FREEDOM TARIFF FOR MAJOR PORTS

The Shipping Ministry has proposed that the 12 major ports in the country should have the freedom to fix tariff in tune with market forces, a plan aimed at making them competitive. The development comes in the backdrop of non-major ports eating into the share of major ports. "There is no parity in the regulation mechanism between the major port trusts and the non-major ports.

Whilst tariffs of major port trusts are regulated following cost plus return approach, non-major port trusts do not fall under tariff regulation. A need is, therefore, felt to give flexibility to the major port trusts to react to the market forces," the Shipping Ministry has said.

Seeking comments from stakeholders on 'Revised Guidelines for Determination of Tariff for Major Ports, 2014', the Ministry has said the reference scale of rates (RSOR) for commodity/containers, vessel-related services and various miscellaneous services or combination of services as the case may be, shall be notified by TAMP (Tariff Authority for Major Ports) for each major port trust."

It said for the purpose of proposing reference scale of rates, the major port trusts will first draw base scale of rates covering tariff for all cargo/commodity/container handling services, vessel-related services and miscellaneous services other than estate-related charges.

"Based on the average annual revenue requirement and taking into account the traffic, the major port trust will have the flexibility to adjust the existing rates subject to a maximum tariff hike of 35 per cent and draw the BSOR within the ceiling annual revenue requirement," the new guidelines said.

Shipping Minister G K Vasan has earlier said that the Ministry is finalising new guidelines which will provide a level-playing field across the port sector by allowing the port terminals to fix market-linked tariffs. The Shipping Ministry had earlier proposed rejigging TAMP.

TAMP was constituted in April, 1997, to provide for an independent authority -- the Port Regulatory Authority -- to regulate all tariffs, both vessel-related and cargo-related, and rates for the lease of properties in respect of major port trusts and the private operators located therein. There are 12 major ports in the country -- Mumbai,Jawaharlal Nehru Port Trust, Kolkata (with Haldia), Chennai, Visakhapatnam, Cochin, Paradip, New Mangalore, Marmagao, Ennore, Tuticorin and Kandla.