In a hypothetical country called Aethos, maritime trade is dominated by two prominent ports, Port A and Port B, situated on the western and eastern shores of the country respectively. While Port-A thrives as a major player in maritime commerce, Port-B has yet to tap into the area due to a lack of container handling infrastructure. These ports present a significant infrastructure gap in the country – a gap that entails serious and far-reaching consequences. The repercussions of this disparity are substantial.
To start with, the state Port-B is located in suffers an annual direct revenue loss of approximately 6,00,000 Verdants (Aethos’ official currency) due to its inability to handle containers. This staggering sum could have been allocated towards critical public initiatives and other infrastructure-related projects. Moreover, an indirect revenue loss of another 5,00,000 Verdants further highlights the negative cascading effect caused by this gap.
Coming back to reality, recently the Government of India unveiled its Maritime India Vision 2047 during the Global Maritime India Summit held in Mumbai. One key suggestion put forth during the Summit was the implementation of restrictions on mergers and acquisitions that would lead to a particular group or company achieving a dominant market share in the port industry. This recommendation comes at a time when there are concerns about attempts by certain players to gain undue advantage in a sector that will see significant investments in the near future.
The Maritime India Vision 2047 would be instrumental in minimizing such ‘hypothetical’ situations – like those in Aethos – and fulfilling the need for comprehensive reforms in India’s maritime sector.
The Vision document proposes exploring conditions that would restrict mergers and acquisitions beyond 50% market share in the port sector by any single entity. These deals would be overseen by the Competition Commission of India (CCI), which will ensure compliance with competition laws. Additionally, the document suggests setting port tariffs at levels not lower than operating costs per tonne of assets. This would prevent ports operated by private entities from engaging in predatory pricing practices that adversely affect government-owned ports.
Transparency within pricing structures also emerges as a crucial aspect of fair competition. Currently, major ports owned by the central government and those operated under public-private partnerships (PPP) publish their tariffs on their respective websites. However, there is a lack of transparency regarding tariffs levied by non-major ports and PPP concessionaires operating under state governments.
To address this issue, the Vision document proposes a directive that mandates non-major ports and PPP concessionaires to host updated tariff information on their websites, promoting transparency and facilitating ease of trade.
The Maritime India Vision 2047 sets ambitious goals for India’s maritime sector, including the development of next-generation ports and an increase in port handling capacity by 400%. By addressing the infrastructure gaps at ports and promoting fair competition through regulatory measures, India aims to unlock its full potential as a global maritime powerhouse.