Shipping Ministry to deregulate tariff at major ports

The Union shipping ministry is set to deregulate tariff at major ports in the coming month as the ministry looks to boost investment in the port sector.

Currently, port projects set up after April 1 this year are allowed to set market regulated tariff while the Tariff Authority for Major Portsor TAMP decides the tariff to be charged across major ports in the country for projects awarded prior to April this year.

The move assumes significance as private operators will be allowed to fix market regulated tariff unlike the earlier regime when the Tariff authority fixed rates. TAMP often cut rates across facilities operated by port operators affecting their revenue.

"A move to deregulate tariff will always help bring in investments. Private sector investmentsin the sector has been affected as port operators believe that their investments will be stuck and their earnings affected. This will send out a strong signal," said an analyst at a leading consultancy firm.

The move to deregulate tariff for all port projects in the country comes at a time when the port sector has been grappling to attract investment from private sector companies and has seen very little investments in the past few years. "We have realised that the tariff regime is one of the most important reasons for the slowdown in investment.

The ministry will now come out with a new regulation regarding tariff regime and we have consulted with all the private port operators," Union Shipping Minister GK Vasan said. The Tariff authority currently fix the tariff to be charged by port operators across the major ports and port operators have been at loggerheads with TAMP over the rates.

Private port operators including DP world and APM Terminals have also challenged the decision by TAMP to cut rates at their facilities in the past. According to the PPP model, private port operators have to share a certain percentage of their revenue with the port operators.

The government had, in March, this year amended a policy regarding new port projects in the country when it deregulated tariff for projects set up after April 1. New projects including a container terminal to be set up at Jawaharlal Nehru Port Trust will fall under this category.

The ministry has already held discussions with all the private port operators in the country including APM Terminals and Dubai based DP world to decide on the tariff deregulations, Vasan added.

Meanwhile, the deregulation of the tariff for new projects has also helped Jawaharlal Nehru Port Trust attract interest from private port operators as the port has seen bids from as many as 8 operators for the construction of a mega container terminal worth more than 8,000 crore.

Companies including Adani, DP world and Port of Singapore Authority have so far bid for the project. Vasan also added that his ministry is now looking at implementing many of the port projects which has been delayed due to various reasons and has said that the deregulation will be a game-changer for the industry.

Meanwhile, commenting on the health of the Union government-controlled Shipping Corporation of India, the minister added that a decision regarding a chairman for the company will be taken soon and the ministry is seriously looking into a health of the company.

"We believe Shipping Corporation of India is doing fine. I am personally looking into the company and we will do everything to help the company revive and we are certain that SCI will make profits this year," Vasan added.

MOL COMFORT TOWING OPERATION RESUMED

Mitsui O.S.K. Lines (MOL) has announced that the towing line has been reconnected to the fore section of the MOL Comfort and the tow has resumed.

Previously It’s a bit of a setback for the salvors, however considering the situation, it’s perhaps not all that unexpected.

The veteran tugboat sailor Paul Berdy   notes that, “When you make up the tow from a salvage operation, the tow points don’t actually exist, so you’re kind of shooting from the hip. It’s not like you have ABS-inspected towing bits installed on the vessel, so you’re rigging on the spot to make this happen.”

MOL didn’t mention how or where the towing wire became disconnected, but Berdy brings up a valid point. The fore-part of the MOL Comfort is being pulled from it’s stern, if you can really call it that, which is really nothing more than a bulkhead that used to be inside the ship.

At first glance, it seems odd that the salvors chose to tow the ship backwards, but it’s likely that the bow, in its present downward trim, is likely acting more like a rudder.  Towing the ship from the bow, with the stern out of the water, may likely make the ship extremely difficult to maneuver in a straight line.

Now the tow is  traveling at a speed of about 2 knots.At that speed, they’ll reach Salalah, Oman (845 nautical miles away) in roughly 18 days .