Wednesday, October 24, 2012

Flexible tariff system for all ports on the cards: Sinha

CAPTION: Union Shipping Minister G. K. Vasan (Centre) during the release of knowledge paper on maritime sector at the inauguration of India Maritime -2012, held at Panaji, Goa. Also seen (from left) are: FICCI Advisor Rajan Kohli, Mormugao Port Trust Deputy Chairman Biplav Kumar; Union Shipping Secretary P. K. Sinha; Ernst & Young's Soumitra Pandey; Essar Port CEO Rajiv Agarwal and Goa Chamber President Manguirish N Pai Raiker.

Strongly advocating for a level playing field for all-round growth in the shipping sector, Union Shipping Secretary P. K. Sinha has announced that the Shipping Ministry is in the advanced stages of introducing flexible tariff determination system for all ports.
Delivering the key-note address during the inaugural session of India Maritime - 2012, jointly organized by the Shipping Ministry and FICCI at Panaji, Goa, Mr. Sinha said: “The Government has to create a friendly regulatory environment particularly relating to tariff determination in the port sector.”
He further stated: “We have already started moving in that direction, we are in the advanced stage of  formulating a new very simplified TAMP guideline. We have started consultation with the Planning Commission and we have sought comments of all the stakeholders including the ports and IPPTA. Based on your comments we would simplify it in the first phase and in the second phase, we will try get rid of tariff determination by any authority, so that the port or the operators themselves fix tariff determined on market conditions.
Elaborating about the key challenges in port development, Mr. Sinha stated: “There are two main challenges like port connectivity gap and dredging, which are affecting the growth of ports.” “As far as the port connectivity gap is concerned, there are several gaps still exist in terms of port connectivity, road connectivity or rail connectivity. We are working on that and have set up a committee, which is identifying precisely the gap that remains in both major and non-major ports so that we can take them up with NHAI or Railways and put them on the fast track of development,” he added.
Speaking on the second major challenge, Mr. Sinha observed: “Dredging is the one area which continues to remain weak in the country. Need for dredging is tremendous as the draft in our ports has still to be increased on par with international level. In the case of maintenance of dredging, a lot has to be done every year. Therefore, we collectively need to do something about increasing the capacity.”
Speaking in black and white about the sector, which is headed by none other than him, Mr. Sinha voiced concern: “Shipping sector has not really kept pace with the growth of the economy. Today only about 8 to 9% of the total EXIM cargo of the country is carried by Indian tonnage (Indian vessels).This is not a happy situation at all. If you look at any other developed country, you will find that by and large, the country’s cargo is carried by their own vessels.”
Mr. Sinha deplored: “If you see our share in Indian tonnage in global terms, it is only one per cent. So, the shipping industry has clearly lagged behind. When we tried to understand what are the reasons, why they are not happening and what are the challenges we are facing, the first thing that comes to mind is that we need to create a level playing field.” 

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