India’s Shipping Ministry questions relevance of tariff regulator

India’s Shipping Ministry questions relevance of tariff regulator

New Delhi: Concerned about the steadily rising share of non-major and private ports in India’s export-import cargo, the Shipping ministry has questioned the relevance of the Tariff Authority for Major Ports (TAMP) in the current ports scenario, and asked the Indian Ports Association (IPA) to review the tariff regulator’s role.

At the time TAMP was set up, in 1997, as much as 78% of India’s cargo was handled by the 12 major ports. With the passage of time, inter-port and even intra-port competition has ensured that non-major ports – which do not come under TAMP’s purview – account for 45% of India’s cargo handled, with the share of major ports having dropped to 55%.

TAMP had been formed in 1997 through amendments to the Indian Ports Act, 1908, and the Major Ports Trust Act, 1963. Its task was to regulate tariffs at even the privately run facilities in the dozen state-owned major ports.

The tariff body was meant to protect against the development of private monopolies. It was hence that a rule was promulgated that a private port operator already running a terminal at a particular port could not apply for the next such facility to be operated at the same port.

“The idea was to ensure that prospective commercial gains did not lead to the exploitation of clients,” said a Shipping ministry official. “However, there is no rationale for the continuation of such a regulating authority any longer. The time has come for ports to employ market-driven tariffs.”

If, as is widely expected, TAMP is felt to be obsolete, the government will have to amend the port laws to abolish the tariff regulator. The Shipping Ministry is understood to be moving the cabinet for approval to place a Port Laws Amendment Bill in Parliament during the summer session.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.

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