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Paradip stevedores face cartelisation charge - 2013-06-12

The Competition of Commission of India has launched an investigation into allegations of the operation of a cartel by a handful of stevedores at Paradip Port, according to informed sources. Notices in this regard have been served under Section 36(2) and Section 41 (2) of the Competition Act, 2002 to about a dozen of the 34 registered stevedores at the port.

When contacted, a spokesman for Paradip Port Trust acknowledged receiving communication from the Commission, and said: “We have replied to all the queries raised by the Commission”. A section of importers and exporters routing consignments through Paradip are believed to have drawn the attention of the Commission to what they called the harassment due to the monopoly stranglehold of the cartel members on the stevedoring operations of the port.

It is almost impossible to bypass these members that charge rates at will, it is observed. As a result, Odisha’s only major port is set to become uncompetitive, at least rate-wise, vis-a-vis the neighbouring Visakhapatnam port in Andhra Pradesh in respect of many commodities. The crux of the problem lies in the operation of the labour pool under the CFH (Clearing, Forwarding, Handling) scheme, the only one of its kind in the country.

Any stevedoring firm undertaking operations at Paradip has to draw labour from the pool, whose management rests with a body headed by the port’s traffic manager with six representatives, three each from the cartel and the labour unions. The complaint is that the traffic manager, for all practical purposes,functions like a rubber stamp. For a non-cartel stevedoring firm, it is almost impossible to draw labour from the pool. The importer/exporter therefore is left with no option but to fall back upon the cartel to get things done.

The mineral-rich Odisha holds the potential for an industrial boom which, in turn, offers growth prospects for Paradip Port. However, all this will remain a distant dream unless the cartel is broken, prospective investors opine.

The Competition Commission, therefore, has been urged to dismantle the present system and install in its place a system guaranteeing a level playing field for all stevedoring firms. Importers and exporters should be free to choose any stevedore they like. It is possible to ensure fair practices and arrive at fair rates only in a competitive environment, and certainly not in the present situation, it has been emphasised.

Meanwhile, the Shipping Ministry too, it is learnt, has been informed of the matter and is mulling appropriate action.

Source: The Hindu Business Line