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As the shipping ministry readies the new guidelines for rates at major ports, it has decided to rope in the Competition Commission of India (CCI) to make sure the companies do get into cartelisation or any unfair trade practices.
“As a statutory body, the Tariff Authority of Major Ports (TAMP) is authorised to refer any matter to the CCI. There was a concern that companies could take advantage of a completely free market situation. Hence, Tamp will continue to watch over such practices,” a senior shipping ministry official said.
Tamp will initially set a reference rate for different cargo and berths, especially for bidding purposes. Under the new system, the companies can go for a rate higher than the ceiling set by Tamp.
Companies need not take permission from Tamp if they want to charge below the reference price. But if they want to charge above the reference price, Tamp has to be informed four months in advance. Out of this, one month is kept for other companies and stakeholders to respond to the proposed tariff. At this point though, if the regulatory body apprehends any unfair trade practice, it will refer the matter to the CCI.
“Tamp can always go to the CCI. It does not require any formalisation. There doesn’t seem to be much of change in store for port operators. Tamp is not keen on giving up control on tariff. It has to stop micro-managing,” said a senior port sector analyst who did not wish to be quoted.
The revised guidelines are expected to be announced by the shipping ministry by next month. It is yet to be seen whether Tamp will fix rates for the entire region, for instance the western coastline, or specific terminals and ports.
According to government officials, private players have refrained from bidding for projects in expectation of the new tariff guidelines. Currently, the rates at the 12 major ports which come under the central government are controlled by Tamp, unlike the non-major ports or the private ports which operate in free market conditions.
The shipping ministry has set a target to award 30 projects during 2013-14, which will add a capacity of 287 million tonnes per annum and generate an investment of Rs 25,000 crore.
The big-ticket project among these is the Rs 8,000 crore fourth container terminal at the Jawaharlal Nehru port in Navi Mumbai, up for bidding again. Besides, the government plans to award two new ports – Sagar Island in West Bengal and Dugarajpatnam in Andhra Pradesh this year.
PORT WATCH
- TAMP was constituted in April 1997 to regulate tariffs at the 12 major ports to avoid any monopolistic practices by these ports
- Major ports face pricing competition from non-major and private ports, which are not bound by any tariff regulatory body
- Shipping ministry wants to enable the 12 major ports to fix their tariffs according to market activity, with TAMP’s supervision
