Figure 4: No Copyright Infringement Intended

Context:

• Union Minister for Ports, Shipping & Waterways, Shri Sarbananda Sonowal has announced the Tariff Guidelines, 2021 for the PPP projects in Major Ports.

 

About the guidelines:

• The Guidelines allow the concessionaires at Major Ports to set tariffs as per market dynamics.
• The royalty payable for trans-shipment cargo will now be 1.0 times (from 1.5 times earlier) the normal container. 
• Similarly, for the coastal cargo, the concessionaire has to pay only 40% of the royalty payable for foreign cargo (from 60% earlier) in accordance with coastal concession policy of the government. 
• Concessionaire can be a person or company that has the right to sell a product or to run a business in PPP projects.
• TAMP stands abolished according to the Major Port Authority Act, 2021.

Current practice:

• Currently, Major Port’s PPP concessionaires handle around 50% of the total traffic handled by all the Major Ports in India. 

Benefits of the guidelines:

• The biggest benefit of transition to market linked tariff is that a level playing field will be provided to the PPP concessionaires at Major Ports to compete with private ports.
• these guidelines will usher in an era of market economy for the sector and go a long way in making the Major Ports competitive.
• For transparency, the tariffs so fixed are to be hosted on the website of the concessionaire.

 

Major port Authority Act- 2021:

Key features:

• The Bill proposes to create a Board of Major Port Authority, for each major port. 
• These Boards will replace the existing Port Trusts under the 1963 Act, that are comprised of members appointed by the central government.

 

Adjudicatory Board:

• The Bill proposes to constitute an Adjudicatory Board, to be appointed by the Central Government, to replace the existing Tariff Authority under the 1963 Act. It will consist of a Presiding Officer and two members.

 

Functions of Adjudicatory Board:

• Certain functions being carried out by the Tariff Authority for Major Ports, 
• adjudicating on disputes or claims related to rights and obligations of major ports and PPP concessionaires, and
• reviewing stressed PPP projects.

 

Significance:

• Decentralise decision making and infuse professionalism in governance of major ports.
• Impart faster and transparent decision making benefiting the stakeholders and better project execution capability.
• Reorient the governance model in central ports to landlord port model in line with the successful global practice.