The Indian Parliament recently passed the Major Port Authorities Bill, 2020. This bill looks to grant increased autonomy and professional governance to the country’s 12 major ports through the establishment of boards. These ports include Deendayal (formerly known as Kandla), Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia).
The Making of a Board of Major Port Authority
The major facet of this bill is the creation of a Board of Major Port Authority for each port, which will replace the existing Port Trusts. Originally, under the Major Port Trusts Act of 1963, these ports were managed by their respective Board of Port Trusts, with members appointed by the central government.
The new boards will feature representatives from the State Government where the major port is located, Ministry of Railways, Ministry of Defense and Customs, Department of Revenue, along with a Government Nominee Member and a Member representing the employees of the Major Port Authority.
Powers and Functioning of The Boards
This bill allows for the board to utilize its property, assets, and funds in a way it deems fit for port development. They also have the authority to determine reference tariffs for various port services. Furthermore, operators engaged in Public Private Partnerships (PPPs) will have the freedom to set tariffs based on market conditions. The bill introduces provisions for Corporate Social Responsibility (CSR) and infrastructure development by the Port Authority.
Penalties and Dispute Resolution via the Adjudicatory Board
An Adjudicatory Board will be set up to carry out residual functions of the erstwhile TAMP (Tariff Authority for Major Ports), primarily resolving disputes between ports and PPP concessionaires. The bill also implicates fines up to one lakh rupees for contravention of its provisions or any related rules or regulations.
Revitalizing Major Ports: Aims of the Bill
The bill aims at decentralizing decision-making and professionalizing the governance of major ports. It seeks to promote the expansion of port infrastructure and enable faster and more transparent decision making that benefits stakeholders and enhances project execution capability. The bill also aims to reorient the current governance model towards a landlord port model, aligning with successful global practices.
Significance of the Bill and Its Implications
This bill is expected to create a level-playing field between major and private ports, as well as between major port terminals and PPP terminals. Due to the elimination of requirement for tariff approvals from TAMP for PPP terminals, investment in PPPs at major ports is projected to increase in the coming years. This move aligns with the country’s Aatmanirbhar Bharat Abhiyan vision, propelling India towards becoming a global manufacturing hub.
Criticism and The Way Forward
Critics argue that the bill is an attempt at privatizing the ports while undermining state powers on land use. Despite this, it does address significant challenges that major ports have been facing. However, these ports lack in service quality and marketing as compared to private ones. To fully leverage the benefits of the landlord port model, the newly created boards must utilize the granted autonomy efficiently.
They should function with freedom, make informed decisions to enhance service quality, efficiency, land usage, asset-monetisation, tariff setting and dispute resolution among others. Only then can the true potential of these major ports be harnessed for the country’s industrial growth.