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Business News/ Companies / Govt clears new bill to empower major ports
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Govt clears new bill to empower major ports

The bill is aimed at reorienting the governance model in central ports to the landlord port model, in line with successful global practices, says govt

Photo: MintPremium
Photo: Mint

The Union cabinet on Wednesday approved a bill that would give more autonomy and flexibility to major ports in the country. The Major Port Authorities Bill, 2016, will replace the Major Port Trusts Act, 1963, the government said in a statement.

“The new Major Ports Authority Bill, 2016, would help to impart faster and transparent decision-making, benefiting the stakeholders and better project execution capability," it said.

The bill is aimed at reorienting the governance model in central ports to the landlord port model, in line with successful global practices, it added.

In the landlord port model, the publicly governed port authority acts as a regulatory body and as landlord, while private companies carry out port operations—mainly cargo-handling activities. Here, the port authority maintains ownership of the port, while the infrastructure is leased to private firms that provide and maintain their own superstructure and install own equipment to handle cargo. In return, the landlord port gets a share of the revenue from the private entity. In the service port model, the port authority owns the land and all available assets—fixed and mobile—and performs all regulatory and port functions.

Currently, most major port trusts in India carry out terminal operations as well, resulting in a hybrid model of port governance.

Under the bill, the composition of a port board has been simplified and it will now consist of 10 members, including 3-4 independent members, instead of 17-19 under the current model.

The role of the Tariff Authority for Major Ports has also been redefined.

The port authority has been given powers to fix tariff which would act as a reference for purposes of bidding for public-private partnership (PPP) projects. PPP operators will be free to fix tariff based on market conditions.

The board of the port authority has been given the power to fix the scale of rates for other port services and assets, including land. An independent review board has been proposed to be created to look into disputes between ports and PPP concessionaires.

In September, the shipping ministry invited public comments for the proposed bill, put in the public domain for the second time after incorporating feedback received from stakeholders.

An analyst said that implementation will be key. “The bill intends to give more autonomy to the major ports, but will it actually translate into real autonomy is a matter of question," said Anil Devil, chief executive of Indian National Ship Owners Association.

The Union cabinet on Wednesday also approved a revised Air Services Agreement (ASA) between India and Nigeria to improve air connectivity between the two countries.

The cabinet also approved a memorandum of understanding between the rural development ministry and the Food and Agriculture Organisation to improve the effectiveness of rural development programmes in India and to facilitate knowledge sharing.

The cabinet also noted the signing of an MoU between the Indian Space Research Organisation and United States Geological Survey for cooperation in the exchange and use of US Land Remote Sensing Satellite Data.

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Updated: 15 Dec 2016, 08:33 AM IST
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