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Major Port Authorities Bill 2020

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Major Port Authorities Bill, 2020

What to study?

For Prelims: Key features of the Bill.

For Mains: Significance of the changes introduced.

Context: Major Port Authorities Bill 2020 Introduced in The Loksabha.

 Aims and objectives:

  1. Decentralise decision making and infuse professionalism in governance of major ports.
  2. Impart faster and transparent decision making benefiting the stakeholders and better project execution capability.
  3. Reorient the governance model in central ports to landlord port model in line with the successful global practice.

Implications:

The bill will replace the Major Port Trusts Act, 1963.

This will empower the Major Ports to perform with greater efficiency on account of full autonomy in decision making and by modernizing the institutional framework of Major Ports. 

The salient features of the Major Port Authorities Bill 2020 are:

  1. Compared to the Major Port Trusts Act, 1963 the bill reduces the number of sections to 76 from 134 by eliminating overlapping and obsolete Sections.
  2. Simplified composition of the Board of Port Authority which will comprise of 11 to 13 Members from the present 17 to 19 Members representing various interests.
  3. Provision has been made for inclusion of representative of State Government in which the Major Port is situated, Ministry of Railways, Ministry of Defence and Customs, Department of Revenue as Members in the Board apart from a Government Nominee Member and a Member representing the employees of the Major Port Authority.
  4. Tariff Authority for Major Ports (TAMP) has now been given powers to fix tariff which will act as a reference tariff for purposes of bidding for PPP projects.  PPP operators will be free to fix tariff based on market conditions.
  5. An Adjudicatory Board has been proposed to be created to carry out the residual function of the erstwhile TAMP for Major Ports, to look into disputes between ports and PPP concessionaires, to review stressed PPP projects and suggest measures to review stressed PPP projects.
  6. The Boards of Port Authority have been delegated full powers to enter into contracts, planning and development, fixing of tariff except in national interest, security and emergency arising out of inaction and default.
  7. The Board of each Major Port shall be entitled to create specific master plan in respect of any development or infrastructure established or proposed to be established within the port limits and the land appurtenant thereto and such master plan shall be independent of any local or State Government regulations of any authority whatsoever.
  8. Provision has been made for safeguarding the pay & allowances and service conditions including pensionary benefits of the employees of major ports and Tariff of Major Ports.

What is landlord model?

  1. In the landlord port model, the publicly governed port authority acts as a regulatory body and as landlord while private companies carry out port operations—mainly cargo-handling activities.
  2. Here, the port authority maintains ownership of the port while the infrastructure is leased to private firms that provide and maintain their own superstructure and install own equipment to handle cargo.
  3. In return, the landlord port gets a share of the revenue from the private entity.
  4. The role of the landlord port authority would be to carry out all public sector services and operations such as the award of bids for cargo terminals and dredging.

Need:

  1. Currently, most major port trusts in India carry out terminal operations as well, resulting in a hybrid model of port governance.
  2. The involvement of the port authorities in terminal operations leads to a conflict of interest and works against objectivity.
  3. The neutrality of the landlord port authority is a basic requirement for fair competition between port service providers, particularly the terminal operators.

Insta Link:

Prelims Link:

  1. Major vs Minor ports, location of major ports in India
  2. Major ports are administered by and minor ports are administered by.
  3. Major Port Trusts Act, 1963 vs Major Port Authorities Bill 2020.
  4. Landlord port model vs Service Port model vs Hybrid Annuity Model.
  5. Composition of Board of Port Authority.
  6. Role of state governments in creating specific master plan for ports located there.

Mains Link:

Write a note on the Landlord Port model.

Sources: pib.