Some section of the union shipping ministry feels that private investors are keenly awaiting the government's decision on tariff norms in the port sector before investing.
Particularly, private players are awaiting government's decision on a proposal to transform the Tariff Authority of Major Ports (TAMP) from a regulatory body into an appellate body. TAMP regulates tariffs in centre-controlled major ports, unlike the non-major ports or the state ports which operate in a free market scenario.
Industry players argue that the tariff structure proposed by TAMP does not encourage efficient operation of port terminals. This discourages private investment in the sector. For example, the union shipping ministry managed to achieve only 40 per cent of the total investment targets during the 11th Plan period at Rs 35,536 crore.
For the 12th Plan period (2012-17), the shipping ministry has set a target of generating private investment of Rs 171,548 crore.
But some industry watchers attribute the poor private investment to economic slowdown, which reduced business and trade activity at ports. Besides, the availability of credit has also become an issue for port companies, facing troubled times, industry watchers feel.
There are some recent instances where port authorities failed to attract private investments for their proposed projects. For example, recently Chennai port failed to attract bids for a Ro-Ro terminal and a container freight station it wanted to build in Sri Perumbadur.