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P. Manoj

New Delhi , Nov. 19

THE Union Shipping Ministry is on a policy overdrive by imparting greater flexibility in fixing tariffs to its major port trusts to enable them compete with private operators on a level-playing field.

After providing flexibility to the 11 major port trusts to charge reduced rates through an order issued by the Tariff Authority for Major Ports (TAMP) on August 28, the Government has now granted them flexibility to relax/rationalise the conditionalities governing the application of such rates in view of its tariff implications.

TAMP has issued a Gazette notification to partially amend the August 28 order to give effect to the fresh policy decision of the Government.

At the behest of a policy direction given by the Shipping Ministry, TAMP had in August issued an order stating that the rates prescribed in the Scale of Rates approved by the tariff regulator would act only as ceiling levels for the major port trusts. Likewise, rebates and discounts were floor levels.

The TAMP order meant that major port trusts may, if they so desire, charge lower rates and/or offer higher rebates and discounts to compete with private operators who were already having this freedom in fixing rates for the services rendered.

Following the August 28 order which redefined the tariff-fixing powers of the major port trusts, it was felt that when major ports decides to reduce rates, it should be done in a transparent manner.

It has to be ensured that when major port trusts take a decision to reduce rates it must be made known to all concerned, a Shipping Ministry official said.

"While the major port trusts are given flexibility to charge reduced rates, absence of such a flexibility in the application of conditionalities may prove incongruent. This Authority, therefore, considers it appropriate to provide the major port trusts with flexibility to relax/rationalise the conditionalities governing the application of rates if such a rationalisation gives relief to the users.

Such rationalisation of conditionalities, however, should not have the effect of increasing the rate per unit prescribed as ceiling by the Authority," TAMP has stated in its order notified on October 31.

In other words, if a rate is prescribed for a unit of 8 hours in the Scale of Rates approved by TAMP and the port trusts want to reduce the unit to one hour taking advantage of the flexibility granted to them, they can do so provided the hourly ceiling rate is adjusted on a pro rata basis.

The port trusts cannot fix hourly rates at a level that is higher than the pro rata rate without the approval of TAMP to ensure that the rationalisation of the unit of levy benefits the users in totality.

While amending the August 28 order, TAMP has noted that it was mandated with powers not only to fix the Scale of Rates but also the conditionalities governing the application of such rates which also had implications on the tariffs levied by the port trusts.

"The decision to grant flexibility to major port trusts in relaxing the conditionalities governing the application of rates will lead to greater competition between public and private service providers at major ports and benefit the users," the Ministry official pointed out.

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