Privatisation at India’s Ports stirs trouble

There is trouble in India’s ports. For several weeks dock workers across India’s publicly owned ports have been threatening to start an “indefinite strike” starting on 15th December. Quoted in the Times of India, the leader of the All India Port and Dock Workers Federation said that his organisation strongly believed “that the intention of the present enactment is to convert the major ports as companies and subsequently entrust it to the hands of ‘private cartels’ as has been done in several public sector undertakings in the country. It is our considered opinion that the present enactment has been created by the bureaucrats with the clear intention of seeking opportunities after their retirement”.

What the Dock Workers Federation is referring to when it talks about the “present enactment” is the attempted liberalisation and privatisation of India’s ports. As part of a wider attempt to reform India’s economy, the Government of Narendra Modi has embarked on a project to sell Jawaharlal Nehru Port Authority, which operates India’s largest port complex. A number of terminal operators have bid for the franchise including DP World, APM and PSA International, but also Adani Ports, which is a major competitor to Jawaharlal Nehru port, operating a string of large terminals in India.

The concern of the port workers is that their conditions of work will change markedly under the management of any of the bidders.

This reflects a wider issue in India, both in its logistics sector and in the rest of its economy. The government of Narendra Modi had initially embarked on a large programme of investment in infrastructure, however, it has found it difficult to sustain such spending and has therefore turned to various forms of privatisation to sustain expenditure. This has included the usual suspects, such as the sale of Air India, but now is expanding to more fundamental areas of infrastructure such as ports but also, possibly, major roads.

The reaction to these policies in India can be fierce. Already the Modi government has struggled with the liberalisation of regulations in areas such as retailing and agriculture. Although the desire to attract greater investment in logistics infrastructure is great, the resistance to such policies is also likely to be substantial. However, the opportunities for investors and logistics service providers, but also the wider Indian economy, are likely to be even more substantial.

Source: Transport Intelligence, 7th December 2021

Author: Thomas Cullen