Wednesday, September 24, 2014

Unshackle major ports to compete with private ports

Source:http://www.portwings.in/editorial/unshackle-major-ports-to-compete-with-private-ports/

Edit piece in Port Wings latest issue: 

There are 12 major ports including Kamarajar Port (erstwhile Ennore Port), India’s first corporate port registered under Companies Act, 1956. All of them are controlled by Tariff Authority of Major Ports (TAMP) who regulate all tariffs, both vessel related and cargo related, and rates for lease of properties in respect of Major Port Trusts and the private operators located therein.
On the other hand, our country has over 180 minor ports, which are oflate re-christened as non-major ports.
Presently, major ports account for 58 per cent of total cargo, while non-major ports are handling 42 per cent. In 2000-01, non-major ports handled just 10 per cent of total cargo. However, scenario has changed in last one decade.
The growth shows that non-major ports have grown exponentially over the years and the major ports have failed to garner more cargo.
While the record book may say it was sheer efficiency and productivity of non-major ports to record such growth in short time, the reality is totally different.

According to maritime experts, it was a fight between a free man (non-major ports) and a shackled lion (major ports).

Adani Port (Mundra), a non-major port in Gujarat, came into existence more than a decade ago. It has now established itself as a major port in terms of cargo volume and challenges other major ports in the region.
Likewise, Kamarajar Port, which runs as a corporate entity, has more flexibility in decision making than other major ports governed by Major Port Trust Act, 1963.  

While non-major ports (private ports) have a free hand to decide on port, cargo related charges and development projects, major ports are literally at the mercy of TAMP and every single decision on such matters has to be approved by the authority thus making it difficult to stay in the competition.
Without a level playing field, non-major ports have attracted, rather eaten away considerable cargo from major ports and registered themselves as efficient ports.
With the gap on loss of cargo widening rapidly, major ports have started pleading before the Union Government to do away with TAMP to remain in positive trajectory.
Though the previous UPA government relaxed TAMP’s claw from new PPP projects in major ports  finalized after July 2013, chorus for a total liberty from the authority by 12 major ports is growing day by day. And the new NDA government is seized of the matter.
The recent plain speak by Shipping Ministry top official on TAMP’s existence clearly denotes that the message has reached its crescendo and outcome is sooner.
But when is the million dollar question.


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