Are ports’ hands being forced to buy stake in Dredging Corp?

      07/12/2018

It’s the latest twist in the script to privatise the Dredging Corporation of India: the Ministry of Shipping is now sounding out cash-rich port trusts under its control to acquire a controlling stake in the country’s biggest dredging contractor. The advantage: the DCI would stay in government hands and help ward off a possible backlash in the run-up to the 2019 polls, according to two people briefed on the plan.

The Visakhapatnam Port Trust (VPT) and the New Mangalore Port Trust are two among the 12 major port trusts approached by the ministry on the matter.

VPT and DCI are neighbours in the port city located on the eastern coast. VPT chairman M T Krishna Babu was given additional charge of heading New Mangalore Port Trust from July 1, lending credence to the plan.

The ministry has set up a panel comprising the chairmen of three ports to discuss the proposal. “Based on the report of the committee, the ministry will take a final call,” said an official with one of the port trusts.

In 2017, the Union Cabinet approved the strategic disinvestment of its 73.47 per cent stake in DCI, along with the transfer of management control.

The privatisation plan has been facing opposition from workers right from the start, with one of them even taking his life to protest the move.

But what seems to be forcing the ministry’s hand is the political repercussion of privatising the company, which is based in Andhra Pradesh. The State’s ruling Telugu Desam Party recently walked out of the BJP-led coalition. Most regional political outfits have also supported the workers’ unions.

“The asset valuation has been undertaken and DIPAM has appointed a transaction advisor and a legal advisor. The transaction advisor is supposed to prepare a preliminary information memorandum (PIM). That process hasn’t been completed as yet,” a spokesman for the ministry said.

“Only after the PIM is approved can we take this forward. So, the proposal you mentioned, at this stage, is too premature,” he added.