Govt takes a step towards deregulating PPP tariffs at major ports

In a major reform for the port sector, Union Minister Sarbananda Sonowal on Wednesday announced tariff guidelines for the public private partnership (PPP) projects in major ports, saying they will usher in a new era of market economy and make major ports more competitive.

According to an official statement, in the new Act, the provision of the erstwhile Tariff Authority for Major Ports (TAMP) stands abolished.

The need for Tariff Guidelines, 2021 for the PPP projects in major ports arose consequent upon the new Major Port Authority Act, 2021 coming in vogue w.e.f. November 3, 2021.

According to the statement, currently, major ports’ PPP concessionaires handle around 50 per cent of the total traffic handled by all the major ports in India.

“The guidelines allow the concessionaires at major ports to set tariffs as per market dynamics,” the statement said. It noted that 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," the statement said, adding that 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 the 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 trans-shipment and coastal shipping. The royalty payable for trans-shipment cargo will now be 1.0 times (from 1.5 times earlier) the normal container,” he said.

Similarly, the minister said for the coastal cargo, the concessionaire has to pay only 40 per cent of the royalty payable for foreign cargo (from 60 per cent 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,” he noted.

The minister observed 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.