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The Rajya Sabha on Wednesday passed a Bill that seeks to convert 11 of the 12 ports run by the Central government into “authorities” from the current “trustee” set-up, in the biggest structural reform of state-owned ports ever attempted by any government.
The Major Port Authorities Bill was passed by the Lok Sabha last year.
The new law will clear the decks for market pricing of services rendered by the government-owned port authorities and public private partnership (PPP) operators at these so-called major ports to help them compete with private ports that are free to set their own rates.
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Currently, the rates for services provided by the port trusts and the PPP operators are set by the Tariff Authority for Major Ports (TAMP).
Chennai Port Trust, Cochin Port Trust, Jawaharlal Nehru Port Trust (near Mumbai), Deendayal Port Trust (Kandla), Kolkata Port Trust, Mumbai Port Trust, New Mangalore Port Trust, Mormugao Port Trust, Paradip Port Trust, V.0.Chidambaranar Port Trust (Thoothukudi) and Visakhapatnam Port Trust will be brought under a new law called Major Port Authorities Act.
Currently, these 11 ports function as trusts under a law framed more than five decades ago called the Major Port Trusts Act 1963.
Kamarajar Port Ltd is the only exception in this regard. Kamarajar port, which runs the port at Ennore near Chennai, was formed as a company under the Companies Act 1956 when it was opened in 2001.
The new Bill, when signed into law, seeks to grant greater autonomy and flexibility to the major ports and to professionalise their governance for speedier decision-making and help them compete with private ports.
Adjudicatory Board
An Adjudicatory Board (without tariff setting powers) will be set up under the new law to oversee functions carried out by TAMP arising from the tariff guidelines of 2005, 2008, 2013, 2018 and 2019 and tariffs orders issued by that Authority.
The Adjudicatory Board will be tasked with receiving and adjudicating on any dispute or differences or claims relating to rights and obligations of major port authorities and PPP operators or captive users for dedicated berth within the framework of their concession agreements and to pass orders after considering and hearing all the parties involved in the dispute.
The Board will review stressed PPP projects referred by the Centre or the Port Authority Board and suggest measures to revive such projects.
It will look into complaints received from port users against the services and terms of service rendered by the major ports or the private operators operating in the major ports and pass necessary orders after hearing the parties concerned.
The Adjudicatory Board shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908.
The board of each port authority will have 11-13 members of which as much as four will be independent members, two representing the port workers unions, one Central government nominee, chairman and deputy chairman of the port concerned and one nominee representing the state government where the port is located, ministries of Railways, Defence and Department of revenue.
The new law will help these ports to raise loans / additional capital from Indian and foreign lenders.
Besides, the ports will be empowered to make their own master plan for areas within their port limit to the exclusion of any State or local regulations.