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In what the union government says is a major reform for the Port sector, Union Minister for Ports, Shipping and Waterways, Sarbananda Sonowal today announced the tariff Guidelines, 2021 for the PPP projects in major ports.

The need for new guidelines arose consequent upon the new major port authority Act, 2021 coming in vogue with effect from 3 November.

In the new Act, the provision of the erstwhile Tariff Authority for Major Ports (TAMP) stands abolished.

The guidelines also allow the concessionaires at Major Ports to set tariffs as per market dynamics. Currently, Major Port’s PPP concessionaires handle around 50% of the total traffic handled by all the major ports in India.

The biggest benefit of transition to market linked tariff is that a level playing field will be provided to the PPP concessionaires at major ports to compete with private ports.

PPP concessionaires at major ports were constrained to operate under the stipulations of these guidelines (by TAMP) whereas private operators/PPP concessionaires at non-major ports were free to charge tariff as per market conditions. These new guidelines will be applicable for future PPP projects including the projects which are currently under the bidding stage.

Making the announcement, Sonowal said that government mandated concessions in tariff for trans-shipment and coastal shipping shall continue to apply to all PPP future Concessionaires.

"In fact, the government has gone a step further and made further concessions to promote transshipment and coastal shipping. The royalty payable for trans-shipment cargo will now be 1.0 times (from 1.5 times earlier) the normal container. Similarly, for the coastal cargo, the concessionaire has to pay only 40% of the royalty payable for foreign cargo (from 60% earlier) in accordance with coastal concession policy of the government. For transparency, the tariffs so fixed are to be hosted on the website of the concessionaire."

The minister added that these guidelines will usher in an era of market economy for the sector and go a long way in making the Major Ports competitive. He said, the announcement of the market linked tariff guidelines also comes at a time when the government is celebrating the current week as the ‘Good Governance’ week.

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