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The Shipping Ministry has announced tariff guidelines for public private participation (PPP) projects at major ports in the country. The reform initiative moves the shipping sector towards deregulation of tariffs for PPP projects at these ports, which will provide a level playing field to PPP concessionaires to compete with private ports.
TAMP abolished
“The need for new guidelines arose consequent upon the new Major Port Authority Act, 2021, coming in vogue from November 3. In the new Act, the provision of the erstwhile Tariff Authority for Major Ports (TAMP) stands abolished. These guidelines allow the concessionaires at major ports to set tariffs as per market dynamics,” the ministry said in a statement.
At present, PPP concessionaires at major ports handle around 50 per cent of the total traffic handled by all such ports in India.
The PPP concessionaires at major ports were constrained to operate under the stipulations of these guidelines (by TAMP) whereas private operators/PPP concessionaires at non-major ports were free to charge tariff as per market conditions. These new guidelines will be applicable for future PPP projects, including the projects which are currently under bidding.
‘Era of market economy’
Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal said the government-mandated concessions in tariff for trans-shipment and coastal shipping shall continue to apply to all PPP future concessionaires. The government has gone a step further and made further concessions to promote trans-shipment and coastal shipping. The royalty payable for trans-shipment cargo will now be one time (from 1.5 times earlier) the normal container.
Similarly, for coastal cargo, the concessionaire has to pay only 40 per cent of the royalty payable for foreign cargo (from 60 per cent earlier) in accordance with coastal concession policy. For transparency, the tariffs are to be hosted on the concessionaire’s website, he noted.
The minister added that these guidelines will usher in an era of market economy for the sector and go a long way in making major ports competitive. The announcement also comes at a time when the government is celebrating ‘Good Governance’ week.
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