With an aim to boost investment in the port sector of the country the Union Shipping Ministry is set to deregulate tariff at major ports in the coming months. Currently, port projects set up after April 1 this year are allowed to set market regulated tariff while the Tariff Authority for Major Ports (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 investments in 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 government's decision 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. The ministry will now come out with a new regulation regarding tariff regime and it has consulted with all the private port operators, Union Shipping Minister GK Vasan said in Mumbai.
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.