Centre scraps plan to extend its reach over non-major ports after backlash from States

P Manoj Mumbai | Updated on June 14, 2021

Ministry of ports, shipping and waterways circulate watered down new draft of the proposed Indian Ports Bill

The Centre has scrapped plans to set up a Maritime Port Regulatory Authority in a new draft of the Indian Ports Bill that seeks to replace the Indian Ports Act 1908 after maritime states opposed the move that would have allowed the Centre to extend its jurisdiction over ports owned by the State Governments.

The Maritime Port Regulatory Authority was designed to give sweeping powers to the Central government to “effectively regulate and control ports” which are in the concurrent list of the Constitution and help realise the idea of a ‘One Nation, One Port’.

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“The proposal to set up a Maritime Port Regulatory Authority has been dropped to retain the federal structure enshrined in the Constitution,” a government official briefed on the plan said.

In the concurrent list

The maritime states argued that the move was “against the principle of cooperative federalism, legally untenable, discriminatory and ultra vires the Constitution” because ports are in the Concurrent list. The non-major ports are under the control of the State Governments and cannot be regulated by the Centre, they had said during stakeholder consultations on the Bill in January.

The much-diluted new draft of the proposed law seeks to set up a Maritime State Development Council (MSDC) comprising representatives from the Central and State Governments. Such a Council is in existence for many years.

The Council shall make recommendations to the government for a more efficient and conducive framework for ports in India, suggest measures to facilitate competition and promote efficiency in the operation of ports and to facilitate growth of the port sector, among other issues.

It will be tasked with assessing the future development of existing ports and new ports, both major and non-major ports, by the Central Government or State Governments either directly or through private participation.

It will formulate a national plan for development of major and non-major ports, for both existing ports and new ports, and revise such a plan from time to time.

It will monitor the development of non-major ports in the States with a view to ensure their integrated development with major ports and ensure transparency of port tariffs.

For the purpose of transparency, the Council may specify regulations for components of port tariff.

The State Maritime Boards set up by the respective maritime states will oversee the functioning of non-major ports in their respective states.

Appellate Tribunal

The Adjudicatory Board constituted under the Major Port Authorities Act, 2021 shall act as the Appellate Tribunal under the proposed law.

The Appellate Tribunal will look into appeals against directions passed by the Council, direction or order of the State Maritime Boards, adjudicate disputes between two or more ports, where at least one port is not within the purview of the same State, between two or more State Maritime Boards, between one or more major ports and one or more non-major ports or between two or more State Governments.

The orders of the Tribunal can be challenged in the Supreme Court.

In the case of non-major ports, the State Maritime Board or the concessionaire authorized by the Board will set the port tariff. The rates for major ports will be fixed by the Board of the Major Port Authority or the committee constituted by the Board.

Published on June 14, 2021

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