Parliament Clears Bill To Replace Existing Port Trusts & Provide Greater Autonomy To Major Ports In India

The Bill seeks to provide greater autonomy, flexibility to the Major Ports in India by creating a Board of Major Port Authority for each major port and replacing the existing Port Trusts.

It was passed by the Lok Sabha on September 23, 2020, during Monsoon Session of Parliament in 2020. The Rajya Sabha cleared the Bill today by Divisional Voting with 84 out of 128 cast votes in its favour.

As per the Statement of Objects annexed to the Bill, Major Ports are facing severe competition due to development of private ports. Further, regulation of tariff in Major Ports by the Tariff Authority under the 1963 Act and their administrative control by the Central Government are some of the critical factors hindering growth and development.

The Bill thus seeks to enable Major Ports in India to compete in the evolving market conditions by providing greater autonomy.

Salient Features

Application

The Bill will apply to the major ports situated in Chennai, Cochin, Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, V.O. Chidambaranar, and Vishakhapatnam.

Major Port Authorities Board

The Bill proposes to create a Board of Major Port Authority, for each major port. These Boards will replace the existing Port Trusts under the 1963 Act, that are comprised of members appointed by the central government.

Composition of Board

The Board will comprise of a Chairperson and a Deputy Chairperson, to be appointed by the central government on the recommendation of a selection committee. Further, it will include one member each from (i) concerned State Government in which the Major Port is situated, (ii) Ministry of Railways, (iii) Ministry of Defence, and (iv) Customs Department. The Board will also include two to four independent members, two members representing the interests of the employees of the Major Port Authority, and one member not below the rank of Director (nominated by the Central Government).

Powers of the Board

The Bill allows the Board to use its property, assets and funds as deemed fit for the development of the major port. The Board can also make rules on: (i) declaring availability of port assets for port related activities and services, (ii) developing infrastructure facilities such as setting up new ports, jetties, and (iii) providing exemption or remission from payment of any charges on any goods or vessels.

Fixing of rates

Under the 1963 Act, the Tariff Authority for Major Ports fixes the scale of rates for assets and services available at ports. Under the Bill, the Board or committees appointed by the Board will determine rates for: (i) services that will be performed at ports, (ii) the access to and usage of the port assets, and (iii) different classes of goods and vessels, among others.

Adjudicatory Board

The Bill proposes to constitute an Adjudicatory Board, to be appointed by the Central Government, to replace the existing Tariff Authority under the 1963 Act. It will consist of a Presiding Officer and two members.

Functions of Adjudicatory Board

Functions of the Adjudicatory Board will include: (i) certain functions being carried out by the Tariff Authority for Major Ports, (ii) adjudicating on disputes or claims related to rights and obligations of major ports and PPP concessionaires, and (iii) reviewing stressed PPP projects.

Penalties

The Bill stipulates a fine of up to one lakh rupees in case any person contravenes any provision of the Bill or any rules or regulations.

Parliamentary Debate

The members of the Opposition parties apprehended that the Government seeks to privatize the Shipping & Ports sector through this Bill.

Congress MP Shaktisinh Gohil asked the Government why it had prescribed for appointment of seven private members out of the total thirteen members on the Board of Major Port Authority.

It was emphasized that the Board does not provide adequate representation to the State Governments where the ports are situated, to the employees of the ports and the labour working there.

He also pointed out that that there is no clarity so far as the Selection Committee that will appoint the Chairperson to the Adjudicatory Board is concerned.

Several members accused the Government of not imbibing the recommendations made by the Standing Parliamentary Committee to the Bill and bringing it without holding any stakeholder consultations.

Responding to the debate, Minister of State for Shipping, Mansukh Mandaviya insisted that the Bill does not seek to privatize Ports but rather aims to strengthen all Major Ports so that they can compete with the existing private ports.

He informed the House that most of the recommendations made by the Standing Committee have been accepted and the Bill has been introduced after holding proper public/ stakeholder consultations.

He assured the members that such decentralization of power at Major Ports will provide autonomy to the Boards and will enhance their decision making, with respect to infrastructural development, fixing of tariffs, etc.

The Bill will now be presented before the President for his assent.

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