Experts suggest government to convert the 11 major ports, in the country, which are functioning as trusts, into corporate entities as it would give them more autonomy and enhanced power for decision making.
Experts argue that these major ports are unable to compete with the more efficient private ports in the country because they are run as trusts.
Conversion of these ports into corporate entities will enable independent tariff setting, governance standards as per the Companies Act, faster decision-making, increased accountability of the management and more professionalism.
As these ports would come under the Companies Act after conversion, they will be able to revamp their balance sheets in line with true commercial accounting norms and access banks or other sources of commercial funding for expansion projects.
Corporatization would make ports much more efficient, and more economically and financially oriented. In a trust structure, the interests of the trustees are maximized whereas in a corporate structure, the interests of the shareholders are maximized.
Earlier in 2010, Prime Minister Manmohan Singh revived the plan and directed the shipping ministry to begin converting the port trusts into corporate entities. But it hasn’t made any headway till date.