Role of tariff regulator for major ports questioned

Staff Correspondent

MANGALORE: In the era of an open economy, the role of regulatory bodies such as the Tariff Authority for Major Ports (TAMP) is being increasingly questioned. TAMP, an independent body, is responsible for determining and revising tariffs in major ports in the country.

TAMP has jurisdiction only over major port trusts and their private terminals. It is responsible for prescribing the rates for services provided, facilities extended by them and the lease rates of port trust properties.

TAMP is empowered not only to notify the rates but also the conditions governing their application. There is no regulation of tariffs in minor ports. This subjects the major ports to a regulatory regime while allowing other ports the flexibility to set tariffs purely on a commercial basis.

"Any regulatory authority that does not have complete control over the entire sector is unfair and discriminatory towards the bodies being regulated," according to Jose Paul, former acting Chairman of Jawaharlal Nehru Port, Mumbai. Dr. Paul, presently a visiting professor at the Manipal Academy of Higher Education, says move to extend the jurisdiction of TAMP is questionable.

In an informal chat on the sidelines of an all-India seminar on "Ports and Ships — Partners in Marine Transport," organised by the Mangalore centre of The Institution of Engineers, Dr. Paul said, "Minor ports in India, which handle 25 per cent of the throughput, are not governed by TAMP. It is only the 12 major ports in India which are under TAMP."

"Such a development is fuelling unhealthy competition amongst major and minor ports," he said.

Such an imbalance in a highly competitive economic environment will only drive away business to minor ports leaving major ports vulnerable to losses, he said. It will be ideal to allow dynamics of market forces to fix the rates. This will naturally draw a port user to any facility that offers the best services at competitive rates, he said.

On the continued presence of TAMP, Dr. Paul said the role of any regulator weakens as competition increases and market forces prevail.

It is the users of major ports who stand to benefit from presence of TAMP. "They (port users) are cocooned from varying prices for services, which is the norm in a free market economy," he said.

Recommended for you