An improved Bill, but still contentious

GS paper 2

Syllabus: Parliament structure, functioning and conduct of business, the importance of Indian ports etc

Source: The Hindu

Context: The Union Ministry of Ports, Shipping and Waterways is holding four rounds of consultations on the draft Indian Ports Bill 2022 that will replace the 1908 Act.

Background:

• • • Major ports: Figure in the Union List and come under the jurisdiction of the Central government.
    • Non-major ports: They are in the Concurrent List and come under the respective State governments, but the Center has overriding legislative and executive powers.

2021 draft bill:

• • • Empower MSDC: It sought to empower the Maritime State Development Council (MSDC) to formulate a national plan, for the development of major and non-major ports.
    • Inquiry: To order an appropriate inquiry if any port contravenes the national plan.
    • Empowered the Centre: To make a port non-operational if it was not in consonance with the national plan.
    • Penalties: It prescribed penalties including imprisonment for non-compliance with the MSDC’s directions by port authorities, port officials and other persons.
    • Monitoring

Problems of the 2021 draft Bill:

• • • Maritime State Development Council (MSDC): The MSDC serves as an apex advisory body for the coordinated development of major ports and non-major ports.
      • It has met only 18 times in the last 25 years
    • Chapters II and III-giving statutory status to the MSDC: A body like the MSDC is necessary, but the nature and quantum of its work do not call for either statutory status or a permanent body.
    • Maritime States: There is a fear that the real aim of a statutory-cum-permanent MSDC is to curtail States’ powers to develop and manage non-major ports
    • Central planning and Inspector Raj: The 2021 draft contained several provisions that were a replay of the Socialist-era follies of Central planning and Inspector Raj.

Issues with 2022 draft Bill:

• • • Statutory body: It has retained the MSDC as a statutory-cum-permanent body.
    • Section 10(c): It authorizes the Central government to entrust any administrative and financial functions to the MSDC.
    • In Center’s favour: In order to ensure that the composition of the MSDC is in favour of the Center, the draft Bill makes:
      • Five Secretaries and one Joint Secretary to the Government of India.
      • Administrators of the coastal UTs, as members.

What should be done:

• • • Chapters II and III: It is recommended that Chapters II and III of the draft Bill relating to the MSDC be scrapped and that the MSDC remain an apex advisory body.
    • Port reform strategies: In keeping with port reform strategies worldwide, the Center should work towards greater decentralization, deregulation, corporatisation and private sector participation.
    • Equity stake to maritime states: It should give the concerned maritime States and city municipal corporations a substantial equity stake in corporatised major ports.
    • Higher functions: It should limit itself to overseeing only the ‘higher functions’ of border control, competition policy, port security, environment protection and hinterland connectivity

Status of Indian ports:

• • • Indian ports have already reached their saturation and India needs more new ports.
    • Between 1993-94 and 2021-22: The share of the total cargo of non-major ports went up from 8% to 45%.
    • Public-private partnership (PPP): Maritime States developed non-major ports almost entirely on a public-private partnership (PPP) basis. Example: Gujarat (India’s first private port at Pipavav)
    • World Bank Report (2011): ‘Regulation of the Indian Port Sector’, observed that non-major ports are perceived as “more business-oriented, customer friendly, cheaper and in general more efficient.
      • Unnecessary regulatory and financial burdens are imposed upon Port Trusts, private terminal operators and investors” by the Central government.

Insta Links:

Draft Indian Port Bill 2022

Sagarmala Project

Mains Links:

Q. Explain how Private Public Partnership arrangements, in long gestation infrastructure projects, can transfer unsustainable liabilities to the future. What arrangements need to be put in place to ensure that successive generations’ capacities are not compromised? (UPSC 2014)