New ports Act to boost private participation
Steps to achieve the Indian Maritime Agenda 2020 formed an important component of the conference; some of the steps include a TAMP reform and a serious look at creating a port regulatory authority.
A new, much-demanded Indian Ports Act (revised from the 1908 Act) is in the offing, and is likely to be placed before the Parliament this winter, with signifÂicant operative provisions as applicable to both Major and Non-Major Ports, Public and Private Ports. The tricky Tariff Authority for Major Ports (TAMP) may find the government's attention, in that the ministry favours the idea that the provisions relating to the existing TAMP should be de-linked from this Consolidated Act and a separate Act creating a Port Regulatory Authority Act.
The two-day NatiÂonal Conference on Ports and Shipping, conducted in Mumbai by the Federation of Indian Chambers of Commerce and Industry (FICCI) and ASAPP Conferences, a division of ASAPP Media Information Group, discussed how the ports sector can raise the targeted Rs 90,000 crore through PPP for the non-major ports alone. Former Secretary of Shipping Michael Pinto opened the debate on what methods to adopt to accomplish the formidable-looking target. One of the main concerns that delegates and speakers brought out was the need for the ports sector to be experimental and aggressive in its approach to financing and structuring its projects. Speakers cited the example of the roads secÂtor, which has a workable Model Concession Agreement (MCA), introduced seveÂral models of opeÂration in PPP and fully-financed approÂaches such as EPC, and had therÂefore learned along the way. Ports, on the other hand, has only dealt with only one form of MCA: the revenue-sharing model.
L Radhakrishnan, Chairman, Jawaharlal Nehru Port Trust (JNPT), who, along with ML Meena, Chairman, Kolkata Port Trust, was Guest of Honour at the conference, called for a workable MCA in ports, but also pointed out that experiments need to go beyond MCAs, and cited the example of Maharashtra's land acqÂuisition model around ports. Under that state's scheme, 12.5 per cent of the price is given back to landowners, thus proving to be a major incentive.
With high costs and 21-25 day delays in transhipment at the new Vallarpadam terminal in Kochi, the advantage for having an Indian transhipment hub is already lost, said Manoj Joshi, Secretary-Ports, Kerala. He said the upcoming Vizhinjam port, under state control, would give Vallarpadam a run for its money. Joshi was respondÂing to a question from a delegate who wondered why we need two transhipment terminals with striking distance of each other. Joshi hoped the competition would drive efficiencies in the two ports.
The much-discussed need for “hub ports” (one each on east and west coasts) was also largely rejected as infeÂasible at present. Former Shipping Secretary DT Joseph said: “We do not need hub ports. Instead, we require more funding for deepening our existing drafts and to develop existing ports to allow bigger ships.”
Earlier, Hemant Kanoria, Chairman, FICCI National Committee on Infrastructure and CMD, Srei Infrastructure Finance Limited, welcomed the gathering. Ramu S Deora, Chairman, All India Shippers Council (AISC), Pratap V Padode, Editor-in-Chief, Infrastructure Today, and MD, ASAPP Media, and Hemant B Bhattbhatt, Senior Director-Management Consulting, Deloitte Touche Tohmatsu India, also spoke at the inaugural.