State-run ports in the country, termed ‘major ports’, will get to determine the tariffs for various port-related services as well as the terms for private developers who team up with them, with Parliament on Wednesday passing the Major Ports Authority Bill, 2020.
The new law will supersede a 1963 Act governing the country’s 12 major ports.
It will be curtains down for the Tariff Authority for Major Ports (TAMP); every port will now be governed by a Port Authority (board) which will have the powers to fix reference tariffs for various port services.
Shipping and waterways minister Mansukh Mandaviya said the new Act was not intended to privatise major ports but aimed at boosting their decision-making powers in order to compete with private ports.
The major-port sector hasn’t seen the required level of fixed assets creation to pare the country’s high logistic costs owing to legacy issues, including the TAMP’s archaic regulatory grip.
In January 2018, the Cabinet took a slew of steps to spur private investments via the PPP route in state-run ports. It allowed investors to share royalty with the port authorities on discounted tariffs, rather than as a percentage of gross revenue based on tariff ceiling fixed by the regulator at the time of bidding. Other steps announced then included easier exit akin to what investors in highway projects enjoy, immunity from post-model concession agreement threat to project viability from regulatory orders and changes in environmental and labour laws and imposition of or hikes in indirect taxes.
India has 12 major ports — Deendayal (erstwhile Kandla), Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia). These together had handled 705 million tonnes (MT) of cargo in 2019-20.
The Major Ports Authority Bill, 2020, was passed through ballot votes with 84 in favour and 44 against it in the Rajya Sabha on Wednesday. The Lok Sabha had on September 23, 2020, passed the Bill.