Workers of the state-run Dredging Corporation of India Ltd (DCI), who waged a successful struggle for months against its privatisation, will likely have walked into a trap, with the Union Cabinet last week clearing the sale of the Centre’s 73.44 per cent stake in the dredging contractor to a consortium of four state-owned ports.
The Narendra Modi-led government, with a big push from the Shipping Ministry helmed by Nitin Gadkari, has scored a few brownie points in the run-up to next year’s polls by reversing the Cabinet’s decision last year to privatise the company, located in Andhra Pradesh, a State whose government was, till a few months ago, a key constituent of the ruling National Democratic Alliance.
For the Shipping Ministry, it is the easiest way to suck out some of the cash reserves of four major ports — Visakhapatnam Port Trust, Paradip Port Trust, Jawaharlal Nehru Port Trust and Kandla Port Trust — of the 12 it controls. With the exception of Kamarajar Port Ltd, which is run as a company and hence pays dividend to the government, none of the other 11 major ports, which are run as trusts, pay any dividend.
New Mangalore Port Trust, which was part of the original plan mooted by the Ministry along with Vizag and Paradip, was dropped to make way for JNPT and Kandla in the consortium because of their much better cash positions.
For the Department of Investment and Public Asset Management or DIPAM, it is the surest way of getting ‘good money’ from a stake sale in a government company to meet a record divestment target set for the year, which looks improbable now because of the elections slated for next May.
Read more on The Hindu BusinessLine.
