More reports on: Government policies

Draft 'Major Port Authorities Act' seeks to boost port sector

17 September 2016

The ministry of shipping has prepared a draft bill to replace the Major Port Trusts Act, 1963, with a view to promote port infrastructure and facilitate trade and commerce.

The draft `Major Port Authorities Act, 2016', aims at giving more autonomy and flexibility to major ports and to bring in professional approach in their governance. This will help to impart faster and transparent decision making which will benefit the stakeholders, a shipping ministry release stated.

The proposed bill was earlier uploaded on the website of the ministry of shipping for comments from various stakeholders and the new draft is based on the suggestions/comments from the stakeholders.

The draft bill proposes a simplified composition of the port's board, which will have 10 members, including 3 to 4 independent members, instead of 17-19 under the present Port Trust model. Provisions have been made for inclusion of 3 functional heads of major ports as members in the board apart from a government nominee and a labour nominee.

The regulation of tariff by Tariff Authority for Major Ports (TAMP) has been removed and in future public-private partnership (PPP) operators will be free to fix tariff based on market conditions and notify the port authority. The board of the port authority has been delegated the power to fix the scale of rates for other port services and assets like land.

The bill defines port related and non-port related use of land and a distinction has been made between these two usages in terms of approval of leases. The port authorities are empowered to lease land for port related use for up to 40 years and for non-port related use up to 20 years beyond which the approval of the central government is required.

For PPP projects the tenure of the lease of land would be as per the PPP policy of the government.

The need for government approvals for raising loans, appointment of consultants, execution of contracts and creation of service posts have been dispensed with. The board of the port authority has been delegated power to raise loans and issue security for the purpose of capital expenditure and working capital requirement.

The concept of internal audit of the functions and activities of the central ports has been introduced on the lines of Companies Act, 2015.

An independent review board has been proposed to be created to carry out the residual function of the erstwhile TAMP for major ports, to look into disputes between ports and PPP concessionaires, to review stressed PPP projects and suggest measures to revive such projects. It will also look into complaints regarding services rendered by the ports / private operators operating within the ports.

At present, there is no independent body to look into these aspects and the review board will reduce the extent of litigation between PPP operators and ports.

The bill provides for CSR and development of infrastructure by port authority.

The status of port authority will be deemed as 'local authority' under the provisions of the General Clauses Act, 1887 and other applicable statutes so that it could prepare appropriate regulations in respect of the area within the port limits to the exclusion of any central, state of local laws.

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