Shipping Industry takes a sigh of relief as Lok Sabha passes Major Port Authorities Bill, 2020

Lok Sabha on Wednesday passed the Major Port Authorities Bill, 2020. The landmark bill seeks to provide for regulation, operation and planning of 12 major ports in the country and provide greater autonomy to these ports. 

The Bill which will apply to the major ports of Chennai, Cochin, Jawaharlal Nehru Port (JNPT), Kandla (renamed Deendayal), Kolkata (renamed Syama Prasad Mukherjee), Mumbai, New Mangalore, Mormugao, Paradip, Tuticorin (renamed VO Chidambaranar) and Vishakhapatnam will seek to replace the Major Port Trusts Act, 1963.

Previously, the Tariff Authority for Major Ports, established under the 1963 Act, fixed the scale of rates for assets and services available at ports.

Under the Major Ports Authorities Bill 2020, every port will now be governed by a Port Authority which will have the powers to fix reference tariffs for various port services. They may determine rates for:

  • services that will be performed at ports,
  • the access to and usage of the port assets, and
  • different classes of goods and vessels, among others.

Union Shipping Minister Mansukh Mandaviya who introduced the bill on 12 March in Lok Sabha during the budget session said that the bill will make the major ports in the country more autonomous and provide major thrust in the maritime sector.

He said, the bill will help the ports develop world class infrastructure and will also enhance transparency in their functioning.

Further he stressed, that the development of ports will pave way for port led development as envisaged by Prime Minister Narendra Modi.

Allaying apprehensions raised by opposition when the bill was introduced in the house, Mr. Mandaviya informed that the bill will not affect the pension of the retired employees of major ports in any manner.

Will The Major Ports Authorities Bill contribute to greater autonomy?

The Major Ports Authorities Bill is aimed at granting operational and financial autonomy to government establishments that have been dormant owing to years of underinvestment and bureaucratic controls that have led to the loss of market share to minor contenders who have an edge over them, with pricing and infrastructure advantages.

While speaking to Logistics Insider about the impact of the Bill on the maritime and containerised trade of the industry, Sanjam Gupta, Director, Sitara Shipping offers her two cents. She writes, “The logistics cost in India is very high, estimated at 13-14% of gross domestic product (GDP), very high compared with more efficient global systems. Currently, the vessel & container-related charges at Indian ports are much higher than foreign ports. This adds to the cost of logistics of the country. Add to that the longer turnaround time and low output per ship berth and lack of adoption of advanced technologies. The Bill seeks to provide greater autonomy to major ports”.

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