Need to free major ports from regulatory regime, says JNPT Chairman

Calls for revisiting mechanism in PPP projects

Mr. N N Kumar, Chairman, Jawahar Lal Nehru Port Trust emphasized the need to raise maritime, port and shipbuilding capacity if India is to gain from its call to 'Make in India' and become the fastest growing economy.

Speaking at the India Ports & Shipping Conference organized by the Federation of India Chambers of Commerce and Industry (FICCI) and supported by the Royal Danish Embassy, Mr. Kumar maintained that there was no need for regulation of tariff rates at major ports and underlined the need for balanced pricing between major and non-major ports.

 

He said that Tariff Authority for Major Ports (TAMP) regime inhibited the growth of major ports and there was a need to free them from the regulatory regime for better price parity and create a level-playing field to compete with fast expanding non-major ports.

He said that the absence of a mechanism to revisit port concession agreements in PPP projects discouraged the participation of private players. In the PPP model the concession agreement is for 30 years. With the fast-paced technological advancements, the profile of port changes every year and with no mechanism to re-visit the agreement during the period of the concession, port development becomes a casualty.

Mr. Kumar also suggested the urgent need for guidelines on structuring of PPP projects to mitigate risks to private players. In the absence of policy guidelines, the risks associated with projects development get loaded on to private players, making the project unviable for them to pursue.

He said there was a case of government grant or subsidy for encouraging captive dredging and improvement in the hinterland connectivity to give a fillip to cargo evacuation and development of waterside facilities.

As far as shipping was concerned, he said the government was exploring the possibility of lending long term cargo support to increase the capacity of Indian flag vessels. Customs formalities were also being streamlined to improve the ease of doing business.

Sharing the Danish perspective on the maritime sector, Mr. Freddy Svane, Ambassador of Denmark to India, said

Denmark had built a strong maritime and shipping sector in close coordination with the government and the private sector. India, he said, could profit by employing the best practices followed by the Danish industry in port development, ship design, logistics and green shipping.

He said the challenges faced by the Indian shipping industry translate into opportunities for Danish shipping companies. Danish competencies within the shipping industry and the great opportunities offered by India will, doubtless, lay a strong foundation for future collaboration between the two countries.

For building efficiencies in India's port sector, Mr. Adil Zaidi, Executive Director, Ernst & Young, stressed the need for faster clearances and approvals, corporatization of port trusts and increased mechanization. For improving the policy regime, he suggested the formulation a national port policy, parity in tariff setting at major and non-major ports and improved hinterland connectivity.

Mr. Sachin Garg, Director, Ernst & Young, gave an overview of the tax and regulatory framework for foreign and Indian shipping companies.

The business sessions of the conference deliberated on policy and regulatory reforms in India's maritime sector and maritime transportation as a catalyst for growth.

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