Gujarat, which set an example for the country by building a large number of private ports, some of which handle volumes higher than many of the ?major ports? in the public sector, has strongly opposed the Centre?s move to set up federal and state regulators for ports. In a letter to Prime Minister Manmohan Singh last week, chief minister Narendra Modi said the proposed regulatory structure was redundant as the state already has a maritime board that is functioning well. Excessive regulation could jeopardise the state?s plan for rapid capacity addition in the sector, Modi said.
Currently, private ports in Gujarat ? including captive jetties of big corporates like Reliance Industries ? have a total capacity of 244 million tonne, handling a cargo volume of 206 mt. This is 70% of the volume handled by all private ports in the country.
Gujarat aims at augmenting its private port capacity to 586 mt in five years, close to the total capacity of all 13 major ports in the country at present.
The Gujarat Maritime Board?s policies since 1995 have led to a proliferation of ports in the private sector. Instead of going in for all-round privatisation in one go, the board started with allowing private firms to provide sundry port services. Later, the board provided equity support to private parties to set up port terminals and adopted the strategy of withdrawing its investments once the ports became profitable.
Although the Constitution says only the Centre can own and administer ?major ports?, it does not define what is a major port. The Gujarat Maritime Board could use this lacuna and set up private ports that are even bigger than state-owned major ports in terms of capacity. The move to set up a national ports regulator could impact Gujarat?s freedom to expand port capacities.
Thanks to the pace at which new port capacities are being created in Gujarat, even the Union shipping ministry estimates that capacities of private ports in the state would rise from 245 mt at present to 864 mt by 2019-20. This would be more than half of the country?s total private port capacity of 1,666 mt in the year.
Modi urged Singh to halt the process of setting up the proposed regulator, which would have overarching powers to take suo motu action against any port or private operators of port terminals. According to sources, the BJP leader also requested Singh to direct the shipping ministry to consult all maritime states first on the viability of the regulator before moving ahead.
The shipping ministry has drafted a draft bill on port regulation, seeking comments from state governments. As per the draft, an agency will be established at the Centre to regulate major ports. All coastal states must set up their own independent regulatory authorities. If a state does not, the central body will regulate ports in that state.
Gujarat feels the regulator will be nothing but a duplication of maritime boards in Gujarat and other states. Under the current dispensation, all 13 major ports are controlled by the Union government and 200-odd minor ports by respective state governments through maritime boards. Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh have formed maritime boards while Kerala, Karnataka and Orissa are in the process of constituting such boards.
Gujarat’s reservations signify those of other states too, which feel the draft is an effort to increase Centre’s say in operating minor ports. ?Traffic at minor ports is growing faster than at major ports. Obviously, the Centre will want to have its share of accolades. Instead of setting up a regulator, one has to think about increasing investments in the sector,? a senior official in a maritime board of a state said requesting anonymity.
Shipping ministry, however, has a different view. A senior official said: ?It is not possible for small institutions like maritime boards to effectively oversee operations as traffic is rapidly increasing. The system requires an overhaul.?
Minor ports handle 33% of all port traffic in India. A maritime agenda prepared by the shipping ministry estimates that traffic at minor ports will exceed that at major ports by year 2020. In 2010, minor ports are expected to handle 1,280.13 million tonnes of cargo, while major ports will handle 1,214.82.
