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India: Centre’s move may cheer up minor ports

Tuesday, 21 July 2015 | 06:30
Following a demand by major ports for a level-playing field to compete with non-major ports, the Centre has initiated measures for partial deregulation of tariff by the former leading to the belief that it may subsequently pave the way for the abolition of tariff regime.

An official of a private terminal operator of Visakhapatnam Port said though they were keen on abolition of Tariff Authority for Major Ports (TAMP) regime to create a healthy environment to face challenges posed by the minor ports, at least a good beginning has been made by the Ministry of Shipping in this direction.

The demand of major ports, including VPT, is under consideration of the Centre. The National Shipping Board had also suggested consideration of the demand articulated by the major ports.

ICRA, an independent agency specialising in investments and credit rating, in a report stated that as part of reforms in tariff setting process and practices, TAMP issued a policy for determination of tariff by major ports by linking it to the market.

Lack of parity

As the market share of major ports is slowly declining with more fully-mechanised minor ports joining the race across the country, the Centre is under pressure over lack of parity in regulatory mechanism. Minor ports are exempted from regulator raj.

Under the revised policy, performance standards indexation is being introduced for major ports. The rates are fully indexed as per World Port Index (WPI).

In another development, the Attorney General has also given his consent to allow old terminals to migrate to July, 2013 guidelines from 2005 and 2008 guidelines, according to ICRA.

The contribution of major ports fell from 58 per cent in 2013 financial year to 57 per cent in 2014 financial year. Private ports like Adani Ports & SEZ Ltd, Essar Ports Ltd and Pipavav Port Ltd have witnessed a healthy growth at the cost of major ports.
Source: The Hindu
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