Analysis of the Major Port Authorities Bill, 2020

Projects Energy & Infrastructure | Apr 2020 | Rahul P. Jain

Authored by Rahul P Jain, Maaz Hashmi and Asiya Khan

The Major Ports Trusts Act came into force in the year 1963 for the constitution of port authorities for major ports in India and to enable the smooth functioning of such ports and to vest the administration, control, and management of such ports in such authorities. With fast-paced growth in trade and the development of private ports, the major ports are facing severe competition. The regulation of tariff by the Tariff Authority under the Major Port Trusts Act, 1963, and their administrative control by the Central Government are some of the critical factors hindering the growth and development of the Major Ports.

Major Ports Authority Bill (Bill) was introduced in the Lok Sabha on March 12, 2020, with an idea that it’s not to privatize major ports but to give them more powers to take decisions in a competitive market. The Bill aims to enable and empower the Major Ports of Chennai, Cochin, Deendayal (Kandla), Jawaharlal Nehru (Nhava Sheva), Kolkata, Mormugao, Mumbai, New Mangalore, Paradip, V.O. Chidambaranar (Tuticorin) and Visakhapatnam, to function with greater autonomy and decision-making power and by modernizing and giving more liberty to the Major Ports by revamping the institutional framework of the Major Ports. The Bill repeals the Major Ports Trusts Act, 1963, and strikes to provide an opportunity to the Major Ports to offer better services and management with effective and new legislation, i.e. the Major Port Authorities Bill, 2020. The bill provides for the following key features:

  • The Bill is concise consisting of only 76 sections instead of 134 sections, to reduce ambiguity and overlapping of provisions
  • The Bill aims to reduce the number of members from the present 17-19 members to 11-14 members
  • It constitutes The Board of Major Port Authority for each Major Port in place of the Board of Trustees, which shall consist of a Chairperson, a Deputy Chairperson, one member each from the concerned State Government in which the Major Port is situated, Ministry of Railways, Ministry of Defence, Customs-Department of Revenue, not less than two and not exceeding four Independent Members, one member not below the rank of Director nominated by the Central Government, ex officio, and two Members representing the interests of the employees of the Major Port Authority shall be members of the Board. Further, to enable the autonomy of the Board of Major Port Authority, they are entrusted with the following among other responsibilities-
        • To use its lands, property, assets, and funds as it may deem fit for the benefits of the Major Port
        • To create a master plan independent of any local or State Government regulations of any authority whatsoever in respect of any development or infrastructure established or proposed to be established within the limits of the port and the land appurtenant thereto
        • To enter into and perform contracts necessary for the performance of its functions under the proposed legislation
        • To make necessary rules and regulations for the smooth operation, development, and planning of the Major Ports
        • To fix tariff except in natural interest, security and emergency arising out of inaction and default
  • The Bill provides for the composition of the Adjudicatory Board consisting of a Presiding Officer and two other members, as may be appointed by the Central Government on the recommendations of the Selection Committee consisting of the Chief Justice of India or his nominee, the Secretary of the Department dealing with Shipping and such other persons as may be prescribed. Other than the tariff setting, the Adjudicatory Board will carry out the functions as stated below:
        • It will continue to carry out function by the erstwhile Tariff Authority for Major Ports, arising from the Tariff Guidelines of 2005, 2008, 2013, 2018 and 2019 and tariffs orders issued by the said Authority
        • It will do the Adjudication of disputes arising amongst the Major Ports, PPP (Public-Private Partnership) concessionaires or captive users for dedicated berth within the framework of their concession agreements and to pass orders after considering and hearing all the parties involved in the dispute
        • The Adjudicating Board will appraise, review the stressed Public-Private Partnership projects as referred by the Central Government or the Board, and suggest measures to revive such projects
        • It will look into the complaints received from port users against the services and terms of service rendered by the Major Ports or the private operators operating in the Major Ports and pass necessary orders after hearing the parties concerned
        • It will look into any other matter relating to the operations of the Major Port, as may be referred to it by the Central Government or the Board, and to pass orders or give suggestions, as the case may be
        • It will lay down the procedure to be adopted by the Adjudicatory Board while discharging its functions, as well as other matters related to funding, accounts, and audit of such Board

It is a welcome move by the Government of India towards maximum utilization of the Ports assets in India along with providing a mechanism for regulation, operation, and planning of Major Ports in India and to vest the administration, control, and management of such ports upon the Boards of Major Port Authorities and for matters connected therewith or incidental thereto. It is also a step towards Decentralizing decision making and infusing professionalism in the governance of major ports by Imparting faster and transparent decision making thereby benefiting the stakeholders and better project execution capability.