Centre cannot regulate and control ports owned by the states: Andhra Pradesh government

P Manoj MUMBAI | Updated on January 22, 2021

Legally, the Bill is not tenable because minor ports are under the Concurrent list, says NP Ramakrishna Reddy, CEO, AP Maritime Board

Andhra Pradesh has fired the first salvo against the Indian Ports Bill drafted by the ministry of ports, shipping and waterways that seeks to regulate and control the ports owned by the State governments.

N P Ramakrishna Reddy, chief executive officer, AP Maritime Board told BusinessLine in an interview that the draft Bill is “discriminatory” and “ultra vires the Constitution” because ports are in the Concurrent list. Excerpts from the chat.

What is the stand of A P Government on the draft Bill?

The Bill provides for constitution of one Maritime Port Regulatory Authority for all minor ports in India (owned by the respective coastal States) whereas for 11 major ports (owned by the Centre), there are 11 separate Regulatory Authorities under the Major Port Authorities Bill (which was passed by Lok Sabha and is awaiting Rajya Sabha nod) being enacted separately by the Centre.

This is discriminatory because minor ports are under the control of the State governments while major ports are under the control of the Centre. Therefore, the respective State maritime boards should be vested with the powers of Maritime Regulatory Authority as in the case of major ports wherein there will be one regulatory authority for each major port.

The minor ports handle more than 45 per cent of the country’s total port cargo. Why should there be a single regulatory authority to control all the minor ports across States? Every State should boil at this Bill.

The regulation of minor ports cannot be done by the Centre. The AP government opposes the draft Indian Ports Bill, 2020.

Does the Centre have powers to regulate minor ports?

The subject matter of minor ports comes under item 31 of the Concurrent List of the Constitution. The AP Maritime Board Act, 2018, was enacted by the state legislature under the said list and was published after obtaining the assent of the President of India and the said Act prevails over any Central Act under clause 254(2) of the Constitution, unless the Maritime Board Act is specifically overridden by the Indian Ports Bill, 2020.

There are many enactments made by the Central Government on the subjects in the Concurrent list such as labour laws, industrial laws, electricity laws etc, wherein the state governments are made appropriate authorities and given powers in respect of matters except those under the control of Central Government. Similarly, powers should be vested with the state authorities and state government under the Indian Ports Bill.

Legally, the Bill is not tenable because minor ports are under the Concurrent list. As such, the Centre cannot take away the powers of the States.

The draft Bill provides for Tribunals, Appellate Tribunals and Authorities for Adjudicating disputes. This is not covered under Article 323B of the Constitution and thus the Bill is ultra vires the Constitution.

So, the Bill will undermine the authority of the states over ports?

Worse than that, AP has developed three ports at Krishnapatnam, Gangavaram and Kakinada. From zero, they are handling 110 million tonnes (mt) of cargo per annum.

According to the draft Bill, the three ports, individually, have to apply to the Regulatory Authority proposed by the Centre for registration despite working satisfactorily for the last 15 years without any complaint.

This registration has to be done within two years of the passage of the Bill and if they don’t get the registration, the Regulatory Authority has the power to close them down. No one with marine knowledge can accept this.

As minor ports are in the Concurrent list, State governments can develop their own ports and have regulatory powers over them.

The proposed Bill is against the principle of cooperative federalism and also against the federal structure enshrined in the Constitution.

The states will be deprived of their right of driving the economy if the control of the state ports is taken away. It is the State governments which provide the land and infrastructure for building the ports.

What redressal do you have if the Bill is passed ignoring your views?

If it is passed, I will not leave it. I will go to the Supreme Court and do whatever is possible to get it repealed. AP has got 974 kms of coastline and three ports have been developed and another three ports are being taken up with an investment of over ₹10,000 cores by the State government. With such a big port development programme, if the Centre pass the bill and say this port is not required, that port is not required, it is heart burning.

Will the Bill land the concession agreements signed with private firms in legal complications?

The concession agreements signed with private operators to develop and run ports in AP do not have any clauses that after many years of operations, they will be referred to the Centre and subjected to these conditions. Now, with the proposed Act, they have to go to the Centre and if they don’t get the registration, then thousands of crores spent by private firms on developing these ports will have to be repaid by the state government. So, I am not going to accept this Bill. There are huge investments at stake.

There are fears that some of the ports developed by the state government with private funds may be closed. Because, the Bill clearly says that they have to go to Centre within two years and get permission. While giving permission, the Centre will examine the need for and feasibility of such ports.

Published on January 22, 2021

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