Private port operators call for market-based pricing mechanism

Private port operators have approached the Centre, seeking a level playing field by ushering in a market-based pricing mechanism at all the major ports.

The private operators at Major Ports and the Ministry of Shipping have been discussing the issue of migration to 2013 tariff guidelines that pave the way for a market pricing mechanism model for many months, but nothing has moved in terms of a final policy direction.

A recent move by the Ministry to ‘retender’ existing facilities being run by private cargo operators, as a condition to migrate players to the 2013 tariffs guidelines, was unanimously rejected.

Sources close to the development say the Ministry may eventually not consider retendering but other options for migrating these operators, though nothing has been finalised yet.

Private port operators operating on the 2005 tariff Guidelines for major ports have been arguing that they are economically unviable and have been engaged with the Shipping Ministry for a resolution.

While three subsequent Guidelines have been formulated – 2008, 2013 and now 2015, each being a progression, none apply to operators on the 2005 Guidelines. This has further disrupted the playing field with different operators operating on different guidelines.

Non-major ports, on the other hand, are free to operate on market pricing mechanism. As a result they have grown rapidly and account for 42 per cent of India EXIM trade up from 8 per cent a decade ago, a fact acknowledged by the Ministry in its preamble to the official notification of the 2015 tariff Guidelines.

A private operator said on the condition of anonymity, “We have been in dialogue with the Ministry for years and have addressed all concerns raised, including treatment of surplus. Despite several assurances of migration, nothing has happened. If anything, the several subsequent Guidelines have only made it a non-level playing field, complicating matters further.”

The Maritime Agenda 2010-2020, envisages an investment of ₹2,96,000 crores for expanding the national port capacity to 3130 MT, up from 800.5 MT at major ports and 599.5 MT at non major ports at the end of FY 2014.

Additionally, under the ambitious Sagarmala Project as per the Shipping Minister, atleast a dozen smart cities and several coastal economic zones are planned to lift the country’s GDP growth by 2 per cent.

India’s Ports sector has huge potential but is losing out to its more aggressive and competitive neighbours like Sri Lanka, China and Dubai. “Private port operators believe the Centre has the right idea and vision to transform the Ports and inland logistics network, but what’s equally important and missing is a stable policy regime. That is critical to reassure global investors, attract FDI for the long term in port infrastructure, and most importantly, facilitate effective utilisation of this infrastructure for the benefit of the country,” said an MNC port operator.

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