, Section 29 of the Act will have to amended to enable the Government to transfer the assets, rights and liabilities in the port to the corporate entity.

As per the existing Act, Section 29 empowers the Union Government to transfer its assets, rights and liabilities to the board of trustees which are vested with the task of operating and managing the port.

The proposed amendment will legalise the transfer of assets and liabilities of the Union Government back from the board to the new company formed for managing the port following corporatisation.

The enabling provision to denotify the major ports slated for corporatisation is aimed at circumventing a ``grey area'' in the MPT Act.

Says Mr M.P. Pinto, Secretary (Shipping), ``Once you have notified something, unless you have a particular power to denotify it, you will not be in a position to denotify it''.

``By de-notification, you are taking back an earlier notification, and putting the ports somewhere else. This will require an amendment that will enable you to denotify. You cannot denotify just like that ... it requires a legislative sanction'', says Mr Pinto.

``In the next round of corporatisation, the Government hopes to cover Mormugao, Tuticorin and the NMPT. PwC has been appointed to submit a corporatisation plan for Mormugao. ``We can possibly use the data that they give for others as well'', the Secretar y said.

Related links:
New shareholding plan mooted for ports corporatisation
Law Ministry for Act changes to corporatise major ports

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