The Indian government yesterday approved the Major Port Authorities Act, 2016, arguably the biggest regulatory change in Indian shipping in a generation.
The new law gives greater autonomy to the 12 port boards and, crucially, allows future public-private partnership operators to fix tariffs based on market conditions, providing a replacement for the much criticised Tariff Authority for Major Ports (TAMP). Analysts expect global terminal operators to bid more keenly for port contracts in India now that the new law has been approved.
Port authorities can now lease land for port-related use for up to 40 years and for non-port related use up to 20 years, and authorities no longer need to seek government approval for a range of issues, something that has often slowed terminal development in the world’s largest democracy in the past.
Excellent policy change for Indian ports offering managerial flexibility at the local level and the ability to maximise their largest asset’s – property – revenues as well.