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Port operators demand migration to new law

In the likelihood of the new Major Port Authorities Bill, 2016 being passed by Parliament in the next session, the port operators demand that their contracts may be migrated to the new regime; however, the Government is not in favour of automatic migration of the contracts; it wants them to be aware of the revenue model under the new regulations before they effect the shift and the government is not against migration as such.

 With the passage of the Bill the Tariff Authority for Major Ports (TAMP) would practically go out of existence but the regulations passed by it before 2013 would remain valid for the contracts prior to that period.

 While private port operators and members of the Indian Private Ports & Terminals Association (IPPTA) like Essar Ports Ltd ask for the migration to the new rules , Cargo handling firms go one step further and want not just 2005 contracts but everyone should be allowed to migrate..

  After years of intense debate the Government at last decided to scrap TAMP and go in for a change in the institutional structure of 11 ports by converting them into Authorities from trustee-set up. In fact, port investors have always been demanding to wind up TAMP affected by the rate cuts and they argued that freeing from the regulatory controls would help India get private investment in state-run ports. The new regulations provided certain flexible framework, as Manish Gupta, head (port business) at Vedanta has observed.

 Major Ports Authority Bill 2016 confers more autonomy and flexibility on port boards; and all future PPP (public-private-partnership) operators will be free to fix tariff based on the market conditions—a long-pending privilege in demand—and it is enough they notify the decisions to the port authority. The Bill, comprehensive in conception, also calls for setting up of an independent review board to look into disputes between ports and PPP concessionaires. In short, it brings in a clear professional approach in their governance.

 Migration to the new rules signifies in abstract movement from rigidity to flexibility.

 

 


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