If every thing goes well, the major ports in India can heave a sigh of relief as the Government of India (GoI) is considering a proposal to allow them to fix their own tariff. Currently, tariff for the country’s 12 major ports are fixed by the Tariff Authority for Major Ports (TAMP), while the non-major ports are allowed to fix their own rates. The proposal also signals that the Union government, as of now, has abandoned its earlier plan to bring the non-major ports under the TAMP’s purview.

In this context, Kaushik Roy, managing director of Care Container Lines, a mid-sized shipping firm in Kolkata says, “Allowing major ports to fix their own tariff would create a level playing field for them vis-à-vis the non-major ports. This would definitely provide a fillip to the Indian shipping industry as the same would increase the competitiveness in the sector.”

Attempt to reduce pressure on TAMP

It is believed that the proposal is a move by GoI to reduce TAMP’s responsibilities, which is scheduled to be replaced by the Major Ports Regulatory Authority soon. “This move by the Union government will allow major ports to draw more private investments, thereby generating more revenues. This would also enable them to widen their channels of finance to carry out other port development activities,” says Dilip Parik, managing director of Aviation Logistics, a mid-sized logistics firm in Chennai.

Analysts believe that major ports have lost numerous private investments over the years because tariff fixed by the TAMP lacked flexibility. The same has allowed non-major ports to pose stiff competition to major ports in terms of total volume of cargo handled. Even the Planning Commission of India in its recent report has predicted a decline in private investments for the major ports, from Rs 36,868 crore as per its earlier estimation to Rs 21,965 crore, under the National Maritime Development Programme (NMDP).

Arup Choudhury