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TAMP boost for PPP projects in major ports

Industry experts feel that matters will get further complicated

Ruchika Chitravanshi  |  New Delhi 

The shipping ministry’s latest announcement regarding market linked tariff fixation is expected to expedite the bidding for various public private partnership projects at the major ports. Private operators had been waiting in the wings for the new tariff guidelines would now place their bids for projects including container terminals at Jawaharlal Nehru, Chennai port and bulk terminals at Kandla, Goa and Vizag Port Trusts.

'This has come at an opportune time as the request for qualification for the fourth container terminal is now underway. Major Port projects will definitely become more attractive now,' said N N Kumar, deputy chairman, Jawaharlal Nehru Port Trust (JNPT).

While major ports have a reason to rejoice, industry experts feel that matters will get further complicated. Since the new rules are applicable only to projects that will be awarded from August 1 onwards, the existing terminals would continue on the previous tariff regimes, creating a dichotomy of sorts within the major ports. 'Each project is driven by its own guidelines. This is a process of evolution. Reforms will take place and tariff fixation will become simpler. There is no need for any apprehension,' said K Mohandas, former shipping secretary.

The government is trying to work out a 'migration policy' for the existing projects to adopt the 2013 tariff regime, but that again is mired with concerns. Besides, the new tariffs will at least take three years to see the light of the day because that is the minimum each project will take to develop if it is awarded now. As far as non-major ports go, the competition threat is also warded off only till such time. 'Competition is a good thing for the sector and we welcome it. Though the new tariffs will only be applicable prospectively so let us see,' said Prakash Tulsiani, managing director, Gujarat Pipavav Port.

However, industry experts feel that the move to link tariffs to market forces is a signal of things to come. 'It gives a direction that the government wants to deregulate the sector and it has taken a step towards it. It is a positive sign that efficiencies will not be penalized. Although the private players will have to share the gains with the port according to new rules,' a senior sector analyst said.

Under the new system, TAMP will propose a reference tariff for different cargo and berths especially for bidding purposes. While need not take permission from TAMP if they want to charge below the reference price, but if they want to charge above the reference price then TAMP has to be informed four months in advance.

Until now, the tariffs at the 12 major ports which come under the central government are controlled by the TAMP unlike the non-major ports or the private ports which operate in free market conditions.

First Published: Tue, August 06 2013. 18:27 IST