Centre’s new bill to give more power to major sea ports

Major ports will be able to lease land for port-related use for up to 40 years, and for non-port related activities up to 20 years when the ‘The Central Port Authorities Act 2016’, the legislation proposed by the Shipping Ministry becomes reality. A draft of the bill has been uploaded at the Ministry’s web site with an invitation for comments.Further, the draft bill has also proposed a simplified structure for the board by bringing it down to nine members.

When implemented, it will replace more than the five-decade-old Major Port Trust Act 1963 and willenable port authorities to function like a corporate entity. Of the 12 ports, the Kamaraj Port Ltd has already been corporatised.

More autonomy

A Shipping Ministry also release said the proposed bill would provide more autonomy and flexibility to the 11 major ports and will bring in a professional approach in their governance. The salient features of the bill are as follows: to reduce the extent of litigation between Public Private Partnership operators and Ports; an independent Review Board has been proposed (to carry out the residual function of the erstwhile Tariff Authority for Major Ports (TAMP) for major ports) to look into disputes between ports and PPP concessionaries, to review stressed PPP projects and suggest measures to review stressed PPP projects. At present, there is no independent body to look into these aspects.

As per the draft bill, a distinction has been made between the usage of land for port and non-port related activities in terms of approval of leases. The Port Authorities are empowered to lease land for port-related use for up to 40 years and for non-port related use up to 20 years, beyond which the approval of the Central Government is required.

The board will comprise nine members including three to four independent members instead of the 17-19 under the Port Trust model. Provisions have been made for inclusion of three functional heads of major ports as members in the board apart from a Government nominee member and a labour nominee member.

The need for Government approval for raising loans, appointment of consultants, execution of contracts and creation of service posts has been dispensed with.

A top Chennai Port Trust official said that the new bill was proposed by the Centre to keep pace with the changing times as the existing one is more than 50-years-old. “Besides, the rules are framed to enable us to function like a corporate firm. Some of the features will give us a free hand to operate,” he said.

Disqualification norms

The disqualification of the appointment of the Board members, their duties and provision of the meetings of the Board through video conferencing etc., have been introduced on the lines of Companies Act, 2013, as has been the concept of internal audit. The Board of Port Authority has been empowered to raise loans and issue security for capital expenditure and working capital requirements.

The bill is aimed at enabling port authorities to function like a corporate entity