The long wait to permit competitive market forces to have a larger role in determining tariffs at major ports in India ended on Wednesday, with the government announcing new guidelines for the same.
The new guidelines for determining Tariff for Projects at Major Ports (TAMP) comes into force with immediate effect, and will apply prospectively i.e. for all new projects cleared from Wednesday.
“We hope to attract more investment and cargo traffic. Although there is a healthy competition, there is no level-playing field,” G.K. Vasan, Union Minister for Shipping, told a press conference here on Wednesday.
TAMP is only required for major ports, while non-major ports can charge market-based tariffs. While TAMP was established in 1997, major ports today account for 58 per cent of the country’s traffic while non-major ports account for the rest .
Besides providing for tariffs to be indexed to inflation, the new guidelines set out performance standards for port projects to improve accountability and ensure improved quality of service. “The guidelines will be fixed on the basis of market conditions subject to ceilings. The focus on TAMP will now gradually shift to performance monitoring and redressing grievances,” Mr. Vasan said.
Milind Deora, Minister of State for Shipping, IT and Communications, said, “the maritime sector has been going through difficult times and it is an important move to increase investments in such a critical sector.”
“The biggest concern for India has been how to increase port capacity in major ports owned by the government and how to increase throughput. The reform in TAMP was long overdue and it is a win-win for the government and major ports to increase revenues and a win-win for private port operators—Indian or foreign—to increase port capacity.”
The first set of TAMP guidelines was issued in 2005, and revised guidelines were announced in 2008.
Last year, 32 projects were awarded, which will bring in an investment of Rs. 6,765 crore to add 136 million tonnes per annum (tpa). In the current year, the shipping ministry is targeting the award of 30 port projects to add 288 million tpa at an estimated investment of Rs. 25,000 crore.
“The guidelines are for projects announced from today, and we will examine retrospective projects cleared under earlier TAMP guidelines at a later date,” Mr. Deora said.