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Major Port Authorities Bill, 2020

Topics Covered: Infrastructure.

Major Port Authorities Bill, 2020:


Context:

The Rajya Sabha passed the Major Ports Authority Bill, 2020 with 84 votes in favour and 44 against.

  • The Bill aimed to make the ports world class and give the port authorities power to make their own decisions.
  • The bill will replace the Major Port Trusts Act, 1963.

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.

Key features:

The Bill proposes to create a Board of Major Port Authority, for each major port. These Boards will replace the existing Port Trusts under the 1963 Act, that are comprised of members appointed by the central government.

Composition of Board:

The Board will comprise of a Chairperson and a Deputy Chairperson, to be appointed by the central government on the recommendation of a selection committee. Further, it will include one member each from (i) concerned State Government in which the Major Port is situated, (ii) Ministry of Railways, (iii) Ministry of Defence, and (iv) Customs Department.

The Board will also include two to four independent members, two members representing the interests of the employees of the Major Port Authority, and one member not below the rank of Director (nominated by the Central Government).

Powers of the Board:

The Bill allows the Board to use its property, assets and funds as deemed fit for the development of the major port. The Board can also make rules on: (i) declaring availability of port assets for port related activities and services, (ii) developing infrastructure facilities such as setting up new ports, jetties, and (iii) providing exemption or remission from payment of any charges on any goods or vessels.

Adjudicatory Board:

The Bill proposes to constitute an Adjudicatory Board, to be appointed by the Central Government, to replace the existing Tariff Authority under the 1963 Act. It will consist of a Presiding Officer and two members.

Functions of Adjudicatory Board:

Functions of the Adjudicatory Board will include: (i) certain functions being carried out by the Tariff Authority for Major Ports, (ii) adjudicating on disputes or claims related to rights and obligations of major ports and PPP concessionaires, and (iii) reviewing stressed PPP projects.

What are the concerns against the Bill?

  1. The Bill may encourage privatization of Shipping & Ports sector.
  2. There is no clarity so far as the Selection Committee that will appoint the Chairperson to the Adjudicatory Board is concerned.

What is landlord model?

  • 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.
  • 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.
  • In return, the landlord port gets a share of the revenue from the private entity.
  • 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.

InstaLinks:

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: the Hindu.