India Overhauls Governance of Largest Ports

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File image courtesy JNPT

By MarEx 2016-12-15 15:49:51

On Wednesday, Indian Prime Minister Narendra Modi's cabinet approved an overhaul of the nation's 50-year-old Major Port Trusts Act, simplifying the oversight of 12 large ports and giving their port authorities greater autonomy.

The new Major Port Authorities Bill "will empower the major ports to perform with greater efficiency on account of full autonomy in decision making and by modernising the institutional structure of major ports," the cabinet said in a statement. 

India's largest port authorities will now have the ability to lease land for up to 40 years for port uses and up to 20 years for non-port uses, without central government approval. In addition, they will be able to borrow money, hire consultants, sign contracts and hire new administrators, all on their own. Under existing law, there were nearly two dozen actions like these that required national-level approvals.

In addition, the new bill hands the power to set port fees directly to the port authorities and to public-private partnership operators (concessionaires like terminal operators). Previously, an independent national agency, the Tariff Authority for Major Ports (TAMP), held the power to regulate port charges. 

Many observers in India believe that the existing decision-making process has limited ports' ability to invest and to attract private partners. The new measures are intended to speed up projects and attract investment – a priority for Modi, who has promoted a plan to attract $15 billion in port investments. 

However, at least one leading industry figure suggested that only time would tell if the overhaul would work. "The bill intends to give more autonomy to the major ports, but will it actually translate into real autonomy is a matter of question," said the head of the Indian National Ship Owners Association, Anil Devil, speaking to Livemint

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