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Inter-Ministerial panel to take a call on ports regulation

Wednesday, 22 February 2012 | 00:00
Regulations in the port sector will now be decided by an inter-Ministerial committee.The committee will have representation from the Planning Commission, the Shipping Ministry, State Governments, amongst others. The committee is expected to submit its report in two months.
Currently, different ports have different regulatory regimes depending on the jurisdiction of the State and the Central Government, as well as time of award.
Tariffs of major ports – which are under the Central Government - are regulated by the Tariff Authority of Major Ports (TAMP), while those of non-major ports are not regulated.
Non-major ports handled 35 per cent of total cargo handled at ports in 2010-11. In the last five years, the non-major ports have grown at a compounded annual growth rate (CAGR) of 15 per cent, while major ports recorded a CAGR of six per cent.
With non-major ports accounting for a larger share of cargo handled, various stakeholders have called for a level playing field. So, to have similar regulations for all ports, the Ministry had formed a Bill proposing a two-tier regulatory authority system - one for the Central Government ports and one for the State Government ports.
But many State Governments and private operators with stakes in the State Government ports opposed the move. In this context, the Shipping Ministry has escalated the issue to an inter-Ministerial committee. The committee will take a call on the kind of regulation that should exist in the sector.
For major ports, since tariff levels form a part of concession agreement, the concession agreement might also require a review.
“We have now constituted a committee headed by the member, Planning Commission, to look at various aspects. And in about two months, it should be possible to have a view on what should be the type of regulation,” Mr K. Mohandas, Secretary, Shipping Ministry, told Business Line.
MAJOR PORT REGULATION
Again, within major ports, there are different kinds of contracts depending on when the contract was awarded to a terminal operator.
Since the last few years, TAMP fixes the tariff before bids are invited and allows for an escalation in tariff every year.
For contracts before 2009, the TAMP reviews charges periodically. Several attempts by TAMP to reduce charges have ended up as legal disputes, with port terminals resisting lowering charges.
Source: The Hindu Business Line
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