Landlord Port Model v/s Service Port Model

Why in news?

• Jawaharlal Nehru Port became the first major port of the country to become a 100% landlord port of India having all berths being operated on PPP model.

More about the news:

• One of the objectives of Major Port Authorities Act, 2021 is to reorient the governance model in central ports to landlord port model in line with the successful global practice

About Landlord Port 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.

About Service Port Model:

• In service ports, the port authority does the administration and operation of port activities.
• The port operation includes providing navigational services, warehouse facilities, cranes, and skilled employees/laborers. the construction of infrastructure, superstructure, and providing employees, becomes the responsibility of the port authority.
• Even if the port authority act in the public interest full ownership of the port remains with the state or the government.
• In most cases, service ports run on losses due to inefficiency. Since the port belongs to the state and operations control by the port authority, workers go on strikes to obtain their demands.

PRACTICE QUESTION:

Consider the following statements regarding Major Ports in India:

1. Presently India has 12 major ports.

2. As per Major Ports Authority Act 2021, every port will be governed by a Port Authority which will have powers to fix reference tariffs for various port services.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer