CONTEXT
- The major port authorities bill, 2020 was passed by Lok Sabha which seeks to provide for regulation, operation and planning of major ports and provide greater autonomy to these ports. It will replace the Major Port Trusts Act, 1963.
- Bill aims at decentralizing decision making and to infuse professionalism in governance of major ports.
HIGHLIGHTS:
- Application: The Bill will apply to the major ports of Chennai, Cochin, Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, V.O. Chidambaranar, and Vishakhapatnam.
- Major Port Authorities Board: Under the 1963 Act, all major ports are managed by the respective Board of Port Trusts that have members appointed by the central government. The Bill provides for the creation of a Board of Major Port Authority for each major port. These Boards will replace the existing Port Trusts.
- Composition of Board: The Board will comprise of a Chairperson and a deputy Chairperson, both of whom will be appointed by the central government on the recommendation of a selection committee.
- Further, it will include one member each from (i) the respective state governments, (ii) the Railways Ministry, (iii) the Defence Ministry, and (iv) the Customs Department.
- 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 vessel
- Fixing of rates: Currently, the Tariff Authority for Major Ports, established under the 1963 Act, 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 these rates.
- Financial powers of the Board: Under the 1963 Act, the Board has to seek prior sanction of the central government to raise any loan. Under the Bill, to meet its capital and working expenditure requirements, the Board may raise loans any financial institution
- Through this bill government seeks to reorient the governance model to landlord port model to bring transparency in operations of Major Ports.
- In Landlord Port Model, ownership of the port remains with port authority.
- Infrastructure is leased to private firms that provide and maintain their own superstructure and install their own equipment to handle cargo.
- In return, landlord port gets a share of revenue from the private entity
CHALLENGES FOR SEAPORTS IN INDIA
- While India made great success in metro rails and airport infra, but shipping infrastructure has been neglected.
- We suffer from ageing fleet, manpower shortage, we do not have world class ports.
- Third-generation large sized ships are unable to enter our ports so their goods are first offloaded in Sri-lanka, then sent to India in smaller ships.
- Port congestion, delay in turnaround, takes lot of paperwork to load/unload cargo, customs clearance / inspection is slow, inadequate road and rail connectivity with the hinterland
- Privately owned minor ports are more efficient, whereas major ports suffer from labor unions and politicization of the Board of Directors.
- Problems of land acquisition and environmental clearances while setting up new ports.
- Indian Shipping companies buy / hire foreign ships at higher cost because domestic shipbuilding industry is underdeveloped. (Although shipping ‘breaking’ industry is well developed at Alang in Gujarat.)
CONCLUSION:
- Infrastructure is a critical determinant of economic growth. It has a direct bearing on investment, manufacturing sector, logistics and productivity. Aforementioned bill is important in that regards.