Last week, the Lok Sabha passed the Major Ports Authorities Bill, 2020, replacing the historic Major Ports Trust Act, 1963. This bill aims to improve the efficiency and competitiveness of the 12 major ports in India.

The bill seeks to provide an opportunity for these major ports to offer better services and management by creating a Board of Major Port Authority for each major port. Under the previous act, all major ports were managed by their respective Board of Port Trust which had members appointed by the Central Government. Now, the new Board of Major Port Authority is expected to make ports more autonomous and provide a major thrust to the maritime industry.

Applicability

The Bill will be applied to the major ports of Chennai, Cochin, Jawaharlal Nehru Port, Kandla, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, V.O. Chidambaranar, and Visakhapatnam.

Dissecting the Bill

The primary focus of the bill remains improvement of the efficiency and management of major ports in India. Other than vesting control to the Board of Major Port Authority, the bill also aims at implementing the landlord port model. The landlord port model is followed worldwide, where a publicly governed port authority acts as a regulatory body and as a landlord, while private companies carry out port operations. This model is expected to bring transparency in operations, benefiting stakeholders. Other features of the bill include:

1. The number of Sections: The previous Major Ports Trust Act, 1963 included 134 sections. In comparison, the new bill has become more compact, with 76 sections. This will eliminate overlapping and obsolete sections of the Act.
2. Board Changes: The number of members on the board will be reduced from 17–19 members to 11–14 members. The board will consist of a Chairperson and a Deputy Chairperson, a member each from the respective State Government, Railway Ministry, Defence Ministry, and the Customs Department. The Board will also include 2–4 independent members representing the interest of employees of the Major Port Authority. The Board will be responsible to make regulations and create a master plan for the development of infrastructure. The bill provides for the composition of the Adjudicatory Board which will consist of a Presiding Officer and two other members. These changes are set to strengthen the decision-making and strategic planning of the ports.
3. Tariffs: Previously, the Tariff Authority for Major Ports (TAMP), established in the preceding act, fixed the rates for services provided in the ports. Under the new bill, the new board will be responsible to determine these rates. The role of TAMP has not been eliminated but tweaked wherein it will now have the power to fix tariffs which will act as a reference for bidding and Public-Private Projects (PPP). PPP operators will be free to fix tariffs based on market conditions. PPP operators are nothing but means to manage operations more effectively, which was traditionally a government function.
4. Financial powers of the Board: Previously, the board had to obtain prior sanction from the central government to raise loans. Under the new bill, the board can raise loans from any scheduled bank or financial institution in India and compliant institutions from abroad. Nonetheless, for loans above 50% of its capital reserves, the board will require prior sanction of the government.